The dollar held its recent gains in early Asia trading on Wednesday as investors looked towards a key Federal Reserve policy meeting to see if it would reinforce growing market expectations for earlier rate rises next year.
The dollar index which measures the greenback against six major peers was at 96.557, having gained 0.5% so far this week in choppy trading. It is testing last week’s 96.954, which would be a two-week top.
The dollar’s gains have been broad-based.
The euro last traded at $1.1265, not far from $1.1184 hit in November, which was its lowest in over a year. The pound languished at $1.13326 as Britain grapples with rising cases of the Omicron variant of the new coronavirus.
But the Federal Reserve meeting due to wrap up later in the day stood out as the centrepiece of a week full of central bank meetings.
Kim Mundy, currency strategist at CBA, said currency markets were “taking a tiny break from Omicron” even though it was “very much bubbling away in the background.”
“It’s hard for it to be the dominant focus when you’ve got the FOMC, and the Bank of England and European Central Bank lining up to make policy decisions,” said Mundy.
She said traders were watching the U.S. Federal Open Market Committee for two things: firstly whether they accelerate tapering of their bond buying programme, and secondly whether policymakers bring forward their projections for interest rate rises, in their so-called “dot plot”.
Markets have been pricing for the Fed to wrap up bond-buying around March and then proceed with one or maybe two rate hikes in 2022. [FEDWWATCH]
Elsewhere, a Reuters poll showed analysts have reversed earlier expectations that the Bank of England will raise rates on Thursday, because of the spread of Omicron in Britain. [BOEWATCH]
Markets currently expect the Fed to say it will taper its asset buying by between $25 billion-$30 billion a month from $15 billion currently https://www.reuters.com/business/federal-reserves-taper-how-does-it-work-2021-11-03.
Mundy said a figure at the lower end of that range could cause some short-term dollar weakness.
The yen softened slightly to 113.78 per dollar, continuing a weakening trend. The safe-haven currency had firmed sharply in late November, when the Omicron variant first emerged.
The Australian dollar was little changed at $0.7107, and the Canadian dollar was weaker at 1.2854 per dollar, having been bruised by oil prices coming off recent peaks. [O/R]
Investors in the Australian currency were keeping a close eye on Chinese economic activity data due later in the day, given that China is Australia’s largest trading partner.
Bitcoin was doing little at $48,500.
(Reporting by Alun John; Editing by Ana Nicolaci da Costa)
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.
