Thailand Looks to Rein in Baht as It Hits 6-Year High

(Bloomberg) — The Bank of Thailand is considering imposing additional measures to rein in the currency amid further gains in the baht to a six-year high and worries about economic growth.

The economy could be more sensitive to greater currency appreciation, the Bank of Thailand said in minutes of the Sept. 25 monetary policy committee meeting published on Wednesday. This would be an “additional pressure” on softening domestic demand, particularly exported-related manufacturing and services, it said.

The committee “saw the need to closely monitor developments of exchange rates, capital flows, and impacts on the economy through various channels, as well as consider implementing additional measures at an appropriate timing if necessary,” the central bank said.

The monetary authority took steps in July to curb short-term inflows, worried that a strengthening baht will add further pain to an export-reliant economy already being hit by the U.S.-China trade war. The currency has gained more than 7% against the dollar this year, making it the best performer in Asia.

More Steps

Additional currency measures could include continued relaxation of capital outflow regulations to encourage Thai residents to increase their portfolio investment abroad, the central bank said. It could also consider measures in collaboration with other organizations, “including efforts to stimulate investment to reduce the elevated current-account surplus.”

The comments came on the same day the baht rose to as high as 30.334 per dollar, the strongest level since June 2013. It was up 0.3% at 30.345 as of 10:33 a.m. in Bangkok.

The central bank left its benchmark interest rate unchanged in September after reducing it to 1.5% in August.

The MPC “saw the need to preserve policy space in order to cushion against possible risks in the future and deemed it necessary to monitor the impacts of the policy rate cut and fiscal stimulus measures on the economy,” according to the minutes. The panel will be “data-dependent” going forward, and will monitor growth, inflation and financial stability risks, it said.

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Brexit – Looks like the Financial Times has written the obituary for Boris Johnson’s prime ministership

The FT with a summary of the UK PM’s achievements in office:

In three months as prime minister Mr Johnson

  • has suffered an unprecedented defeat in the Supreme Court, 
  • lost his parliamentary majority, 
  • expelled 21 Tory MPs, 
  • seen the resignation of his brother from the government, 
  • and had his Brexit strategy torn to shreds.
The FT with a summary of the UK PM's achievements in office:I’ll bet if I caption this “The new Dumb and Dumber movie looks like a hoot!” I’ll just upset some sad politics folks. Best I don’t. 

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Eyeing post-Brexit trade deals, Britain looks to train school-leavers as future negotiators

By Kylie MacLellan

LONDON (Reuters) – As Britain prepares to carry out its own trade negotiations for the first time in decades, the government has launched a scheme to recruit and train school-leavers as future commerce experts.

The Department of International Trade, which was created after the 2016 vote to leave the European Union, said its two-year scheme would include placements with teams working on future trade deals and supporting British companies exporting.

“As we leave the European Union and take up trade in our own right as a policy, we have had to develop all the skills to be able to do that,” trade minister Liam Fox said at the launch of the scheme, as school children taking part in a mock trade negotiation noisily bartered over products in the background.

“I wanted young people in particular to look at the world of trade and say ‘that is a profession I would like to go into, that is something I would like to do as a career.'”

Britain cannot formally sign trade deals with other countries until it has left the European Union but has been working to amass expertise, replicate agreements it is part of as a member of the EU and lay the groundwork for new deals.

Those applying for the scheme, which will pay around 30,000 pounds ($ 37,600) a year, do not need to have any qualifications. The department expects most candidates will either be 18-year-old school-leavers or people wanting to switch careers.

It will also include a six-month posting in one of Britain’s trade offices around the world.

“If you want to sell Britain properly you have to know what Britain has to sell but you have to also understand the markets that we are selling into,” Fox told Reuters.

Britain’s Chief Trade Negotiation Adviser Crawford Falconer, who previously worked as New Zealand’s Chief Negotiator, said the scheme was not about filling a gap in trade negotiating talent in Britain.

