Note ban: Russia protests on cash shortage for diplomats

The dollar's dominance will slowly melt away over the coming year on weakening global demand and a sombre U.S. economic outlook, according to a Reuters poll of currency forecasters whose views depend on there being no second coronavirus shock.

Despite fears a surge in new Covid-19 cases would delay economies reopening and stymie a tentative recovery, world stocks have rallied - with the S&P 500 finishing higher in June, marking its biggest quarterly percentage gain since the height of the technology boom in 1998.

Caught between bets in favour of riskier investments, weak U.S. economic prospects as well as an easing in the thirst for dollars after the Federal Reserve flooded markets with liquidity, the greenback fell nearly 1.0 per cent last month. It was its worst monthly performance since December.

While there was a dire prognosis from the top U.S. medical expert on the coronavirus' spread, the June 25-July 1 poll of over 70 analysts showed weak dollar projections as Fed Chair Jerome Powell on Monday reiterated the economic outlook for the world's largest economy was uncertain.

"The dollar rises in two instances: when you see risk off or when there is a situation where the U.S. is leading the global recovery, and we don't think that's going to be the case anytime soon," said Gavin Friend, senior FX strategist at NAB Group in London.

"The U.S. is playing fast and loose with the virus, and chronologically they're behind the rest of the world."

Currency speculators, who had built up trades against the dollar to the highest in two years during May, increased their out-of-favour dollar bets further last week, the latest positioning data showed.

About 80 per cent of analysts, 53 of 66, said the likely path for the dollar over the next six months was to trade around current levels, alternating between slight gains and losses in a range. That suggests the greenback may be at a crucial crossroad as more currency strategists have turned bearish.

But more than 90 per cent, or 63 of 68, said a second shock from the pandemic would push the dollar higher. Five said it would push the U.S. currency lower.

Much will also depend on debt servicing and repayments by Asian, European and other international borrowers in U.S. dollars.

While an early shortage of dollars in March from the pandemic's first shock pushed the Fed to open currency swap lines with major central banks, international funding strains have eased significantly since. In recent weeks, usage of the facility has reduced dramatically.

That trend is expected to continue over the next six months with major central banks' usage of swap lines to "stay around current levels", according to 32 of 46 analysts. While 13 predicted a sharp drop, only one respondent said use of them would "rise sharply".

The dollar index, which measures the greenback's strength against six other major currencies, has slipped over 5 per cent since touching a more than three-year high in March.

When asked which currencies would perform better against the dollar by end-December, a touch over half of 49 respondents said major developed market ones, with the remaining almost split between commodity-linked and emerging market currencies.

"The dollar is so overvalued, and has been overvalued for a long time, it's time now for it to come back down again, as we head towards the (U.S.) election," added NAB's Friend.

Over the last quarter, the euro has staged a 1.8 per cent comeback after falling by a similar margin during the first three months of the year. For the month of June, the euro was up 1.2 per cent against the dollar.

The single currency was now expected to gain about 2.5 per cent to trade at $1.15 in a year from around $1.12 on Wednesday, slightly stronger than $1.14 predicted last month. While those findings are similar to what analysts have been predicting for nearly two years, there was a clear shift in their outlook for the euro, with the range of forecasts showing higher highs and higher lows from last month.

"In comparison to even a month or two ago, the outlook in Europe has improved significantly," said Lee Hardman, currency strategist at MUFG.

"I think that makes the euro look relatively more attractive and cheap against the likes of the dollar. We're not arguing strongly for the euro to surge higher, we're just saying, after the weakness we have seen in recent years, there is the potential for that weakness to start to reverse."

Washington, Feb 22: US President Donald Trump will raise the issue of religious freedom with Prime Minister Narendra Modi during his visit to India next week, the White House said on Friday, noting that the US has great respect for India's democratic traditions and institutions.

"President Trump will talk about our shared tradition of democracy and religious freedom both in his public remarks and then certainly in private. He will raise these issues, particularly the religious freedom issue, which is extremely important to this administration," a senior official told reporters in a conference call.

The official was responding to a question on whether the president was planning to speak to Modi on the Citizenship (Amendment) Act or the National Register of Citizens.

"We do have this shared commitment to upholding our universal values, the rule of law. We have great respect for India's democratic traditions and institutions, and we will continue to encourage India to uphold those traditions," the official said, requesting anonymity.

"And we are concerned with some of the issues that you have raised," the senior administration official said, in response to the question on CAA and NRC.

"I think the President will talk about these issues in his meetings with Prime Minister Modi and note that the world is looking to India to continue to uphold its democratic traditions, respect for religious minorities," the official said.

"Of course, it's in the Indian constitution -- religious freedom, respect for religious minorities, and equal treatment of all religions. So this is something that is important to the president and I'm sure it will come up," said the official.

Pointing out that India has a strong democratic foundation, the official said India is a country rich in religious, linguistic, and cultural diversity.

"In fact, it's the birthplace of four major world religions," the official noted.

Washington, Jul 17: US President Donald Trump's economic adviser Larry Kudlow has said that TikTok may cut off ties to its Chinese parent and become a 100 per cent American company to circumvent demands to ban it as India has done.

"I think TikTok is going to pull out of the holding company which is China-run and operate as an independent American company," he told reporters at the White House on Thursday.

The US has not made a final decision on whether to ban it - which has been suggested by Secretary of State Mike Pompeo, he said.

TikTok being divested by ByteDance Technology Company "is a much better solution than banning or pushing away", said Kudlow, who is the Director of the National Economic Council.

He said that its services will be located in the US and "it will become an hundred per cent American company".

If it becomes a US company without Chinese links, India may have to reconsider the ban on the short video app wildly popular in the country.

India banned TikTok along with 58 other Chinese apps on June 29 citing threats to its defence and national security.

The ban came after a deadly clash between Indian and Chinese troops along the Line of Actual Control in Ladakh.

Under Beijing's National Security Law, all Chinese companies have to provide intelligence requested by the government, creating risks for users and their countries.

India was TikTok's biggest market outside of China, where it operates as Douyin.

There were about 200 million users in India and over 300 million downloads.

The US comes next with over 30 million users for the app.