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Dollar and yen gain on worries about virus and economic outlook – The Telegram

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By Stanley White

TOKYO (Reuters) – The dollar and the yen edged higher on Thursday as growing concerns about a rise in coronavirus cases underpinned safe-haven demand for both currencies.

The Australian dollar fell after data showed its economy shed twice as many jobs as expected in May, highlighting the damage caused by lockdown restrictions put in place by the government to contain the outbreak.

The British pound traded in a narrow range before a Bank of England meeting where policymakers are expected to expand quantitative easing in the face of a stuttering economy and rocky trade negotiations with the European Union.

A surge in new coronavirus infections in several U.S. states and the imposition of travel curbs in Beijing to stop a separate outbreak have served as a reminder that the pandemic could be a severe drag on the global economy for a protracted period.

“Upside for U.S. stocks and other risk assets has dwindled because more people are talking about a second wave of virus infections,” said Junichi Ishikawa, senior foreign exchange strategist at IG Securities in Tokyo.

“This supports the dollar and the yen because they are both safe havens. The pound has its own problems. The British economy is not in good shape and a hard Brexit remains a risk.”

The dollar traded at $1.1234 per euro on Thursday in Asia following a 0.2% gain in the previous session.

The greenback bought 0.9496 Swiss franc , holding onto a 0.3% gain on Wednesday.

The yen edged up to 106.79 against the dollar.

Sterling inched down to $1.2533, on course for a third day of losses. Against the euro, the pound was little changed at 89.66 pence .

A spike in new coronavirus infections and hospitalisations in several parts of the United States over the last two weeks points to a troubling trend because cases had been falling for more than a month.

China’s capital has cancelled scores of flights and blocked off some neighbourhoods to contain a coronavirus outbreak that has fanned fears of wider contagion.

The situation in both the United States and China has raised fresh concerns about the risks of re-opening economic activity before a vaccine has been developed.

The onshore yuan held steady at 7.0883 per dollar.

The People’s Bank of China on Thursday cut the rate on 14-day reverse repurchase agreements to 2.35% from 2.55% and injected 70 billion yuan ($9.88 billion) into the money market to boost liquidity.

The Australian dollar fell 0.44% to $0.6854, extending a pull back from a one-year high reached last week after data showed the Australian economy shed a quarter of a million jobs and the jobless rate jumped to the highest in almost two decades in May.

Across the Tasman Sea, the New Zealand dollar also fell to $0.6432 on equally grim data, which showed the economy shrank more than expected in the first quarter.

The yen jumped by more than half a percent against the Aussie and the kiwi , reinforcing the heightened risk aversion.

The British pound got off to a quiet start in Asia but will come into focus later in the day as traders brace for the Bank of England’s policy meeting.

The BOE is expected to boost its quantitative easing programme by 100 billion pounds ($125 billion), with some analysts eyeing an even larger increase amid concerns about the economic outlook.

Britain is seeking a free trade agreement with the EU, which it left on Jan. 31, but negotiators have so far made little progress, raising the risk both sides will fail to agree a deal before a deadline at the end of the year.

(Reporting by Stanley White; Editing by Shri Navaratnam)

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City Council approves ideas meant to stimulate the local economy – EverythingGP

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Photo by Curtis Galbraith

By Curtis Galbraith

City Hall

Aug 12, 2020 5:30 AM

City Council has decided how it wants to allocate some of the money in an economic recovery fund set up in response to the pandemic.

The biggest share, $450,000, will go into the Beautification & Patio Grant for businesses across the city. The grants would cover half the cost, up to $15,000, of adding a patio or improving signage, facades, or landscaping.

Mayor Bill Given says the city wants to stimulate the economy by having owners re-invest in their businesses.

“This new program is essentially modelled after our very successful Downtown Incentive Program. (It) led to the redevelopment of a lot of the facades on downtown businesses was also a matching grant program and for every $1 the city invested in that program; we saw about $4 in actual economic activity happen. So, we saw this as a really great opportunity for those property owners who are interested and willing to partner with the city in upgrading their businesses and improving the general appearance of the community and that is something that puts tradespeople to work immediately.”

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UK crashes into deepest recession of any major economy – CNN

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This crash in GDP in the April-June period is the worst since quarterly records began in 1955 and follows a 2.2% contraction in the first quarter. Industries most exposed to government lockdown measures to contain the coronavirus pandemic — services, production and construction — saw record drops.
Boris Johnson's dream of a 'Global Britain' is turning into a nightmare
“Today’s figures confirm that hard times are here,” UK finance minister Rishi Sunak said in a statement. “Hundreds of thousands of people have already lost their jobs, and sadly in the coming months many more will. But while there are difficult choices to be made ahead, we will get through this, and I can assure people that nobody will be left without hope or opportunity.”
Compared with the end of 2019, UK economic output fell by a cumulative 22.1% in the first six months of 2020, a worse outcome than Germany, France and Italy, and double the 10.6% fall recorded in the United States, the Office for National Statistics said.
“The larger contraction primarily reflects how lockdown measures have been in place for a larger part of this period in the UK,” the ONS added.
Britain imposed a strict lockdown two weeks later than Italy, 10 days after Spain and a week after France, despite swelling coronavirus cases. That meant it took longer to get the spread of the virus under control, which prolonged the need for restrictions that kept many businesses closed.
For example, Italy allowed restaurants, cafes and hairdressers to reopen in the middle of May, whereas the United Kingdom waited until July 4 to do the same.
Could the United Kingdom become an emerging market?Could the United Kingdom become an emerging market?
An easing of some lockdown restrictions in June, including the reopening of nonessential shops, delivered an immediate boost to the economy, with GDP increasing 8.7% on the previous month, according to the ONS.
The UK economy is heavily reliant on services and household spending, both of which posted record declines in the second quarter, as consumers who were holed up at home spent less money and saved more. In addition, millions of workers were furloughed and many have now been laid off.
The UK economy has shed 730,000 jobs since the coronavirus pandemic shuttered businesses in March, with the young, the old and the self-employed bearing the brunt of the unemployment crisis.
Kallum Pickering, a senior economist at Berenberg, said the GDP figures do not bode well for the rest of the year.
“Typically, recession data are subject to heavy revisions,” he said in a research note. “Nevertheless, taken at face value, the bigger-than-expected contraction suggests some downside risk to our call of a 9.5% contraction in full year 2020.”

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U.K. economy officially in recession after 20.4 per cent Q2 slump – CTV News

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LONDON —
The U.K. economy has officially fallen into a recession after official figures showed it contracting by a record 20.4 per cent in the second quarter as a result of lockdown measures put in place to counter the coronavirus pandemic.

The slump recorded by the Office for National Statistics follows a 2.2 per cent quarterly contraction in the first three months of the year. As such, the U.K. economy is in a recession — commonly defined as two quarters of negative growth.

Unlike other countries, Britain’s statistics agency provides monthly figures to accompany the quarterly numbers and these show some hope that the economy is healing in the wake of the easing of some lockdown restrictions. In June, when shops selling non-essential goods were allowed to reopen, the British economy grew by a monthly rate of 8.7 per cent.

“The economy began to bounce back in June with shops reopening, factories beginning to ramp up production and house-building continuing to recover,” said statistician Jonathan Athow.

Despite this, he said the economy remains a sixth below its level in February, before the virus started to impact.

The British government hopes that the further easing of the economy over recent months, such as the reopening of the hospitality sector in July, will allow the economy to claw back further ground.

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