TOKYO (Reuters) – The dollar steadied against major currencies on Monday as traders looked to more data for a gauge on the health of the global economy and the Federal Reserve’s annual Jackson Hole retreat for guidance on the outlook for U.S. monetary policy.
Sentiment for the greenback has improved somewhat due to supportive data on business activity and home sales, but there are still concerns that additional monetary easing may be necessary to keep economic growth on track.
Traders in the yuan, and across the broader financial markets, are also nervously watching Sino-U.S. ties as President Donald Trump’s wide-ranging diplomatic dispute with China shows no signs of abating.
“There could be a short-term bounce in the dollar, especially against the euro,” said Junichi Ishikawa, senior foreign exchange strategist at IG Securities in Tokyo.
“In the long term, the dollar will resume its decline because the Fed has to commit to aggressive easing for an very long time.”
Against the euro , the dollar held steady at $1.1803, clinging onto gains made late last week.
The British pound bought $1.3095 and traded at 90.14 pence per euro .
The greenback fetched 0.9121 Swiss franc , holding onto a 0.5% gain from Friday.
The yen held steady, with the dollar changing hands at 105.76 yen , showing little reaction after Japanese Prime Minister Shinzo Abe entered hospital on Monday amid speculation about his health.
Federal Reserve Chairman Jerome Powell will discuss monetary policy on Thursday at the opening day of the Kansas City Fed’s annual symposium.
This year the meeting will be held online, and not at the hunting and fishing resort of Jackson Hole, Wyoming because of the coronavirus pandemic.
The quantitative easing that the Fed has deployed so far has flooded financial markets with excess liquidity and weighed on the dollar.
Last week the dollar index =USD> against a basket of six major currencies fell to the lowest in more than two years. It was last trading at 93.155, little changed from Friday.
The world’s policymakers have unleashed an unprecedented wave of monetary easing and fiscal support to offset the economic drag caused by the pandemic.
However, many countries are now battling a second wave of infections, which could further delay a full-fledged economic recovery. As usual, investors will also be watching out for a further run of data this week for clues on the global economy, including a second estimate of U.S. GDP for the second quarter as well as weekly jobless claims and some second tier Asian indicators.
The euro was on the defensive following disappointing manufacturing and services sector data for Europe released on Friday.
The common currency’s next major hurdle is the release of the closely-watched Ifo sentiment survey on Tuesday.
The euro has pulled back slightly from a two-year high versus the dollar reached last week, which makes it vulnerable to short-term profit taking, some analysts say.
Net short positions in the dollar declined from a more than nine-year high hit a week earlier, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data released on Friday, which suggests that the greenback’s declines could start to slow.
The speculative community has been short the U.S dollar since mid-March.
The onshore yuan traded at 6.9175, little changed on the day amid lingering doubts about frayed U.S.-China ties.
Trump on Sunday raised the possibility of decoupling the U.S. economy from China as part of a broad-ranging dispute with Beijing over China’s role in global trade and advanced technology.
The Australian dollar edged up to $0.7175 after the state of Victoria reported its lowest daily rise in new coronavirus infections in seven weeks on Monday, fuelling optimism that a deadly second wave there is subsiding.
The New Zealand dollar was steady at $0.6542.
(Reporting by Stanley White; Editing by Shri Navaratnam)
OTTAWA – Statistics Canada says wholesale sales, excluding petroleum, petroleum products, and other hydrocarbons and excluding oilseed and grain, rose 0.4 per cent to $82.7 billion in July.
The increase came as sales in the miscellaneous subsector gained three per cent to reach $10.5 billion in July, helped by strength in the agriculture supplies industry group, which rose 9.2 per cent.
The food, beverage and tobacco subsector added 1.7 per cent to total $15 billion in July.
The personal and household goods subsector fell 2.5 per cent to $12.1 billion.
In volume terms, overall wholesale sales rose 0.5 per cent in July.
Statistics Canada started including oilseed and grain as well as the petroleum and petroleum products subsector as part of wholesale trade last year, but is excluding the data from monthly analysis until there is enough historical data.
