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Gold falls for fourth day as dollar stays firm ahead of Fed meeting

19 March 2018 Comments (0) Actualites, Economy, US

(Reuters) – Gold prices extended losses into a fourth session on Monday and hit a more than two-week low, with the dollar remaining supported as investors expect the U.S. Federal Reserve to raise interest rates this week.

Spot gold was down 0.2 percent at $1,310.03 per ounce at 0735 GMT. Prices fell to $1,307.51 earlier in the session, their lowest since March 1.

U.S. gold futures for April delivery dropped 0.2 percent to $1,309.40 per ounce.

“I think the overall economic recovery is good enough for the (U.S.) central bank to consider a faster pace of normalization of monetary policies,” said Mark To, head of research at Hong Kong’s Wing Fung Financial Group.

A two-day Federal Open Market Committee (FOMC) meeting begins on Tuesday, with the U.S. central bank expected to hike interest rates for the first time this year.

“It is somehow expected and is already priced in the market so I stick to my prediction that precious metals, with gold included, are going to have range-bound trading, unless something really surprising happens,” said To.

With a 25 basis point rate hike seen as a done deal, one key focus is on whether Fed policy makers forecast four rate hikes this year instead of the three they had projected at December meeting.

Gold is highly sensitive to rising U.S. interest rates, becoming less attractive to investors as it does not bear interest.

The dollar inched higher against a basket of major peers on Monday as traders braced for the Fed meeting and as the increased threat of trade protectionism kept markets on edge. [USD/]

The dollar index was up 0.1 percent at 90.302. On Friday, it hit a two-week high near 90.38, following strong U.S. economic data.

“Potential market headwinds from the underlying (susceptibility) to risk-appetite, heightened (geo) political tensions, inflation concerns, Russia tensions, to name a few, could help keep the floor on gold prices in check,” Stephen Innes, APAC trading head at OANDA, said in a note.

Gold speculators cut their net long position by 16,153 contracts to 145,659 contracts, according to the U.S. Commodity Futures Trading Commission (CFTC) data. This was the smallest net long position since early January.

Among other precious metals, silver was down 0.3 percent at $16.26 per ounce and palladium inched 0.1 percent lower to $993.90 per ounce.

Platinum was 0.5 percent lower at $938.49 per ounce after falling to its lowest since Jan. 3 at $936.50.

 

(Reporting by Eileen Soreng in Bengaluru; editing by Joseph Radford and Subhranshu Sahu)

 

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South Africa’s rand at 2-week low as global headwinds, Fed jitters kick-in

1 March 2018 Comments (0) Actualites, Africa, Business, Economy, Politics, US

JOHANNESBURG (Reuters) – South Africa’s rand slipped to its lowest in two weeks on Thursday, succumbing to month end demand for dollars by local firms as the increasing chances of higher interest rates in the United States lured bulls back into long-dollar positions.

At 0640 GMT the rand was 0.4 percent weaker at 11.8350 per dollar, its softest level since February 14, compared to an overnight close of 11.7875.

It was the first time in more than two weeks the rand closed above technical support around 11.80, after weakening for three consecutive sessions, prompting some technical selling as well as portfolio rebalancing by corporates offloading excess rands.

Analysts said the “Ramaphosa effect”, named for the rise in investor confidence and rally in local assets after new president Cyril Ramaphosa took over as chief of the ruling African National Congress (ANC) in December, was now giving way to global headwinds.

“With the cabinet reshuffle out of the way, our local assets will continue to reprice in line with the global macro environment,” said fixed income trader at Rand Merchant Bank Gordon Kerr in a note.

The dollar index remained near 5-week highs early on Thursday, still drawing support after the Federal Reserve’s new chief Jerome Powell struck an optimistic tone on the U.S. economy, raising bets of at least four rate hikes by the bank in 2018.

Stocks opened softer with the benchmark Top-40 index down 0.13 percent.

Bonds were also softer, with the yield on the benchmark paper due in 2026 up 4 basis points to 8.165 percent.

 

(Reporting by Mfuneko Toyana; Editing by Ed Stoddard)

 

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Dow Chemical seeks to triple Africa revenue in five years

12 October 2015 Comments (0) Africa, Business, Latest Updates from Reuters, US

dow chemical

NAIROBI (Reuters) – Dow Chemical Co plans to triple its revenue from sub-Saharan Africa in the next five years and is investing in offices, local staff and manufacturing plants on the continent to meet that target, its head of the region said.

The company sees opportunities in agriculture, where it supplies crop protection chemicals, infrastructure, where it offers water treatment chemicals, as well as in mining and manufacturing.

“We expect to triple our revenue from Africa over the next five years. That is our objective and we are on track to do that,” Ross McLean, president for sub-Saharan Africa, told Reuters in an interview in Nairobi, without saying what revenue the company already achieves there.

“Dow is absolutely betting on Africa’s growth,”

Dow, whose group sales reached $12.9 billion in the second quarter, has opened hub offices in Kenya, to serve East Africa, and another in Ghana, serving West Africa. It is also opening offices in Ethiopia, Nigeria and Angola, as well as in other markets.

“Most multi-nationals, that are driving a growth strategy in Africa, are starting from a very low base, and currently they may be at 1 or 2 percent of the global revenue of the company,” he said, putting Dow’s revenue breakdown in line with that level.

Dow is also investing in a production plant in Egypt, and another in Saudi Arabia, where it has partnered with Saudi Aramco, in order to be consistent with supply of its products to African markets, McLean said.

He said challenges the company faced included weaker currencies in the region, and declines in prices of commodities and oil.

The World Bank cut its 2015 growth forecast for the region last week to 3.7 percent, the slowest since 2009.

McLean said that did not affect Dow Chemical’s ambitions.

“We are here for the long term and we are not scared by the bumps in the road. Africa is a place where you have to be pretty resilient and determined,” he said.

(By Duncan Miriri, Reuters)

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Kellogg to spend $450 mil to expand in Africa

15 September 2015 Comments (0) Africa, Business, Latest Updates from Reuters, US

(Reuters) – Kellogg Co is setting up a joint venture with the African arm of Singapore’s Tolaram Group to bolster its breakfast and snack food offerings in West Africa.

Kellogg will also pay $450 million for a 50 percent stake in Lagos, Nigeria-based Multipro, a food sales and distribution company owned by Tolaram, with an option to buy a stake in Tolaram’s African unit.

Tolaram Africa Foods owns 49 percent of Dufil Prima Foods Plc, the maker of Indomie noodles, Minimie snacks, Power oil and Power pasta.

Kellogg said it intends to develop snacks and breakfast items for the West African market through the joint venture.

The world’s largest cereal maker will also get access to Multipro’s distribution network in Nigeria and Ghana, and potentially in the Dominican Republic of Congo, Ivory Coast, Cameroon and Ethiopia.

U.S. packaged food companies are increasingly looking to expand in emerging markets as customers in their biggest markets such as North America increasingly prefer cheaper private-label foods and cook more at home.

Kellogg acquired a majority stake in Egyptian biscuit maker Bisco Misr for $125 million in January.

Kellogg said it expects costs associated with the Tolaram deal to lower third-quarter earnings by 1 cent per share.

The company’s shares were down slightly in early trading on the New York Stock Exchange. Up to Monday’s close of $66.73, they had fallen 4.4 percent over the past 12 months.

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