FT News Briefing Central banks are scooping up the US dollar
Jun 12, 2024
Central banks are racing to increase their US dollar reserves as interest rates soar, raising questions about the future of global currencies. Meanwhile, the EU plans hefty tariffs on Chinese electric vehicles, impacting international trade dynamics. The UK Tories are pledging significant tax cuts in an effort to revitalize their political standing. In Mexico, the new president-elect's proposed reforms lead to a sharp drop in the peso, highlighting the volatile relationship between political actions and market confidence.
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Paramount Deal Rejected
- Shari Redstone rejected a deal with Skydance Media to take over Paramount, surprising investors and Skydance.
- Paramount's share price dropped 10% after the news broke.
Peso's Slump
- Mexico's peso dropped 9% after the election due to President-elect Sheinbaum's controversial judicial reform proposal.
- Investors are concerned about the reforms' impact on judicial independence, which they see as crucial for investment certainty.
EU Tariffs on Chinese EVs
- The EU plans to impose 25% tariffs on Chinese electric vehicles, potentially generating €2 billion annually.
- Germany opposes the tariffs, fearing a trade war with China, and many EU carmakers share this concern.