LONDON, (Reuters) – The dollar steadied against major currencies on Monday as traders waited for more data on the U.S. economy, after a disappointing jobs report last week ended a rally in the greenback.
The euro was little changed against the dollar, after data showed German industry avoided a contraction in December. Despite coronavirus lockdowns at home and abroad, demand from China helped export-oriented manufacturers in Europe’s largest economy weather the COVID-19 pandemic.
Speculators have been reducing short positions in the dollar, but some analysts say better U.S. economic data and continued progress in fighting the COVID-19 pandemic will be needed for further dollar gains.
“Although much of the optimism towards U.S. macro is probably well founded, it is less apparent this will come to the data …,” said Kristoffer Kjær Lomholt, chief analyst, FX and rates strategy at Danske Bank.
“Indeed, the U.S. jobs recovery has more or less stalled, and that did leave some space to take EUR/USD higher. The next big theme that may be priced further in to spot is moving ahead with U.S. fiscal talks.”
Against the euro, the dollar traded 0.1% higher at $1.2032 after a 0.7% slump on Friday. Due today is Sentix’s euro zone investor sentiment index for February due at 0930 GMT.
In a note to clients, J.P. Morgan strategists said they “have growing confidence of underperformance of EUR vs USD.”
“That warrants two changes to the portfolio: 1) rotating away from USD to fund trades primarily out of EUR, and 2) selling EUR/USD outright in spot.”
Graphic: Euro zone investor sentiment on the uptick, https://fingfx.thomsonreuters.com/gfx/mkt/rlgvdemlwpo/Pasted%20image%201612774128948.png
The British pound bought $1.3715, 0.15% lower to the dollar.
The dollar was quoted at 105.57 yen, having pulled back from a three-month high reached on Friday.
The U.S. economy created fewer jobs than expected in January and job losses the previous month were greater than initially reported, data at the end of last week showed.
U.S. consumer prices and consumer sentiment reports later this week will help determine whether a recent rise in inflation expectations and Treasury yields was justified.
Any disappointing numbers from either report could knock the dollar lower, some analysts said. Investors are also closely monitoring a U.S. debate on additional fiscal stimulus.
President Joe Biden and his Democrats are pushing ahead with $1.9 trillion COVID-19 relief package. House of Representatives Speaker Nancy Pelosi has predicted the final relief legislation could pass Congress before March 15.
The dollar index against a basket of six major currencies stood at 91.130, after falling 0.6% on Friday.
Speculators’ net bearish bets on the dollar fell to $29.95 billion for the week ended Feb. 2, compared with a net short position of $33.81 billion for the previous week, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data.
In the cryptocurrency market, ethereum spot prices rose 1.6% to $1,642 after the listing of ethereum futures on the Chicago Mercantile Exchange on Sunday.
Bitcoin, the world’s biggest cryptocurrency by market capitalisation, rose 1% to $39,244.
The onshore yuan edged up to 6.4569 per dollar, but trade is likely to be subdued before the week-long Chinese New Year holidays beginning Thursday.
Elsewhere, the Australian dollar was off 0.15% at $0.7665. Across the Tasman Sea, the New Zealand dollar traded flat at $0.7192.
(Reporting by Ritvik Carvalho; additional reporting by Stanley White in Tokyo; editing by Larry King)
OTTAWA – Canada’s unemployment rate held steady at 6.5 per cent last month as hiring remained weak across the economy.
Statistics Canada’s labour force survey on Friday said employment rose by a modest 15,000 jobs in October.
Business, building and support services saw the largest gain in employment.
Meanwhile, finance, insurance, real estate, rental and leasing experienced the largest decline.
Many economists see weakness in the job market continuing in the short term, before the Bank of Canada’s interest rate cuts spark a rebound in economic growth next year.
Despite ongoing softness in the labour market, however, strong wage growth has raged on in Canada. Average hourly wages in October grew 4.9 per cent from a year ago, reaching $35.76.
Friday’s report also shed some light on the financial health of households.
According to the agency, 28.8 per cent of Canadians aged 15 or older were living in a household that had difficulty meeting financial needs – like food and housing – in the previous four weeks.
That was down from 33.1 per cent in October 2023 and 35.5 per cent in October 2022, but still above the 20.4 per cent figure recorded in October 2020.
