The dollar fell on Friday ahead of the US non-farm payrolls report later in the day, which may test the strength of the US economic recovery, but with the Federal Reserve committed to fighting inflation, strategists believe that any decline in the value of Currency will not continue.
The euro and the pound sterling compensated for losses last night and rose for the first time in three sessions, while the Japanese yen returned to rise following another breach of the key 145 level once morest the dollar.
A number of Federal Reserve officials supported the view that the central bank has not finished raising interest rates as it seeks to rein in inflation, and rates are expected to rise further.
And the euro rose in the latest trading today, 0.1 percent to 0.9801 percent once morest the dollar.
The British pound rose 0.3 percent to $1.1192, following falling 1.4 percent overnight. It had risen to as much as 1.1493 once morest the dollar earlier in the week following the British government backed down on a scheduled cut for the highest income tax bracket.
The US dollar index fell 0.1 percent to 112.11 points, following rising by regarding one percent last night, and is heading towards a decline of 0.16 percent this week.
Attention now turns to the US Non-Farm Payrolls report, which is expected to be released on Friday at 1230 GMT.
Economists expect 250,000 jobs added last month, compared to 315,000 in August.
The yen rose in the latest trading today, 0.2 percent to 144.91 once morest the dollar, to approach its lowest level in 24 years at 145.90, which was recorded last month, prompting the Japanese authorities to intervene to support the fragile currency.
(Archyde.com)
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The sterling is making sharp gains, and the dollar is falling in volatile trading
written by Alexandra Hartman Editor-in-Chief
The British pound rose in volatile trading on Thursday, with the dollar falling once morest most currencies as investors took comfort from the Bank of England’s purchase of long-term bonds to restore stability to the market.
The pound rose 1.4 percent to $1.1034. After hitting a 37-year low of $1.0327 three days ago, the pound rose 6.4 percent once morest the dollar.
The British currency’s recovery is partly due to the Bank of England’s move to buy bonds. On Thursday, the central bank bought 1.415 billion pounds ($1.55 billion) of British government bonds with maturities of more than 20 years, the second day of a multi-billion pound program aimed at stabilizing the market.
The pound fell in early trading, Thursday, in conjunction with Prime Minister Liz Terrace’s defense of the government’s tax cut budget.
On the other hand, the dollar fell once morest a basket of major currencies, as it was last down 0.1 percent at 112.454.
The euro rose 0.4 percent once morest the dollar to $0.9767.
The data showed economic sentiment in the euro zone fell more than expected in September, with confidence waning among businesses and consumers, who are also pessimistic regarding price trends in the coming months.
The focus of the markets was on inflation in Germany, which jumped to 10.9 percent this month, exceeding expectations that it would reach 10 percent.
On the other hand, the dollar rose 0.3 percent to 144.525 Japanese yen.
The Chinese yuan outside the mainland also rose by regarding 0.5 percent to 7.1280 per dollar following Archyde.com reported that the authorities had told state banks to prepare to intervene in the yuan’s favor.
The risk-sensitive Australian dollar fell 0.6 percent to $0.6483. (Archyde.com)
OECD stresses alert to the old continent: if gas fails, many European countries will experience recession | Economy
written by Alexandra Hartman Editor-in-Chief
The OECD report also notes that Argentina, Brazil, Mexico and South Africa, being quite exposed to the cycles of the world economy and the demand directed at them from rich countries, will suffer a severe slowdown next year. next.
Many European countries will fall into recession in 2023 if there are gas supply problems in the coming months, a scenario that might materialize if the 10% reduction in consumption set by the EU is not achieved, and especially if the winter is cold, warns the OECD.
In its interim Outlook report published this Monday, the Organization for Economic Cooperation and Development (OECD) explains that if supplies fail to cover needs, economic disturbances will last until 2024 and They will have an impact all over the world.
Even if that black scenario does not occur, the organization has had to revise downwards the projections it made three months ago due to the impact of the war in Ukraine and the restrictions due to covid in China, so that the slowdown in the global economy will mean that growth will be limited to 3% in 2022 and 2.2% in 2023.
