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 – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
