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Dollar catches footing as inflation pressures rates outlook

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The dollar steadied on Monday after its steepest weekly loss in more than a month, as traders weigh the effect of inflation on the relative pace of looming rate hikes – with a wary eye on U.S. growth data and a European Central Bank meeting.

The greenback had softened, especially against the yen, after Federal Reserve Chair Jerome Powell said on Friday it was time to start cutting back asset purchases, though not yet time to begin raising interest rates.

His remarks came as investors have priced in Fed rate hikes starting in the second half of next year and yet have begun to trim long dollar positions in anticipation that other central banks could get moving even sooner.

On Monday, the dollar was firm at $1.1643 per euro and found a footing on the yen at 113.54 after Friday’s slide. The Australian and New Zealand dollars were held below the multi-month peaks they had scaled during last week. [AUD/]

The Antipodeans, along with sterling, had bounded ahead this month as traders scrambled to price in higher rates while inflation runs hot, with markets now eyeing a near 60% chance of a Bank of England hike next week.

Sterling was up 0.1% at $1.3772, but analysts were cautious about further gains especially as the Fed edges closer to tapering and policy tightening. The Aussie was steady at $0.7473 and the kiwi at $0.7157.

“Dollar risks remain skewed to the upside,” said Kim Mundy, a currency analyst at the Commonwealth Bank of Australia in Sydney.

“(Fed) members are slowly conceding that inflation risks are skewed to the upside (and) the upshot is that interest rate markets can continue to price a more aggressive Fed Funds rate hike cycle which can support the dollar.”

This week, Australian inflation data due on Wednesday is likely to set the tone for the next stage in a tussle between traders and a resolutely dovish central bank.

On Thursday, U.S. growth data is expected to show a slowdown in growth as consumer confidence has faltered, but a surprise on either side might have consequences for the interest rate outlook.

Also on Thursday the Bank of Japan and the European Central Bank meet. Neither are expected to adjust policy, but in Europe market gauges of projected inflation are at odds with the bank’s guidance.

In the background, traders remain nervous about trouble brewing at indebted developer China Evergrande Group. It surprised investors by averting default with a last-minute coupon payment last week, but other pressing debts loom.

China’s yuan held just shy of a five-month peak in offshore trade at 6.3804 per dollar. Cryptocurrencies were steady below the heights reached last week, with bitcoin up 2% at $62,000.

In emerging markets the beaten-down Turkish lira was braced for selling as state banks are expected to follow a surprise rate cut from the central bank.

========================================================

Currency bid prices at 0110 GMT

Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid

Previous Change

Session

Euro/Dollar

$1.1645 $1.1646 -0.01% -4.69% +1.1649 +1.1626

 

Dollar/Yen

113.7350 113.4900 +0.18% +10.07% +113.7400 +113.5750

 

Euro/Yen

132.45 132.17 +0.21% +4.35% +132.4500 +132.1200

 

Dollar/Swiss

0.9163 0.9162 +0.00% +3.56% +0.9169 +0.9157

 

Sterling/Dollar

1.3771 1.3756 +0.13% +0.81% +1.3775 +1.3752

 

Dollar/Canadian

1.2362 1.2368 -0.03% -2.90% +1.2379 +1.2358

 

Aussie/Dollar

0.7478 0.7470 +0.11% -2.79% +0.7478 +0.7465

 

NZ

Dollar/Dollar 0.7161 0.7150 +0.15% -0.29% +0.7162 +0.7148

 

 

All spots

Tokyo spots

Europe spots

Volatilities

Tokyo Forex market info from BOJ

 

(Reporting by Tom Westbrook; Editing by Sam Holmes)

Economy

Mindset Matters: The Responsibility Of Corporate Behavior In Magnifying The Disability Economy – Forbes

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Through a series of columns starting with the previous Mindset Matters piece, the hope is to open a dialogue around the significance of the emerging Disability Economy and discover some of the intricacies that are key to its very growth. As we mine deeper into this burgeoning economy of identity it is critical to recognize that this very concept is not static, but rather filled with complexity and nuances that must be explored further. If companies are going to truly embrace disability inclusion as a key stakeholder within their leadership strategy and a central theme to their long-term business success, then they must integrate key areas of knowledge that are essential to adopting a framework that radiates true disability confidence.

