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Dollar edges up on first trading day of 2023
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Dollar ended 2022 with its best year since 2015
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But sentiment turning on view of peak rates
By Dhara Ranasinghe
LONDON, Jan 2 (Reuters) – The dollar edged up on Monday, pulling away from recent six-month lows against a basket of major currencies, for now.
It has weakened recently as markets bet a U.S. Federal Reserve tightening cycle may be nearing an end and sentiment remained fragile.
And the first trading day of the year was subdued, with many countries including big trading centres such as Britain and Japan closed for a holiday.
The dollar index, which measures the value of the greenback against a basket of other major currencies, was trading up around 0.16% at 103.65 – off roughly six-month lows hit last week at around 103.38.
The euro was down about a third of a percent at $1.0680 , but not far off its highest levels since June.
Against the yen, the dollar was a touch softer at 130.94 , having hit its lowest levels since August last month.
"There is an attempt by the dollar index to pull higher today but we do see that it is losing a good part of the strength it gained last year," said Ulrich Leuchtmann, head of forex research at Commerzbank.
"After the last Fed meeting, the market was not convinced that the Fed won't cut rates later in 2023. It's going to be an interesting year."
Having raised rates by a total of 425 basis points since March to curb surging inflation, the Fed has started to slow the pace of hikes.
That Fed tightening helped lift the dollar index 8% last year in its biggest annual jump since 2015.
A key focus for markets remain central banks and inflation, as well as signals of how long and deep a recession might prove to be.
International Monetary Fund Managing Director Kristalina Georgieva said on Sunday that 2023 is going to be a tough year for the global economy.
Data from China, meanwhile, showed factory activity shrank for the third straight month in December and at the sharpest pace in nearly three years as COVID infections swept through production lines after the government's abrupt reversal of anti-virus measures.
S&P Global's final Purchasing Managers' Index (PMI) for German manufacturing rose to 47.1 in December from November's 46.2 as fading supply chain problems helped ease the downturn in the sector.
While the euro area economy is also heading for a recession, concerns about gas supply over the winter have eased, meaning a downturn may not be as bad as feared just a few months ago.
Euro zone wages are growing quicker than earlier thought and the European Central Bank (ECB) must prevent this from adding to already high inflation, ECB chief Christine Lagarde said at the weekend.
"The recent euro strength is driven by a mix of things including both the hawkish ECB commentary and hopes of a peak in U.S. rates," said Danske Bank chief analyst Piet Haines Christiansen.
"It is also supported by hopes that the energy supply in natural gas is not as bad a situation as feared."
(Reporting by Dhara Ranasinghe Additional reporting by Nell Mackenzie Editing by Mark Potter)
WARSAW (Reuters) -Polish regulator UOKiK has accused the Polish unit of T-Mobile of misleading advertising relating to a free mobile data offer, with the company potentially facing a fine of 10% of annual revenue. UOKiK said on Monday that T-Mobile Polska's slogan "1200 GB free for a year" was misleading as 100 GB Internet packages are granted each month, for a maximum of 12 months, as long as the consumer renews the offer periodically at a cost of at least 35 zlotys ($7.99). "After reading the advertisement, the consumer should have a general, but realistic, idea of the presented offer," the head of UOKiK Tomasz Chrostny said in a statement.
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Factory activity in Spain shrank for the sixth month in a row in December, albeit at a slower pace than the previous month as easing inflation and stronger business confidence provided hope for a stabler period ahead, a survey showed on Monday. S&P Global's Purchasing Managers' Index (PMI) for manufacturing inched up to 46.4 in December from 45.7 in November but still remained below the 50.0 mark that separates growth from contraction. "December rounded off a miserable half-a-year or so for the Spanish manufacturing economy, with the sector probably mired in a technical recession," said S&P Global's economist Paul Smith.
South Korea's factory activity shrank for a sixth consecutive month in December, a business survey showed on Monday, as the global economic downturn and a local truckers' strike led to the worst slump in demand in 2-1/2 years. The S&P Global purchasing managers' index (PMI) for South Korea manufacturers fell to a seasonally-adjusted 48.2 last month from 49.0 in November. It fell again after two months of slight improvements from a more than two-year low of 47.3 reached in September, but remained below the 50-mark that separates expansion from contraction for the sixth month in a row.