“We have got plenty of trade negotiating talent but what we need to have is greater diversity and greater choice and for people to enter at a younger age,” he said.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

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Australia’s Central Bank Looks Likely to Cut Rates ⁠— From the Outback

© Reuters.  Australia’s Central Bank Looks Likely to Cut Rates ⁠— From the Outback © Reuters. Australia’s Central Bank Looks Likely to Cut Rates ⁠— From the Outback

(Bloomberg) — The Reserve Bank of Australia’s policy decision on Tuesday is more unusual than most.

Not only could Governor Philip Lowe and his board deliver a second consecutive interest-rate cut –- the last time the RBA did that was in 2012 — it’s also the first time they will meet in Darwin in more than 50 years.

A city closer to Jakarta than Sydney, Darwin is a symbolic trip for the policy makers. Lowe will deliver a speech on his rates policy to community leaders and then plans to travel to East Arnhem Land to meet with indigenous groups and pay respects to the RBA’s first governor, the legendary H.C. ‘Nugget’ Coombs, half of whose ashes lie in the area.

The last time the RBA’s board met in Darwin it adjusted policy to encourage saving. Fifty-one years later, Lowe and his colleagues return with the aim of spurring Australians to spend.

The central bank is striving to revive an economy that’s just clocked 28 years without recession, yet is on track for its weakest fiscal year since 1991. Markets are pricing in a 70% chance that the RBA will take rates to a record 1% on Tuesday, while 21 of 32 economists in a Bloomberg survey expect them to move.

Lowe and his board have a number of risks to balance: domestically there’s a sagging property market making consumers hesitant, and a government infrastructure boost coming; globally, a U.S.-China trade truce for now won’t do much to halt a slowdown in China and the world economy.

The RBA chief must sometimes wish he had the levers available to Coombs. At the June 1968 board meeting a shortage of liquidity led the RBA to lift the bank deposit rate in order to spur saving. Lowe, in contrast, is regularly inundated with letters from savers — often older Australians — complaining his rate cuts are eroding their income.

The RBA’s 1968 Darwin meeting was actually the mid-point in an Outback odyssey that saw the board fly through Queensland, the Northern Territory and Western Australia to look at new mines that were springing up. It was a different era: these days Lowe and his deputy, Guy Debelle, aren’t supposed to be in a plane together, let alone the whole board.

Community Engagement

The RBA’s return to Darwin five decades on is more coincidence than design. Officials say board members find the community engagement aspect of trips outside Sydney useful to help understand sentiment. Having recently journeyed to Hobart, Darwin was the obvious next choice. Once that visit was decided, it was suggested the RBA try to rekindle the relationship with the people of East Arnhem Land.

Coombs’s ties with the region dated back to a dispute over copyright on the artwork on the A$ 1 bill by artist David Malangi. In 1967, Coombs met Malangi and resolved the issue, and also began an association that would stretch through until Coombs’s death in 1997 at age 91. (Half of his ashes were scattered at the Australian National University and the other half in East Arnhem Land).

In his final nine months as governor through 1968, Coombs was also chairman of the Council of Aboriginal Affairs and an early proponent of reconciliation. He would take up the cause of Arnhem Land’s people in their fight against a bauxite mine constructed in the area; this involved the famous bark petition protest that is now on display in parliament house.

Despite his extensive contacts in government, Coombs was unable to halt the mine. But he would make contact with a young Galarrwuy Yunupingu, who would go on to be a leader of the Australian indigenous community and older brother to Mandawuy, late front man of rock group Yothu Yindi.

It is this history Lowe is seeking to reconnect the RBA with. Together with Catherine Tanna, a board member and managing director of EnergyAustralia; Susan Moylan-Coombs, a broadcaster and granddaughter to Nugget who was also a member of the Stolen Generation; Philip Gaetjens, Secretary to the Treasury who sits on the central bank board; and Anthony Dickman, secretary at the RBA.

If rates are cut and all goes well, it will at the very least give the governor a day free of letters from angry pensioners.

