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FOREX-Dollar buoyed by signs of solid U.S. economy, pound ticks up – Reuters

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* U.S. data points to modest growth, supports dollar

* Pound steadies after 2.6% fall last week

* North Korea tensions could upset calm markets

* Graphic: World FX rates in 2019 tmsnrt.rs/2egbfVh

By Hideyuki Sano

TOKYO, Dec 23 (Reuters) – The dollar held firm at the start of a holiday-thinned week on Monday, as U.S. data pointed to solid economic growth while the British pound bounced slightly after having suffered its biggest weekly fall in three years.

A batch of economic data published on Friday showed the U.S. economy, already in its longest expansion in history, appears to have maintained the moderate pace of growth as the year ended, supported by a strong labour market.

Gross domestic product increased at a 2.1% annualised rate, the Commerce Department said in its third estimate of third-quarter GDP. That was unrevised from November’s estimate.

“The U.S. economy appears to have stopped slowing. There is no indication it will be hitting a recession,” said Ayako Sera, market economist at Sumitomo Mitsui Trust Bank.

Earlier this year, investors were spooked by fears over the possibility of a U.S. recession when the U.S. yield curve inverted, which has been historically one of the most reliable signs of a U.S. downturn.

Separate data showed consumer spending, which accounts for more than two-thirds of U.S. economic activity, rose 0.4% last month as households stepped up purchases of motor vehicles and spent more on healthcare.

That contrasted with an unexpected deterioration in German consumer sentiment.

The euro stood at $1.10778, little changed on the day but in retreat since it hit a four-month high of $1.12 on Dec. 13.

The dollar index was at 97.659, flat on the day but maintaining its recovery trend since hitting a five-month low of 96.605 on Dec. 12.

The dollar has been supported by optimism over the global economy since Washington and Beijing came to an interim trade agreement earlier this month.

China said on Monday it would lower tariffs on products ranging from frozen pork to some type of semiconductors next year, as Beijing looks to boost imports amid a slowing economy and a trade war with the United States.

U.S. President Donald Trump said on Saturday the United States and China would “very shortly” sign their so-called Phase 1 trade pact.

Against the yen, the dollar changed hands at 109.41 yen , little changed on the day and not far from a six-month high of 109.73 touched earlier this month.

“One thing to look at is whether market players cut their (yen-short) positions ahead of the holiday period on concerns there could be a flash crash like a year ago,” said Minori Uchida, chief currency analyst at MUFG Bank.

The dollar tumbled as much as 4.4% on the second trading day of this year as a lack of yen liquidity, due to a Japanese market holiday, amplified the dollar/yen’s fall sparked by a rare revenue warning from Apple Inc.

Currency speculators have cut their net short positions in the yen slightly in the week that ended last Tuesday after having increased bets against the currency constantly for a few months, data from the U.S. financial watchdog showed on Friday.

Some noted concerns over increasing tensions between North Korea and the United States.

North Korean leader Kim Jong Un held a meeting of top military officials to discuss boosting the country’s military capability, the state news agency reported on Sunday amid heightened concerns the North may be about to return to confrontation with Washington.

Sterling traded at $1.3011, up slightly as it regained some stability after hitting a 2-1/2-week low of $1.2979 on Friday.

It fell 2.6% last week, the biggest weekly fall since October 2016, after UK Prime Minister Boris Johnson set December 2020 as a hard deadline to reach a trade agreement. (Editing by Lincoln Feast and Jacqueline Wong)

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China's economy grows 2.3% in 2020 as recovery quickens – CNN

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The world’s second largest economy expanded 2.3% in 2020 compared to a year earlier, according to government statistics released Monday.
It’s China’s slowest annual growth rate in decades — not since 1976 has the country had a worse year, when GDP shrunk 1.6% during a time of social and economic tumult.
But during a year when a crippling pandemic plunged major world economies into recession, China has clearly come out on top. The expansion also beat expectations: The International Monetary Fund, for example, predicted that China’s economy would grow 1.9% in 2020. It’s the only major world economy the IMF expected to grow at all.
The pace of the recovery is also accelerating. China’s economy grew 6.5% in the fourth quarter compared to a year earlier, according to the government. That’s faster than the 4.9% growth recorded in the third quarter.
This is a developing story and will be updated.

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China’s Economy Grew 2.3% in 2020, Accelerating Global Rise – Yahoo Canada Finance