People living in a rented home were more likely to report difficulty meeting financial needs, with nearly four in 10 reporting that was the case.
That compares with just under a quarter of those living in an owned home by a household member.
Immigrants were also more likely to report facing financial strain last month, with about four out of 10 immigrants who landed in the last year doing so.
That compares with about three in 10 more established immigrants and one in four of people born in Canada.
This report by The Canadian Press was first published Nov. 8, 2024.
The Canadian Institute for Health Information says health-care spending in Canada is projected to reach a new high in 2024.
The annual report released Thursday says total health spending is expected to hit $372 billion, or $9,054 per Canadian.
CIHI’s national analysis predicts expenditures will rise by 5.7 per cent in 2024, compared to 4.5 per cent in 2023 and 1.7 per cent in 2022.
This year’s health spending is estimated to represent 12.4 per cent of Canada’s gross domestic product. Excluding two years of the pandemic, it would be the highest ratio in the country’s history.
While it’s not unusual for health expenditures to outpace economic growth, the report says this could be the case for the next several years due to Canada’s growing population and its aging demographic.
Canada’s per capita spending on health care in 2022 was among the highest in the world, but still less than countries such as the United States and Sweden.
The report notes that the Canadian dental and pharmacare plans could push health-care spending even further as more people who previously couldn’t afford these services start using them.
This report by The Canadian Press was first published Nov. 7, 2024.
Canadian Press health coverage receives support through a partnership with the Canadian Medical Association. CP is solely responsible for this content.
As Canadians wake up to news that Donald Trump will return to the White House, the president-elect’s protectionist stance is casting a spotlight on what effect his second term will have on Canada-U.S. economic ties.
Some Canadian business leaders have expressed worry over Trump’s promise to introduce a universal 10 per cent tariff on all American imports.
A Canadian Chamber of Commerce report released last month suggested those tariffs would shrink the Canadian economy, resulting in around $30 billion per year in economic costs.
More than 77 per cent of Canadian exports go to the U.S.
Canada’s manufacturing sector faces the biggest risk should Trump push forward on imposing broad tariffs, said Canadian Manufacturers and Exporters president and CEO Dennis Darby. He said the sector is the “most trade-exposed” within Canada.
“It’s in the U.S.’s best interest, it’s in our best interest, but most importantly for consumers across North America, that we’re able to trade goods, materials, ingredients, as we have under the trade agreements,” Darby said in an interview.
“It’s a more complex or complicated outcome than it would have been with the Democrats, but we’ve had to deal with this before and we’re going to do our best to deal with it again.”
American economists have also warned Trump’s plan could cause inflation and possibly a recession, which could have ripple effects in Canada.
It’s consumers who will ultimately feel the burden of any inflationary effect caused by broad tariffs, said Darby.
“A tariff tends to raise costs, and it ultimately raises prices, so that’s something that we have to be prepared for,” he said.
“It could tilt production mandates. A tariff makes goods more expensive, but on the same token, it also will make inputs for the U.S. more expensive.”
A report last month by TD economist Marc Ercolao said research shows a full-scale implementation of Trump’s tariff plan could lead to a near-five per cent reduction in Canadian export volumes to the U.S. by early-2027, relative to current baseline forecasts.
Retaliation by Canada would also increase costs for domestic producers, and push import volumes lower in the process.
“Slowing import activity mitigates some of the negative net trade impact on total GDP enough to avoid a technical recession, but still produces a period of extended stagnation through 2025 and 2026,” Ercolao said.
Since the Canada-United States-Mexico Agreement came into effect in 2020, trade between Canada and the U.S. has surged by 46 per cent, according to the Toronto Region Board of Trade.
With that deal is up for review in 2026, Canadian Chamber of Commerce president and CEO Candace Laing said the Canadian government “must collaborate effectively with the Trump administration to preserve and strengthen our bilateral economic partnership.”
“With an impressive $3.6 billion in daily trade, Canada and the United States are each other’s closest international partners. The secure and efficient flow of goods and people across our border … remains essential for the economies of both countries,” she said in a statement.
“By resisting tariffs and trade barriers that will only raise prices and hurt consumers in both countries, Canada and the United States can strengthen resilient cross-border supply chains that enhance our shared economic security.”
This report by The Canadian Press was first published Nov. 6, 2024.