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The Pound Looks Even Worse Than the Euro 

© Bloomberg. British one pound coins sit in this arranged photograph in London, U.K., on Monday, May 20, 2019. The pound headed for the longest losing streak against the euro since the turn of the century as rising U.K. political risks fanned concern about the nation’s ability to achieve an orderly Brexit. Photographer: Jason Alden/Bloomberg © Bloomberg. British one pound coins sit in this arranged photograph in London, U.K., on Monday, May 20, 2019. The pound headed for the longest losing streak against the euro since the turn of the century as rising U.K. political risks fanned concern about the nation’s ability to achieve an orderly Brexit. Photographer: Jason Alden/Bloomberg

(Bloomberg) — The pound will tumble to levels not seen since 2017 against the euro as Brexit turmoil outweighs a dovish European Central Bank, according to analysts.

Sterling is likely to slide toward 92 pence per euro by year-end, about 3% below current levels and a rate not seen in 21 months, according to JPMorgan Chase & Co (NYSE:). That pessimism toward the currency is starting to be priced in the options market, where the cost of puts relative to calls is approaching the highest since April.

The pound has slumped against the this quarter as the risks to Britain’s currency from the contest to replace U.K. Prime Minister Theresa May and October’s Brexit deadline mount. The slide reflects investors’ skepticism about the Bank of England’s stance that rates may have to rise if the economy develops in line with its forecasts. With momentum slowing around the world, markets are, in fact, pricing in the chance of a BOE rate cut next year.

“The pound still has more downside to it,” said Timothy Graf, head of EMEA macro strategy for Europe at State Street (NYSE:) Bank & Trust. “The BOE has been talking way too upbeat a game given every other central bank in the world except Norway is talking about easier policy.”

Sterling has weakened about 4% since the start of April and traded around 89.50 pence per euro Monday. Six-month euro-sterling risk reversals, a measure of market sentiment and positioning, have moved increasingly in favor of the common currency since early May, suggesting investors are betting on further gains.

This environment means sterling shorts versus the euro will likely continue to build, according to Jeremy Stretch, head of Group-of-10 currency strategy at Canadian Imperial Bank of Commerce. He sees the pound weakening to 91.50 pence per euro by the fourth quarter.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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BoE looks to throw open doors to tech companies ahead of Brexit

© Reuters. FILE PHOTO: A man walks past the Bank of England in the City of London © Reuters. FILE PHOTO: A man walks past the Bank of England in the City of London

By Huw Jones

LONDON (Reuters) – The Bank of England opening up its balance sheet to payment companies and tech firms such as Facebook (NASDAQ:) would bolster Britain’s 7 billion pound ($ 9 billion) fintech sector just as it faces tougher competition from Europe after Brexit.

BoE Governor Mark Carney has said the Bank will consult next year on providing an “appropriate” level of access to its 500 billion pound balance sheet to new payment providers, putting them more on a par with the big banks that dominate payments.

If the BoE approves the move, it would be the first major central bank anywhere in the world to let non-banks have direct access to its coffers, making it potentially attractive to large technology companies expanding into payments such as Amazon (NASDAQ:) and Apple (NASDAQ:).

“The Governor’s promise to go further by opening (the BoE)balance sheet and access to the payments system could further cement London’s role as a key international fintech hub,” said Margaret Doyle, partner and head of financial services insights at Deloitte.

Banking analyst John Cronin said the Bank could also be taking out insurance if the rapid advances of technology at payment companies dent the ability of commercial banks to make enough money as payment companies.

“Arguably over the much longer term it could be seen as a defensive move if banks’ business models were to come under threat from Facebook’s Libra and others,” Goodbody analyst Cronin said.

“You can see how winners and losers emerge.”

Earlier this week Facebook announced plans to introduce a cryptocurrency called Libra, part of an effort to expand into digital payments.

RAPID CHANGE

Payments make up a significant element of fintech activity but collectively they have yet to match the central role of banks in operating the financial system’s plumbing.

Carney’s comments coincided with British finance minister Philip Hammond announcing a review of the payments landscape to make sure that regulation and infrastructure keep pace with the “dizzying array of new payments models”.

