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The Canadian dollar extends monthly win streak

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Canadian dollar

The Canadian dollar was little changed against the greenback on Monday, notching its fourth straight monthly gain as oil rose and a recent surge in the administration of COVID-19 vaccines to Canadians bolstered the outlook for the domestic economy.

With London and New York markets closed for holidays, the Canadian dollar was trading nearly unchanged at 1.2064 to the greenback, or 82.89 U.S. cents. For May, it was up 1.9%, extending a string of monthly gains that started in February.

The currency was helped this month by higher commodity prices and a broadly weaker U.S. dollar, as well as a jump in Canadian vaccination levels, said Michael Goshko, corporate risk manager at Western Union Business Solutions.

The Canadian economy “is going to come back very strongly in the second half of the year,” Goshko said.

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The share of Canadians who have received at least one dose of a COVID-19 vaccine has soared to 57% from 33% at the start of the month, data from the Our World in Data project at the University of Oxford shows.

Canada‘s current account balance in the first quarter swung to a surplus for the first time since 2008, mainly boosted this year by exports of oil and lumber, data showed on Monday.

Oil rose 0.9% on Monday, helped by growing optimism that fuel demand will grow in the next quarter, while the U.S. dollar fell against a basket of major currencies..

Canada‘s GDP data for the first quarter is due on Tuesday and the May jobs report is due on Friday, which could offer clues on the Bank of Canada‘s policy outlook.

Canadian government bond yields eased across the curve, with the 10-year down 1.2 basis points at 1.488%.

 

(Reporting by Fergal Smith; Editing by Bernadette Baum and Peter Cooney)

was little changed against the greenback on Monday, notching its fourth straight monthly gain as oil rose and a recent surge in the administration of COVID-19 vaccines to Canadians bolstered the outlook for the domestic economy.

With London and New York markets closed for holidays, the Canadian dollar was trading nearly unchanged at 1.2064 to the greenback, or 82.89 U.S. cents. For May, it was up 1.9%, extending a string of monthly gains that started in February.

The currency was helped this month by higher commodity prices and a broadly weaker U.S. dollar, as well as a jump in Canadian vaccination levels, said Michael Goshko, corporate risk manager at Western Union Business Solutions.

The Canadian economy “is going to come back very strongly in the second half of the year,” Goshko said.

The share of Canadians who have received at least one dose of a COVID-19 vaccine has soared to 57% from 33% at the start of the month, data from the Our World in Data project at the University of Oxford shows.

Canada‘s current account balance in the first quarter swung to a surplus for the first time since 2008, mainly boosted this year by exports of oil and lumber, data showed on Monday.

Oil rose 0.9% on Monday, helped by growing optimism that fuel demand will grow in the next quarter, while the U.S. dollar fell against a basket of major currencies..

Canada‘s GDP data for the first quarter is due on Tuesday and the May jobs report is due on Friday, which could offer clues on the Bank of Canada‘s policy outlook.

Canadian government bond yields eased across the curve, with the 10-year down 1.2 basis points at 1.488%.

 

(Reporting by Fergal Smith; Editing by Bernadette Baum and Peter Cooney)

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China Wants Everyone to Trade In Their Old Cars, Fridges to Help Save Its Economy

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China’s world-beating electric vehicle industry, at the heart of growing trade tensions with the US and Europe, is set to receive a big boost from the government’s latest effort to accelerate growth.

That’s one takeaway from what Beijing has revealed about its plan for incentives that will encourage Chinese businesses and households to adopt cleaner technologies. It’s widely expected to be one of this year’s main stimulus programs, though question-marks remain — including how much the government will spend.

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German Business Outlook Hits One-Year High as Economy Heals

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German business sentiment improved to its highest level in a year — reinforcing recent signs that Europe’s largest economy is exiting two years of struggles.

An expectations gauge by the Ifo institute rose to 89.9. in April from a revised 87.7 the previous month. That exceeds the 88.9 median forecast in a Bloomberg survey. A measure of current conditions also advanced.

“Sentiment has improved at companies in Germany,” Ifo President Clemens Fuest said. “Companies were more satisfied with their current business. Their expectations also brightened. The economy is stabilizing, especially thanks to service providers.”

A stronger global economy and the prospect of looser monetary policy in the euro zone are helping drag Germany out of the malaise that set in following Russia’s attack on Ukraine. European Central Bank President Christine Lagarde said last week that the country may have “turned the corner,” while Chancellor Olaf Scholz has also expressed optimism, citing record employment and retreating inflation.

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There’s been a particular shift in the data in recent weeks, with the Bundesbank now estimating that output rose in the first quarter, having only a month ago foreseen a contraction that would have ushered in a first recession since the pandemic.

Even so, the start of the year “didn’t go great,” according to Fuest.

“What we’re seeing at the moment confirms the forecasts, which are saying that growth will be weak in Germany, but at least it won’t be negative,” he told Bloomberg Television. “So this is the stabilization we expected. It’s not a complete recovery. But at least it’s a start.”

Monthly purchasing managers’ surveys for April brought more cheer this week as Germany returned to expansion for the first time since June 2023. Weak spots remain, however — notably in industry, which is still mired in a slump that’s being offset by a surge in services activity.

“We see an improving worldwide economy,” Fuest said. “But this doesn’t seem to reach German manufacturing, which is puzzling in a way.”

Germany, which was the only Group of Seven economy to shrink last year and has been weighing on the wider region, helped private-sector output in the 20-nation euro area strengthen this month, S&P Global said.

–With assistance from Joel Rinneby, Kristian Siedenburg and Francine Lacqua.

(Updates with more comments from Fuest starting in sixth paragraph.)

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Parallel economy: How Russia is defying the West’s boycott

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When Moscow resident Zoya, 62, was planning a trip to Italy to visit her daughter last August, she saw the perfect opportunity to buy the Apple Watch she had long dreamed of owning.

Officially, Apple does not sell its products in Russia.

The California-based tech giant was one of the first companies to announce it would exit the country in response to Russian President Vladimir Putin’s full-scale invasion of Ukraine on February 24, 2022.

But the week before her trip, Zoya made a surprise discovery while browsing Yandex.Market, one of several Russian answers to Amazon, where she regularly shops.

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Not only was the Apple Watch available for sale on the website, it was cheaper than in Italy.

Zoya bought the watch without a moment’s delay.

The serial code on the watch that was delivered to her home confirmed that it was manufactured by Apple in 2022 and intended for sale in the United States.

“In the store, they explained to me that these are genuine Apple products entering Russia through parallel imports,” Zoya, who asked to be only referred to by her first name, told Al Jazeera.

“I thought it was much easier to buy online than searching for a store in an unfamiliar country.”

Nearly 1,400 companies, including many of the most internationally recognisable brands, have since February 2022 announced that they would cease or dial back their operations in Russia in protest of Moscow’s military aggression against Ukraine.

But two years after the invasion, many of these companies’ products are still widely sold in Russia, in many cases in violation of Western-led sanctions, a months-long investigation by Al Jazeera has found.

Aided by the Russian government’s legalisation of parallel imports, Russian businesses have established a network of alternative supply chains to import restricted goods through third countries.

The companies that make the products have been either unwilling or unable to clamp down on these unofficial distribution networks.

 

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