US Dollar Recovers Modestly as Markets Assess Latest Headlines on Trump Tariff Policy

Source: AP

EUR/GBP remains under pressure as Germany’s GfK Consumer Confidence Survey dropped to -24.7 for March. 

The Euro may face further headwinds with the ECB widely expected to cut interest rates next week. 

UK Prime Minister Keir Starmer has announced plans to raise defense spending to 3% of the country’s economic output.

EUR/GBP posts losses after registering gains in the previous two successive days, trading around 0.8300 during the early European hours on Wednesday. The currency cross holds losses following the release of Germany’s GfK Consumer Confidence Survey, which fell to -24.7 for March 2025, down from a slightly revised -22.6 in the prior period and below market expectations of -21.4. This represents the lowest level since April 2024, highlighting ongoing challenges for the new government, such as persistent cost pressures, political uncertainty, and a surge in corporate bankruptcies.

Traders closely monitor remarks from European Central Bank (ECB) officials ahead of next week’s policy meeting, where the ECB is widely expected to cut interest rates for the fifth consecutive time.

On Tuesday, ECB board member Isabel Schnabel argued that subdued growth should not be automatically interpreted as evidence of restrictive policy, according to a report from Reuters. Schnabel noted that "the natural rate of interest in the Euro area has increased appreciably over the past two years" and suggested that "the nature of the inflation process is likely to have changed lastingly."

ECB policymaker Martins Kazaks expressed support for continued rate cuts, emphasizing the need to approach them step by step. Meanwhile, ECB’s Joachim Nagel indicated that further rate cuts remain possible if inflation continues to ease toward the 2% target.

In the United Kingdom (UK), Prime Minister Keir Starmer has unveiled plans for a significant boost in defense spending, aiming to increase it to 3% of the nation’s economic output over the next decade, according to Bloomberg. This move comes as European governments work to strengthen their security amid uncertainty over US support under Donald Trump’s leadership.

Addressing the House of Commons on Tuesday, Starmer described the initiative as “the biggest sustained increase in defense spending since the end of the Cold War.” Ahead of his upcoming visit to Washington later this week, he confirmed that the initial funding for this increase would come from cuts to overseas development spending, with no plans to raise taxes or increase borrowing.

Source: FXSTREET

Petroliam Nasional Bhd (Petronas) and Vietnam Oil and Gas Group (Petrovietnam) will expedite cooperation in Vietnam’s energy sector, encompassing upstream and downstream activities, gas, and renewable energy (RE), said Prime Minister Datuk Seri Anwar Ibrahim.

He said that with a focus on RE, both countries' oil companies are actively enhancing collaboration in power generation and grid connectivity from Vietnam to Malaysia.

“This initiative aligns with the Asean Power Grid (APG) aspiration to strengthen energy security in the Asean region through energy infrastructure integration,” he said in a post on his official Facebook page

Anwar met with Vietnam’s Prime Minister Pham Minh Chinh during a breakfast session, as part of his two-day working visit to Vietnam, which began on Tuesday.

Anwar highlighted that Malaysia is seriously investing in green energy, including wind-based energy projects in southern Vietnam, and major initiatives such as the Gentari-Petrovietnam collaboration.

"This reflects a strategic move to strengthen regional energy security and ensure a more sustainable transition," he said.

He added that Malaysia and Vietnam share strong network ties, further reinforced by the Comprehensive Strategic Partnership.

"This is not just an agreement on paper but a commitment to deepening cooperation in key sectors, namely trade, investment, green energy, digital technology, and regional security," said Anwar.

At the same time, he emphasised that Malaysia foresees significant potential in the semiconductor industry, artificial intelligence (AI) and digital economy, and that it is ready to enhance the integration of supply chains between both countries.

"Malaysian investors have played a key role in Vietnam’s economic landscape, and we want to see more joint ventures in high-impact projects," he added.

Meanwhile, trade between Malaysia and Vietnam in 2024 rose by 4.4% to US$18.4 billion (RM83.11 billion), from US$17.38 billion in the previous year, reflecting growing trade between the two Asean members.

Vietnam was Malaysia’s 11th largest trading partner in 2024, accounting for 2.9% of Malaysia’s total trade. It was also Malaysia’s 10th largest export destination with a 3.6% share, and the nation’s 13th largest import source with a 2.1% share of Malaysia’s total imports.

Source: Theedgemarkets

Korea's central bank said Wednesday it will ease regulations on the inflow of foreign currency to allow export companies to secure foreign currency loans for domestic facility investments.

The latest measure aims to resolve imbalances in the foreign exchange market and curb pressures on the weakening won, the Bank of Korea (BOK) said. The local currency has faced mounting pressure amid domestic political turmoil and global trade uncertainties.

Previously, foreign currency loans had been limited to overseas purposes in principle, with exceptions for small and medium-sized manufacturers. Companies could only use foreign currency funds for overseas investments or the purchase of foreign goods.

With the new measure, however, export companies can now obtain foreign currency loans for domestic facility investments, on the condition that the loan amount does not exceed their export performance over the past year or their estimated performance for the current year, the BOK said.

The latest measures are part of a package of policy actions announced by the government in December to ease regulations governing the inflow of foreign currency.

Source: Koreatimes