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U.S. dollar sinking The U.S. dollar continues to sink as markets bet that the Federal Reserve will move to bolster the country's sputtering recovery with a new round of easing.
"Despite a number of news items that six months ago would have sent the single currency through the floor, the euro continues to push higher, shrugging off a Fitch downgrade of Ireland that followed in the footsteps of Moody's earlier this week, as investors put European concerns to one side to fixate on the only game in town," said CMC Markets analyst Michael Hewson. "Sell the dollar against everything on the basis of continued deteriorating economic data which will in all likelihood lead to further Fed easing at next month's [Federal Open Market Committee]meeting."
Gold also hit a fresh record today.
"The combination of a weaker-than-expected U.S. growth trajectory, anticipation of the Federal Reserve entering a second round of unconventional stimulus measures, the lack of a credible fiscal plan and the upcoming midterm elections have all helped to weaken the [U.S. dollar]" Scotia Capital currency analyst Camilla Sutton said in a research note. "... Renewed monetary easing from the major central banks equates to a new flood of liquidity into the system. Fears over currency debasement, sparked by both direct currency intervention in Japan and the potential for ongoing intervention in both the U.S. and Japan, has helped to push gold prices to new highs and the [U.S. dollar]to year-to-date lows."
Trichet wades into currency debate European Central Bank chief Jean-Claude Trichet is weighing into the controversy over exchange rates, warning that a currency should reflect its country's economy and that "excess volatility and disorderly moves" hurt economies and financial stability.
Mr. Trichet's comments came as the euro climbed against its U.S. counterpart, hitting $1.40 for the first time since early in the year.
Fears over a currency war have been mounting, largely because China is keeping a lid on its yuan and Japan has intervened in markets in an attempt to hold down the yen.
Mr. Trichet spoke after both his ECB and the Bank of England held interest rates steady today.
- ECB holds rates at record low
- Bank of England holds rates steady
- Economy Lab: Does Britain face a double-dip?
Building permits slip Building permits in Canada fell 9.2 per cent in August from a month earlier, pulled down by a hefty drop of almost 23 per cent in the non-residential sector. Permits issued for residential construction rose, however, Statistics Canada said today.
The drop in the non-residential sector was primarily due to declines in Ontario, British Columbia and Quebec. The reverse was seen in residential permits, which rose 2 per cent on multi-family homes in the same three provinces.
While overall permits were down, they still stood 11.4 per cent above the level a year earlier, the federal statistics gathering agency said.
Regulators meet on bank pay Bankers in Europe could face even stricter restrictions on their pay, The Financial Times reports today. The Committee of European Banking Supervisors, meeting in London yesterday and today, are drafting regulations that would bring into force regulations proposed in the summer.
But, the news organization said, the regulators are now looking at forcing banks to meet a ratio that would hold bonuses at a multiple of salary. This would come despite fears raised by officials in Britain, France and Spain, The Financial Times said.
Retailers post solid gains U.S. retailers appear to have had a successful back-to-school season, which is lifting hopes heading into the crucial holiday sales period.
Several chains today reported September sales that were better than expected, including Macy's Inc. and Abercrombie & Fitch AFN-N, though Gap Inc. and Target Corp. lagged.
Life imitates art Resorts Atlantic City aims to take advantage of the popularity of a new TV series and adopt a 1920s theme that will include its cocktail servers, bellhops and others, The Associated Press said.
Resorts Atlantic City, the first casino in the U.S. to open outside of Nevada is taking a cue from Boardwalk Empire, the HBO series starring Steve Buscemi about Atlantic City in the Roaring 20s.
"A lot of people here are learning 1920s songs now," Dennis Gomes, who's buying the property, told the news agency.
From today's Report on Business
- Bell executive to take reins at CTV
- Defiant Maple Leaf charts own path
- Fourth-generation wireless: A tale of two providers
- Eric Reguly: Fading prospect of Chinese play for Potash
And, read our Streetwise blog and Your Business section.