If it is compared with the forecasts that the OECD itself had made in December 2021, before the war in Ukraine broke out, that means that next year 2.8 trillion dollars will evaporate, a drop of 2% in economic terms. of purchasing power.
The most affected region is Europe, where before reaching a possible supply problem, the price of gas has already tripled in one year and is practically ten times higher than it had on average in the 2010-2019 period.
Europe on the verge of recession
Taking this into account, and other consequences of the Russian invasion of Ukraine, the OECD has sharply corrected its estimates of the growth in gross domestic product (GDP) in the euro zone for next year to leave it at 0.3% (1 .3 points less than in June).
In particular for Germany, where a recession of 0.7% is expected (2.7 points less) even if the black scenario is not fulfilled. In the other heavyweights of the eurozone, growth expectations have also been reduced: 0.6% in France, 0.4% in Italy and 1.5% in Spain.
The United Kingdom it will border on recession with the central hypothesis of the OECD (0% growth). Without falling so low, the United States will suffer from this year, with an increase in activity of 1.5% (following 5.7% in 2021), and 0.5% in 2023.
The authors of the report note that Argentina, Brazil, Mexico and South Africabeing quite exposed to the cycles of the world economy and to the demand directed at them from rich countries, they are going to suffer a severe slowdown next year, greater than what had been anticipated three months ago.
Growth rates will thus remain at 0.4% in Argentina (1.5 points less than estimated in June), 0.8% in Brazil (-0.4 points), 1.5% in Mexico ( -0.6) and 1.1% in South Africa (-0.2).
China once morest the tide
In Chinathe evolution expected is the opposite of that of practically all the other members of the G20, with a severe slowdown this year due to the restrictions imposed by the covid outbreaks and the weakness of the real estate market, which will leave the progression of the GDP by 3.2% (1.2 points less than anticipated in June) following 8.1% in 2021.
Nevertheless, in 2023 there should be a recovery as those restrictions are lifted and thanks to policies in favor of activity, so that growth will rise to 4.7%.
With respect to Russia, the OECD has substantially corrected its projections. He acknowledges that the economic collapse of more than 10% that he had predicted in June will not occur due to the effect of the sanctions, which have not prevented his income from hydrocarbon sales from increasing thanks to the escalation in prices.
However, those sanctions and the war effort will reduce its production by 5.5% in 2022 and 4.5% in 2023, according to the current scenario.
Saudi Arabia, big winner
At the other end, Saudi Arabia appears as the big winner in economic terms of this situation among the members of the G20, since with its sales of oil and gas at sky-high prices, its GDP will increase by 9.9% this year and by 6% in 2023.
A slowing economy in the eurozone increases the possibility of a recession
written by Alexandra Hartman Editor-in-Chief
A closely-watched survey by economists showed on Friday that European economic activity fell once more in September, raising expectations of a recession.
“The economic slowdown deepened in the eurozone in September, with business activity contracting for the third consecutive month, albeit modest, but the rate of decline accelerated to the most severe pace,” Standard & Poor’s Global Flash said. Since 2013, excluding pandemic lockdowns.
The Purchasing Managers’ Index fell from 48.9 in August to 48.2 in September – noting that it represents below the 50 economic contraction threshold.
“The stagnation in the eurozone is there,” said Chris Williamson, chief business economist at Standard & Poor’s Global Market Intelligence. Firms report deteriorating business conditions and increased price pressures linked to higher energy costs.
He added, “Germany is facing the most difficult conditions, with the economy deteriorating at a rate that we have not seen, except for the pandemic period, since the global financial crisis.”
The skyrocketing energy prices and the sharp rises in the cost of living have dampened demand and reduced manufacturing output. Eurozone inflation rose to 9.1% in August, its highest level ever, while analysts expect the rate to reach double digits by the end of the year.
The European Central Bank raised interest rates by a record 75 basis points this month and pledged to do everything in its power to limit the rise in consumer prices.
Williamson said that indicators point to a contraction of the euro area by 0.1% in the third quarter of 2022 and a sharp decline in the fourth quarter, noting that the challenge faced by policy makers in curbing inflation while avoiding a sharp decline in the economy is therefore becoming increasingly difficult.
(AFP)