Currently only systemically important firms that are regulated to the same level as UK banks and are exposed to overnight liquidity risk – typically banks, broker-dealers and clearing houses – can access the central bank’s balance sheet.

Facebook’s cryptocurrency plans would turn it into a systemically important financial firm, Carney said.

If a payments company were granted access, it could park cash at the BoE overnight, meaning it would be less risky and rely less on commercial banks.

“Users should benefit from the reduced costs and increased certainty that come with banking at the central bank,” Carney said.

Britain’s government and financial regulators have been encouraging the fintech sector for several years, seeing it as a growth sector that already employs around 60,000 people.

The authorities are anxious to keep Britain at the cutting edge in an increasingly digitalized economy where electronic payments have already overtaken cash.

But Britain is due to leave the European Union on Oct. 31 and fintech firms in London have already expressed concerns they could be locked out of the EU market in future and unable to keep recruiting from the bloc.

UK regulators have been lauded by fintech firms for their flexibility in allowing new business models to be tested on real customers early on, but Berlin, Luxembourg and Paris are vying to attract firms from London by offering them access to the EU’s vast single market.

Charlotte Crosswell, chief executive of Innovate Finance, a fintech industry body, said opening access to new types of payment providers at the BoE shows a real coming of age moment for fintech.

“We are delighted that regulators are keeping in step with the times, as this approach has propelled the UK to the forefront of financial services innovation, and allowed us to consistently maintain that position,” Crosswell said.

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Canadian Dollar Looks ‘Egregiously’ Undervalued, Scotiabank Says

© Bloomberg. Canadian one dollar coins, also known as Loonies, sit in a pile at the Royal Canadian Mint Ltd. manufacturing facility in Winnipeg, Manitoba, Canada, on Monday, March 11, 2019. The Canadian dollar was steady against the greenback amid rising oil prices and mixed versus G-10 currencies as traders awaited domestic home price data Wednesday and a speech by the Bank of Canada's Carolyn Wilkins on Thursday. Photographer: Shannon VanRaes/Bloomberg © Bloomberg. Canadian one dollar coins, also known as Loonies, sit in a pile at the Royal Canadian Mint Ltd. manufacturing facility in Winnipeg, Manitoba, Canada, on Monday, March 11, 2019. The Canadian dollar was steady against the greenback amid rising oil prices and mixed versus G-10 currencies as traders awaited domestic home price data Wednesday and a speech by the Bank of Canada’s Carolyn Wilkins on Thursday. Photographer: Shannon VanRaes/Bloomberg

(Bloomberg) — Canada’s dollar is “egregiously” undervalued, Scotiabank said following a report Friday that showed record job gains for the country.

While the has had a bad reputation of late, the strength of the nation’s economic fundamentals reinforces the view that the currency should be stronger, foreign-exchange strategists Shaun Osborne and Eric Theoret wrote in a note.

The Canadian currency climbed as much as 0.7% to C$ 1.3381 per dollar on Friday, its strongest level in a week, after data showed the country added an above-forecast 106,500 jobs in April. The yield premium of two-year U.S. notes over equivalent Canadian securities continued to shrink on Friday, dropping to around 62 basis points from more than 70 earlier in the week.

Shifts in interest-rate differentials between the two countries “should drive additional gains for the currency moving forward, all else remaining equal,” the Scotiabank strategists wrote.

The increase in jobs was the biggest one-month increase for payrolls in data going back to 1976, and far exceeded the 12,000 anticipated by economists. The moves in markets were also helped by weaker-than-expected U.S. inflation data, which weighed on the greenback and U.S. Treasury yields, and concern about the Chinese-American trade relationship.

Meanwhile, the price of West Texas — the global benchmark for one of Canada’s key products — continued to hover around $ 62 a barrel, having climbed more than 36% this year.

“Crude oil prices remain relatively well-supported, with supply disruption worries offsetting the unhelpful trade backdrop for the global economy,” Osborne and Theoret wrote.