This report by The Canadian Press was first published Sept. 13, 2024.
VICTORIA – British Columbia is forecasting a record budget deficit and a rising debt of almost $129 billion less than two weeks before the start of a provincial election campaign where economic stability and future progress are expected to be major issues.
Finance Minister Katrine Conroy, who has announced her retirement and will not seek re-election in the Oct. 19 vote, said Tuesday her final budget update as minister predicts a deficit of $8.9 billion, up $1.1 billion from a forecast she made earlier this year.
Conroy said she acknowledges “challenges” facing B.C., including three consecutive deficit budgets, but expected improved economic growth where the province will start to “turn a corner.”
The $8.9 billion deficit forecast for 2024-2025 is followed by annual deficit projections of $6.7 billion and $6.1 billion in 2026-2027, Conroy said at a news conference outlining the government’s first quarterly financial update.
Conroy said lower corporate income tax and natural resource revenues and the increased cost of fighting wildfires have had some of the largest impacts on the budget.
“I want to acknowledge the economic uncertainties,” she said. “While global inflation is showing signs of easing and we’ve seen cuts to the Bank of Canada interest rates, we know that the challenges are not over.”
Conroy said wildfire response costs are expected to total $886 million this year, more than $650 million higher than originally forecast.
Corporate income tax revenue is forecast to be $638 million lower as a result of federal government updates and natural resource revenues are down $299 million due to lower prices for natural gas, lumber and electricity, she said.
Debt-servicing costs are also forecast to be $344 million higher due to the larger debt balance, the current interest rate and accelerated borrowing to ensure services and capital projects are maintained through the province’s election period, said Conroy.
B.C.’s economic growth is expected to strengthen over the next three years, but the timing of a return to a balanced budget will fall to another minister, said Conroy, who was addressing what likely would be her last news conference as Minister of Finance.
The election is expected to be called on Sept. 21, with the vote set for Oct. 19.
“While we are a strong province, people are facing challenges,” she said. “We have never shied away from taking those challenges head on, because we want to keep British Columbians secure and help them build good lives now and for the long term. With the investments we’re making and the actions we’re taking to support people and build a stronger economy, we’ve started to turn a corner.”
Premier David Eby said before the fiscal forecast was released Tuesday that the New Democrat government remains committed to providing services and supports for people in British Columbia and cuts are not on his agenda.
Eby said people have been hurt by high interest costs and the province is facing budget pressures connected to low resource prices, high wildfire costs and struggling global economies.
The premier said that now is not the time to reduce supports and services for people.
Last month’s year-end report for the 2023-2024 budget saw the province post a budget deficit of $5.035 billion, down from the previous forecast of $5.9 billion.
Eby said he expects government financial priorities to become a major issue during the upcoming election, with the NDP pledging to continue to fund services and the B.C. Conservatives looking to make cuts.
This report by The Canadian Press was first published Sept. 10, 2024.
Note to readers: This is a corrected story. A previous version said the debt would be going up to more than $129 billion. In fact, it will be almost $129 billion.
NANAIMO, B.C. – Former Bank of Canada governor Mark Carney says he’ll be advising the Liberal party to flip some the challenges posed by an increasingly divided and dangerous world into an economic opportunity for Canada.
But he won’t say what his specific advice will be on economic issues that are politically divisive in Canada, like the carbon tax.
He presented his vision for the Liberals’ economic policy at the party’s caucus retreat in Nanaimo, B.C. today, after he agreed to help the party prepare for the next election as chair of a Liberal task force on economic growth.
Carney has been touted as a possible leadership contender to replace Justin Trudeau, who has said he has tried to coax Carney into politics for years.
Carney says if the prime minister asks him to do something he will do it to the best of his ability, but won’t elaborate on whether the new adviser role could lead to him adding his name to a ballot in the next election.
Finance Minister Chrystia Freeland says she has been taking advice from Carney for years, and that his new position won’t infringe on her role.
This report by The Canadian Press was first published Sept. 10, 2024.
