U.S. Dollar stays firm as traders look to U.S. data for policy cues | Canada News Media
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U.S. Dollar stays firm as traders look to U.S. data for policy cues

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By Tom Westbrook

SINGAPORE (Reuters) – The dollar clung to a recent bounce on Monday as investors made a cautious start to a week crammed with central bank meetings and big-ticket U.S. economic data, waiting for clues on the outlook for global inflation and for policymakers’ responses.

Trade was thinned by holidays in Japan and China, which kept a lid on volatility, leaving the greenback to trade where it settled after a Friday leap. It held at $1.2020 per euro and crept to a three-week high of 109.58 yen.

The dollar index, measured against six major currencies, held at 91.322.

The index dropped 2% through April as a positive view of global recovery prospects lifted trade-exposed currencies at the dollar’s expense, but bounced with upbeat U.S. consumption data on Friday.

“We expect the dollar to trend lower because of the improving global economic outlook,” said Commonwealth Bank of Australia analyst Kim Mundy in an emailed note.

“Nevertheless,” she said “the risk of short bouts of dollar strength remain if solid data push U.S. Treasury yields materially higher.”

The Australian and New Zealand dollars were marginally firmer on Monday, though not enough to recoup a dip suffered on Friday. [AUD/]

The Aussie rose 0.1% $0.7718 to trade around its 20-day moving average, while the kiwi edged 0.2% higher to $0.7171, also just above its 20-day moving average. Sterling steadied at $1.3825. [GBP/]

Elsewhere in Asia China’s yuan drifted lower to 6.4781 per dollar in offshore trade following hawkish remarks from U.S. Secretary of State Antony Blinken.

The South Korean won hit a one-week low after North Korea vowed it would respond to what it regards as hostile U.S. policy, while pressure for a national lockdown in India pushed the rupee a little lower.

In crypto markets, ethereum broke past $3,000 to post a fresh record peak of $3,061.17.

DATA DELUGE

Purchasing Managers Index figures for manufacturers were positive in Asia on Monday and those due later on Monday are expected to show growth picking up speed in Europe and the United States. However the week’s major focus will be on U.S. manufacturing surveys due Wednesday and April labour market numbers on Friday.

Forecasts are that 978,000 jobs were created in the month. However analysts say the market response to a surprise either way may be hard to guess, as investors have begun to fret that strong data may prompt central bankers to taper their support.

“The risk is for a hotter number,” said Chris Weston, head of research at broker Pepperstone in Melbourne.

“But will good numbers lead to a broad risk-off vibe, as traders’ price in higher rate expectations, and the dollar rallies,” he added. “I suspect we’re getting to a point where really good data could start to become bad for markets.”

Dallas Fed President Robert Kaplan caused a stir on Friday by calling for beginning the conversation about tapering, although Federal Reserve Chair Jerome Powell has been clear that he is likely to be patient.

Powell is due to speak later on Monday and will be followed by a raft of Fed officials this week. Central bank policy meetings are also scheduled this week in Australia, Britain and Norway.

In Australia, no policy changes are expected on Tuesday although traders will look to a speech by deputy Reserve Bank of Australia governor Guy Debelle on Thursday for insight into the bank’s thinking around its bond purchases outlook.

Asset purchases are likewise the focus when the Bank of England meets on Thursday, as well as perhaps an upgrade of its economic outlook, while Norges Bank – which projects hiking rates this year – is expected to stick with its hawkish tone.

 

(Reporting by Tom Westbrook; Editing by Shri Navaratnam)

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Minimum wage to hire higher-paid temporary foreign workers set to increase

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OTTAWA – The federal government is expected to boost the minimum hourly wage that must be paid to temporary foreign workers in the high-wage stream as a way to encourage employers to hire more Canadian staff.

Under the current program’s high-wage labour market impact assessment (LMIA) stream, an employer must pay at least the median income in their province to qualify for a permit. A government official, who The Canadian Press is not naming because they are not authorized to speak publicly about the change, said Employment Minister Randy Boissonnault will announce Tuesday that the threshold will increase to 20 per cent above the provincial median hourly wage.

The change is scheduled to come into force on Nov. 8.

As with previous changes to the Temporary Foreign Worker program, the government’s goal is to encourage employers to hire more Canadian workers. The Liberal government has faced criticism for increasing the number of temporary residents allowed into Canada, which many have linked to housing shortages and a higher cost of living.

The program has also come under fire for allegations of mistreatment of workers.

A LMIA is required for an employer to hire a temporary foreign worker, and is used to demonstrate there aren’t enough Canadian workers to fill the positions they are filling.

In Ontario, the median hourly wage is $28.39 for the high-wage bracket, so once the change takes effect an employer will need to pay at least $34.07 per hour.

The government official estimates this change will affect up to 34,000 workers under the LMIA high-wage stream. Existing work permits will not be affected, but the official said the planned change will affect their renewals.

According to public data from Immigration, Refugees and Citizenship Canada, 183,820 temporary foreign worker permits became effective in 2023. That was up from 98,025 in 2019 — an 88 per cent increase.

The upcoming change is the latest in a series of moves to tighten eligibility rules in order to limit temporary residents, including international students and foreign workers. Those changes include imposing caps on the percentage of low-wage foreign workers in some sectors and ending permits in metropolitan areas with high unemployment rates.

Temporary foreign workers in the agriculture sector are not affected by past rule changes.

This report by The Canadian Press was first published Oct. 21, 2024.

— With files from Nojoud Al Mallees

The Canadian Press. All rights reserved.

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PBO projects deficit exceeded Liberals’ $40B pledge, economy to rebound in 2025

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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.

The Canadian Press. All rights reserved.

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Statistics Canada says levels of food insecurity rose in 2022

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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.

The Canadian Press. All rights reserved.

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