The downturn in euro zone manufacturing activity has likely passed its trough as supply chains begin to recover and inflationary pressures ease, a survey showed on Monday, leading to a rebound in optimism among factory managers. An index measuring output, which feeds into a composite PMI due on Wednesday and seen as a good gauge of economic health, also came in at 47.8, up from November's 46.0, marking its seventh month of sub-50 readings but its highest since June. "A second successive monthly cooling in the rate of loss of factory output brings some cheer for the beleaguered manufacturing sector as we start the new year," said Chris Williamson, chief business economist at S&P Global Market Intelligence.
(Reuters) -European shares rose in the first trading session of 2023 on Monday as euro zone manufacturing data suggested the worst had passed after a year marred by fears of a recession as central banks hiked rates globally. "With 10-year bund yields above 2.50%, relaxed year-end trading and the probable drop in HICP inflation are raising hopes for an upbeat start into the year," Commerzbank Research analysts said in a note, referring to euro zone consumer prices inflation data due later this week. An early indicator was data showing the downturn in euro zone manufacturing activity has likely passed its trough as supply chains begin to recover and inflationary pressures ease, leading to a rebound in optimism among factory managers.
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France's manufacturing sector contracted less than first thought in December, a survey showed on Monday, even though inflationary pressures continued to weigh on the euro zone's second-biggest economy. S&P Global's final December purchasing managers index (PMI) came in at 49.2 points, just below the 50 mark that denotes growth in activity. "France's manufacturing downturn continued into December as the effects of inflation, slowing economic activity and high energy costs weighed on the performance of the sector," said S&P Global Market Intelligence senior economist Joe Hayes.
PARIS (Reuters) -Shares in French IT group Atos rallied on Monday, after newspaper Les Echos reported Airbus had started "exploratory talks" to take a minority share in the firm's cybersecurity unit, citing unnamed sources. Airbus said in an emailed statement that it would not comment on speculation, adding "we are in constant discussion with our partners, customers and suppliers across the industry, but these conversations remain private in nature". Atos said that as part of its strategic plan, "the company had initiated exploratory discussions with potential future minority shareholders in the scope of activities grouped under the name of Evidian".
LONDON (Reuters) -The dollar edged up on Monday, pulling away from recent six-month lows against a basket of major currencies. The U.S. currency has weakened as markets bet a Federal Reserve tightening cycle may be nearing an end. The dollar index, which measures the value of the greenback against a basket of major currencies, rose by around 0.14% to 103.63 – off roughly six-month lows hit last week at around 103.38.
At least one thing is clear from my 'report card' for 2022 — it's easier to find dogs in a bear market than long ideas.
One of Twitter’s landlords accused the social-media company of failing to pay for space in the building.
Apple (NASDAQ: AAPL) stock tumbled 4% through 2 p.m. ET on Tuesday, knocking the tech titan below $2 trillion in market capitalization for the first time since 2021, and putting Apple stock a full one-third below the $3 trillion market cap it hit a year ago. As its first stock action of the new year, BNP downgraded Apple stock from outperform to neutral this morning, and slashed its price target on the tech giant by 22%, to just $140 a share. BNP's downgrade is certainly weighing on Apple stock today, but it's worth pointing out that BNP may only be reacting to other news that necessitated the downgrade.
Two top-notch dividend stocks, with yields of 7.2% and 8%, are ripe for the picking, while another income stock with a yield of nearly 70% could be in for a rough year.
Shares of several tech and fintech stocks dropped to start the new year as investors continued to speculate about the orbit of inflation and interest rates. Shares of the Brazilian e-commerce and payments company StoneCo (NASDAQ: STNE) traded roughly 8.7% lower as of 2 p.m. ET today. Meanwhile, shares of the artificial intelligence-assisted loan platform Upstart (NASDAQ: UPST) traded about 3.5% down, while shares of the insurtech company Lemonade (NYSE: LMND) were roughly flat after having been down as much as 4% earlier today.
Tellurian Inc. (TELL) might move higher on growing optimism about its earnings prospects, which is reflected by its upgrade to a Zacks Rank #2 (Buy).
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Devon Energy (NYSE: DVN) paid a gusher of dividends in 2022. Fueled by its innovative fixed-plus-variable dividend framework, the oil company paid investors $5.17 per share in 2022. With the stock recently trading at around $60 per share, Devon's dividend yield is 8.5%.