Corporations who choose to participate in this budding Disability Economy must understand the holistic nature of what needs to be done. A good starting point is to acknowledge the fact that the disability community is diverse, that the lived experience of disability cannot be seen through one lens, rather it must be seen through a diversity of perspectives that offer organizations a multitude of opportunities. Corporate leadership should have an awareness that while the Disability Economy is continuing to grow, it is ephemeral, in that it will continually change with each generation and each situation demanding new requirements that necessitate innovative ways of thinking and operating. It is this very awareness that will be critical for organizations to foster greater economic opportunities within this uncharted space.

So, what do businesses need to know? Corporate leadership must understand that to honestly immerse themselves within the Disability Economy in an authentic way they must identify with the value of needs. It is this understanding that must become the fundamental building block for corporate leaders to work on as they move forward while embracing disability into their business strategy. The value of needs is based on the notion that amplifying soft skills such as listening, trust, and empathy are central to pushing past barriers that are critical to gaining access to this new marketplace. 

The adage “Nothing About Us, Without Us” cannot be far from the mind of any corporate leader who is engaging in the disability space. For any corporate leader to be involved in the Disability Economy, one must begin with a level of trust. No matter what the product or service, having buy-in from the disability community is essential to the process. Understanding the communities’ needs is imperative, but it is also the first salvo in starting an ongoing dialogue between corporate entities and the disability community themselves. It is through this process that the potential for real evolution can happen, and new products and services can have real meaning within this growing market. 

As corporate leaders realize the value of need, the next step is making them habitual. The role of need must become an essential calling card for any organization doing business within the Disability Economy. It is not only critical for larger corporations but has value across many other branches of the emergent Disability Economy from entrepreneurship, social investors, to nonprofit organizations, and even government and educational institutions. These are topics that we will investigate further in future columns, but for the moment it is important to acknowledge the role behaviors play in expanding economic opportunities by celebrating the value of both the individual and the collective to shape the reality of the future.

Corporate leaders say they want to “do the right thing”, yet the question lies not just in the want, but the how. It is time for organizations and their leadership teams to be vulnerable and recognize that it is okay not to know. By identifying the needs of others to become a part of the habit of daily business life gives corporate leaders the flexibility to not only be prepared for change but move beyond a level of unconscious bias that offers a continuous mode of learning that will impact business both socially and economically creating opportunities for true disruption that can recalibrate the culture of business for the next century.

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Japan economy contracts 3.6% in 3Q as virus hits spending – Yahoo Canada Finance

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TOKYO (AP) — Japan’s economy contracted at a 3.6% annual rate in July-September as a wave of coronivirus infections crimped travel and other activities, the government said Wednesday.

The estimate for the last quarter, downgraded from an earlier report of a 3.0% contraction, reflected weakness in consumer spending and trade, the government said.

In quarterly terms, the measure used for most economies, the economy contracted 0.9%, compared to the earlier estimate of a 0.8% contraction.

The world’s third-largest economy was in a slump before the pandemic hit. Its recovery has been fitful thanks to precautions taken to curb COVID-19 infections. Troubles with supply chains, especially for computer chips used in autos, have also taken a toll.

Japan’s latest big coronavirus outbreak, in the late summer, has receded for now with a sharp drop in cases. But it hit during the usually busy summer travel season, with calls for restricted business activity and travel hurting restaurants, hotels and other service sector industries.

Consumer spending is recovering and will likely drive a recovery in the current quarter, Norihiro Yamaguchi of Oxford Economics said in a commentary.

“With supply chain disruptions easing in the auto sector, production and exports are also projected to recover, albeit at a moderate pace,” he said.

The latest data showed a lower level of private inventories than earlier reported and weaker government and consumer spending. It also showed wages contracted by 0.4%, instead of growing by 0.1% as earlier reported.

Japan’s Cabinet has approved a record 56 trillion yen, or $490 billion stimulus package, including cash handouts and aid to ailing businesses, to help the economy out of the doldrums worsened by the coronavirus pandemic. Parliamentary approval of the plan is expected this month.

The Associated Press

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The global economic transition to a green economy – Lombard Odier

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