On the domestic front, the strategists say that the economy appears “in way better shape” than the Bank of Canada had expected in its recent monetary policy report.

“If this year’s CAD ‘flight path’ is really mimicking 2017, the USD peaked over the past week and is poised to fall sharply,” the Scotiabank strategists wrote.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Olympics: Tongan Taufatofua looks to be dual threat in Tokyo

Olympics: Tongan Taufatofua looks to be dual threat in Tokyo Olympics: Tongan Taufatofua looks to be dual threat in Tokyo

By Rory Carroll

(Reuters) – Tongan Pita Taufatofua, who set social media ablaze when he went shirtless during the opening and closing ceremonies in the past two Olympics, on Wednesday said he is aiming to qualify for the 2020 Summer Games in Tokyo in two sports.

The Australia-born 35-year-old hopes to make a second appearance in taekwondo while also hunting for gold in sprint kayak, which he said he only took up recently.

“Taekwondo is my first love. You never forget your first love,” he told Reuters at a training session in New York. “We’re trying to do two sports in one Olympics.”

If successful he will be the first person in the modern era to compete in three completely different Olympic sports following his unlikely foray into cross-country skiing in Pyeongchang last year.

Taufatofua says his interest in kayaking comes from the canoeing and paddling traditions of his Tongan ancestors.

“Kayaking is a sport that is part of being a Polynesian. They traveled all throughout Polynesia hundreds of years ago and that’s more of a natural sport to me than, say, the skiing, and I just love being out on the ocean.”

The image of Taufatofua — oiled up, shirtless and wearing a traditional Tongan ta’ovala (mat) at the head of the country’s tiny delegation at Rio’s Maracana stadium in 2016 — went viral online.

Taufatofua became the first UNICEF Pacific ambassador and made an appearance at UNICEF headquarters in New York in that capacity.

In addition to his passion for the Olympics he wants to promote greater awareness of the oceans and the planet.

He said he is brimming with confidence despite his taekwondo tournament in Rio in 2016 ending quickly with a 16-1 thrashing in his first match.

He also finished 114th out of 119 in his cross-country race in Pyeongchang.

Asked to rate his confidence level, he set it at “12 out of 10.”

“One of my biggest things is self-belief,” he said.

“I have extreme self belief in myself but it’s not something that’s unique to me,” he said.

“It’s something I want to put across to people.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Sports and General News

White House Hassett on CNBC: 3.1% in 2018 looks spot on

Looking for another 3% year in 2019

The White House Hassett is on CNBC saying that:

  • Our 3.1% growth forecast for 2018 looking spot on
  • US to have another 3% year in 2019
  • Had hard time seeing a recession in 2019
  • Mnuchin deserves a gold sart for revising withholdings.

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It Looks Like Deja Vu for South Africa's Fast-Starting Rand

© Reuters.  It Looks Like Deja Vu for South Africa's Fast-Starting Rand © Reuters. It Looks Like Deja Vu for South Africa’s Fast-Starting Rand

(Bloomberg) — As if January’s potential record gain isn’t enough, the may be in for a positive February as well if history is any guide.

Seasonal data show that South Africa’s currency has strengthened against the dollar in February in seven of the past 10 years. Optimism about local political developments and a global risk-on mood spurred the rand to back-to-back monthly gains in January and February last year, and the same factors have already pushed it to its best start since at least 1999 this time round.

Finance Minister Tito Mboweni is scheduled to present the budget on Feb. 20, but few are expecting major changes from the numbers signaled in his mid-term fiscal statement in October. Should the budget outcome meet expectations, that may reduce the chance of Moody’s Investors Service lowering the nation’s credit rating when it reviews its assessment in March.

Still, investors should be mindful of the rand’s volatile nature, said Elna Moolman, a Johannesburg-based economist at Standard Bank Group Ltd.

“A pragmatic budget that doesn’t trigger negative sovereign credit rating action might be an initial catalyst for some appreciation,” she wrote in a client note. “There is a risk that, like early last year, rand strength will overshoot once optimism about policy and political reform is revived.”

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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