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The Canadian Press

Heavily fortified statehouses around US see small protests

Small groups of right-wing protesters — some of them carrying rifles — gathered outside heavily fortified statehouses around the country Sunday, outnumbered by National Guard troops and police brought in to prevent a repeat of the violence that erupted at the U.S. Capitol. As darkness fell, there were no reports of any clashes. Security was stepped up in recent days after the FBI warned of the potential for armed protests in Washington and at all 50 state capitol buildings ahead of President-elect Joe Biden’s inauguration on Wednesday. Crowds of only a dozen or two demonstrated at some boarded-up, cordoned-off statehouses, while the streets in many other capital cities remained empty. Some protesters said they were there to back President Donald Trump. Others said they had instead come to voice their support for gun rights or decry government overreach. “I don’t trust the results of the election,” said Michigan protester Martin Szelag, a 67-year-old semi-retired window salesman from Dearborn Heights. He wore a sign around his neck that read, in part, “We will support Joe Biden as our President if you can convince us he won legally. Show us the proof! Then the healing can begin.” As the day wore on with no bloodshed around the U.S., a sense of relief spread among officials, though they were not ready to let their guard down. The heavy law enforcement presence may have kept turnout down. In the past few days, some extremists had warned others against falling into what they called a law enforcement trap. Washington State Patrol spokesman Chris Loftis said he hoped the apparently peaceful day reflected some soul-searching among Americans. “I would love to say that it’s because we’ve all taken a sober look in the mirror and have decided that we are a more unified people than certain moments in time would indicate,” he said. The security measures were intended to safeguard seats of government from the type of violence that broke out at the U.S. Capitol on Jan. 6, when far-right Trump supporters galvanized by his false claims that the election had been stolen from him overran the police and bashed their way into the building while Congress was certifying the Electoral College vote. The attack left a Capitol police officer and four others dead. More than 125 people have been arrested over the insurrection. Dozens of courts, election officials and Trump’s own attorney general have all said there was no evidence of widespread fraud in the presidential race. On Sunday, some statehouses were surrounded by new security fences, their windows were boarded up, and extra officers were on patrol. Legislatures generally were not in session over the weekend. Tall fences also surrounded the U.S. Capitol. The National Mall was closed to the public, and the mayor of Washington asked people not to visit. Some 25,000 National Guard troops from around the country are expected to arrive in the city in the coming days. U.S. defence officials told The Associated Press those troops would be vetted by the FBI to ward off any threat of an insider attack on the inauguration. The roughly 20 protesters who showed up at Michigan’s Capitol, including some who were armed, were significantly outnumbered by law enforcement officers and members of the media. Tensions have been running high in the state since authorities foiled a plot to kidnap Democratic Gov. Gretchen Whitmer last year. At the Ohio Statehouse, about two dozen people, including several carrying long guns, protested outside under the watchful eyes of state troopers before dispersing as it began to snow. Kathy Sherman, who was wearing a visor with “Trump” printed on it, said she supports the president but distanced herself from the mob that breached the U.S. Capitol. “I’m here to support the right to voice a political view or opinion without fear of censorship, harassment or the threat of losing my job or being physically assaulted,” she said. Ohio Gov. Mike DeWine, a Republican, said he was pleased with the outcome but stressed that authorities “continue to have concerns for potential violence in the coming days, which is why I intend to maintain security levels at the Statehouse as we approach the presidential inauguration.” Utah’s new governor, Republican Spencer Cox, shared photos on his Twitter account showing him with what appeared to be hundreds of National Guard troops and law enforcement officers standing behind him, all wearing masks. Cox called the quiet protests a best-case scenario and said many ”agitating groups” had cancelled their plans for the day. At Oregon’s Capitol, fewer than a dozen men wearing military-style outfits, black ski masks and helmets stood nearby with semiautomatic weapons slung across their bodies. Some had upside-down American flags and signs reading such things as “Disarm the government.” At the Texas Capitol, Ben Hawk walked with about a dozen demonstrators up to the locked gates carrying a bullhorn and an AR-15 rifle hanging at the side of his camouflage pants. He condemned the insurrection at the U.S. Capitol and said he did not support Trump. “All we came down here to do today was to discuss, gather, network and hang out. And it got blown and twisted completely out of proportion,” Hawk said. At Nevada’s Capitol, where demonstrators supporting Trump have flocked most weekends in recent months, all was quiet except for a lone protester with a sign. “Trump Lost. Be Adults. Go Home,” it read. More than a third of governors had called out the National Guard to help protect their capitols and assist local law enforcement. Several governors declared states of emergency, and others closed their capitols to the public until after Biden’s inauguration. Some legislatures also cancelled sessions or pared back their work for the coming week. Even before the violence at the Capitol, some statehouses had been the target of vandals and angry protesters during the past year. Last spring, armed protesters entered the Michigan Capitol to object to coronavirus lockdowns. People angry over the death of George Floyd under a Minneapolis police officer’s knee vandalized capitols in several states, including Colorado, Ohio, Texas and Wisconsin. Last last month, crowds in Oregon forced their way into the Capitol in Salem to protest its closure to the public during a special legislative session on coronavirus measures. Amid the potential for violence in the coming days, the building’s first-floor windows were boarded up and the National Guard was brought in. “The state capitol has become a fortress,” said Oregon Senate President Peter Courtney, a Democrat. “I never thought I’d see that. It breaks my heart.” ___ Associated Press writers Farnoush Amiri in Columbus, Ohio; Gillian Flaccus in Salem, Oregon; Mike Householder and David Eggert in Lansing, Michigan; Meg Kinnard in Columbia, South Carolina; Rachel La Corte in Olympia, Washington; Sam Metz in Carson City, Nevada; Marc Scolforo in Harrisburg, Pennsylvania; and Paul Weber in Austin, Texas, contributed to this report. David A. Lieb And Adam Geller, The Associated Press

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Economy

Economy Spiraling, Vexed Central Banks, Rich Get Richer: Eco Day – Bloomberg

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Economy Spiraling, Vexed Central Banks, Rich Get Richer: Eco Day  Bloomberg



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