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OTTAWA (Reuters) -If the buoyant Canadian dollar continues to rise it could create headwinds for exports and business investment as well as affecting monetary policy, Bank of Canada Governor Tiff Macklem said on Thursday.
FILE PHOTO: Bank of Canada Governor Tiff Macklem arrives to a news conference in Ottawa, Ontario, Canada September 10, 2020. REUTERS/Blair Gable/File Photo/File Photo
The currency has jumped about 4% since the central bank updated its projections in April, driven by surging commodity prices. Canada is a major exporter of energy, lumber, minerals and agricultural products. It hit a six-year high on Wednesday.
“We’ve highlighted that a stronger dollar does create some risk,” Macklem told reporters after a speech to university students in his most detailed comments yet about the potential drawbacks of a more muscular currency.
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MEXICO CITY, May 13 (Reuters) - Mexico’s central bank on Thursday kept its key interest rate steady, as expected, in a unanimous decision by its five-member board that reflected growing concerns about the path of inflation and expectations the next move would likely be a hike.
For the second meeting in a row, the Bank of Mexico, known locally as Banxico, kept the rate unchanged at 4.0%, after cutting it by 25 basis points in February.
Banxico said that inflation expectations for 2021 had risen since its last monetary policy meeting. It said expectations for the medium and long-term periods remained stable above the 3% target.
By Reuters Staff
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LONDON, May 13 (Reuters) - Bank of England Governor Andrew Bailey said there might well be a role for a state-backed digital currency in Britain although there would be big implications ranging from the setting of interest rates to privacy.
“It may well be that we do end up with a digital currency. It’s a few years off at the moment,” Bailey said at a public event organised by the BoE on Thursday. (Writing by William Schomberg, editing by David Milliken)
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TORONTO, May 11 (Reuters) - Canada has tapped an international bond market for the first time since before the coronavirus crisis, selling $3.5 billion of a 5-year U.S. dollar global bond in a move that could pad its foreign exchange reserves, a term sheet showed on Tuesday.
The bond, which pays a 0.750% coupon, was priced at 6 basis points over the U.S. Treasury benchmark, matching the spread achieved for Canada’s last global bond issue in January 2020.
That could signal Canada’s bonds remain attractive to international investors despite Ottawa borrowing heavily since the start of the crisis to finance historically large budget deficits.
MSCI ex-Japan down for a second straight session Index hits one-month low, after tumbling 1.6% on Tuesday Markets await U.S. inflation report
SYDNEY, May 12 (Reuters) - Asian shares fell for a second straight session on Wednesday to one-month lows as investors speculated surging commodity prices and growing inflationary pressure in the United States could lead to earlier rate hikes and higher bond yields globally.
MSCI’s broadest index of Asia-Pacific shares outside Japan faltered 0.5%, after tumbling 1.6% on Tuesday for its biggest daily percentage drop since March 24.
“There isn’t a clear catalyst behind this purge,” said Marios Hadjikyriacos, investment analyst for XM.