The dollar weakened against the euro, trimming a yearly gain, as speculation global growth will pick up next year spurred sales of the U.S. currency.
The dollar fell against 13 of its 16 most traded peers after South Korea’s consumer prices rose more than forecast and following reports yesterday showing U.S. claims for jobless benefits dropped last week, businesses expanded and pending home sales climbed. The euro reached a two-week high after Chancellor Angela Merkel vowed to defend the common currency as “the foundation” of Germany’s economy.
“Maybe the U.S. data prompted pressure on outflows,” said Geoffrey Yu, a London-based currency strategist at UBS AG. “There’s a slight heading into risk again. We’ve seen a good deal of buying of Asian currencies against the dollar.”
The U.S. currency weakened 0.3 percent to $1.3345 against the euro as of 8:38 a.m. in London paydayloans. Since Dec. 31 last year the dollar has appreciated 6.9 percent against the European currency.
The dollar depreciated 0.8 percent against the Korean won to 1,126. The yen declined 0.3 percent to 108.50 per euro. The Japanese currency strengthened against the U.S. dollar for the 10th day to 81.36.
South Korea’s consumer prices rose 3.5 percent in December from a year ago, Statistics Korea said in Gwacheon today. The median estimate was for a 3.2 percent gain in a Bloomberg News survey of nine economists. The Institute for Supply Management’s factory index in the U.S. rose to 57.0 in December, the most since May, from 56.6 in November, economists said before the Jan. 3 report. A reading higher than 50 signals growth.
Brazil raised its tariffs on toy imports from China in a bid to help the South American country’s manufacturers hurt by a 37 percent gain in the real against the yuan over the past two years.
Duties on 14 types of toys ranging from dolls and puzzles to tricycles and electric train sets will be increased to 35 percent from 20 percent until the end of 2011, the Foreign Trade Chamber said in an e-mailed statement yesterday.
The chamber said it was acting on a request from Brazilian toymakers to help them “fight” an increase in imports, 90 percent of which come from China. The higher tariffs will affect goods whose imports totaled $290 million between January and November of this year, according to trade ministry data.
China’s Ministry of Commerce didn’t respond to a faxed request for comment and telephone calls to a spokesman weren’t answered.
Brazilian imports of Chinese goods in the 12 months through August increased 37 percent to $21.4 billion, from $15 billion in all of 2009, according to a study published this month by Brazil’s state-development bank. The surge in Chinese imports, boosted by the yuan’s competitive exchange rate, threaten to displace domestic sales by Brazilian manufacturers and has “important implications” for the country’s industrial development, said the bank, known as BNDES.
The real’s 37 percent gain against the yuan over the past two years is the third-best performance among major currencies tracked by Bloomberg after the Australian dollar and South African rand. The 12-month non-deliverable forwards suggest traders are betting that the yuan will strengthen 2.2 percent in one year from its current spot value of 6.625 per U.S. dollar.
Toy sales in Brazil will reach 3 billion reais ($1.8 billion) this year, 49 percent of which will come from products made abroad, according to estimates by Brazil’s toymakers association. In 2009, imported toys accounted for 46.8 percent of 2.7 billion reais in sales, the group said.
Allies of the man who the international community says won Ivory Coast’s disputed presidential election called Sunday for a general strike that would last until the incumbent hanging on to power concedes defeat and leaves office.
It was the latest form of pressure to force Laurent Gbagbo from the presidency nearly a month after the United Nations said his political rival, Alassane Ouattara, won the runoff vote. Gbagbo has refused to leave despite international calls for his ouster, and West African leaders say they now will remove him by force if he fails to go.
Djedje Mady, the head of Ouattara’s electoral coalition, said it called on “all Ivorians and those who live in Ivory Coast and believe in peace and justice to cease all their activities on Monday, December 27, 2010, until Laurent Gbagbo leaves power.”
The U.N. has said at least 173 people have been killed in violence over the vote, heightening fears that the country once divided in two could return to civil war. The toll is believed to be much higher, though, as the U.N. mission has been blocked from investigating other reports including an allegation of a mass grave.
On Sunday, the interior minister appointed by Gbagbo accused the U.N. of only telling half the story.
“The government of Ivory Coast denounces the lack of objectivity and balance in the procedures carried out by the U.N. Human Rights Council,” said Emile Guirieoulou, the interior minister. He said that at least 36 of the victims were police or other security forces who “were targeted by gunfire coming from the protesters.”
Guirieoulou also alleged that the thousands of refugees arriving in Liberia had fled violence perpetrated by rebels who support Ouattara. The U.N. refugee agency says at least 14,000 people have fled the violence and political chaos in Ivory Coast, some walking for up to four days with little food to reach neighboring Liberia. At least one child drowned while trying to cross a river.
Gbagbo has been in power since 2000 and had already overstayed his mandate by five years when the long-delayed presidential election was finally held in October. The vote was intended to help reunify the country, which was divided by the 2002-2003 civil war into a rebel-controlled north and a loyalist south.
Instead, the election has renewed divisions that threaten to plunge the country back into civil war. While Ivory Coast was officially reunited in a 2007 peace deal, Ouattara still draws his support from the northern half of the country, where residents feel they are often treated as foreigners within their own country by southerners.
The U.N. certified Ouattara as the winner of the Nov. 28 runoff vote, but a Gbagbo ally overturned those results by throwing out half a million ballots from Ouattara strongholds in the north. The move angered people who had waited for years as officials settled who would be allowed to vote in the long-delayed election, differentiating between Ivorians with roots in neighboring countries and foreigners.
For nearly a month, Gbagbo has now defied calls from the U.N., United States, former colonizer France, African Union and European Union to step aside and hand over power to Ouattara.
West African leaders from the regional bloc ECOWAS late Friday threatened a military intervention if Gbagbo does not step down. On Sunday, Sierra Leone’s information ministry said that three leaders from the region would pay him a visit.
“In the spirit of brotherliness in Africa, three presidents have been nominated by their colleagues to confront Mr. Gbagbo in Abidjan to encourage him to leave office without delay,” the ministry said. “The three presidents can fly back with Mr. Gbagbo, as all ECOWAS countries are prepared to grant him asylum.”
Gbagbo has shown few signs that he plans to go, though, and his security forces have been accused of being behind hundreds of arrests, and dozens of cases of disappearance and torture in recent weeks.
In recent days, the United Nations has expressed alarm about the actions of men who are believed to be Gbagbo loyalists. The world body reported Thursday that heavily armed forces allied with Gbagbo, who were joined by masked men with rocket launchers, were preventing people from getting to the village of N’Dotre, where the global body said “allegations point to the existence of a mass grave.”
While the threat of a military intervention creates pressure on Gbagbo, Africa security analyst Peter Pham said there are “serious doubts that ECOWAS has the wherewithal to carry it out.”
“None of the ECOWAS countries has the type of special operations forces capable of a ‘decapitation strike’ to remove the regime leadership,” said Pham, who is the senior vice president of the National Committee on American Foreign Policy in New York. “That leaves the rather unpalatable option of mounting a full-scale invasion of the sort that would inevitably involve urban fighting and civilian casualties.”
Pham also said there is “little chance” that the U.N. would allow its peacekeepers to get involved in such an effort. “The precedent would make it very difficult to get future agreement for deployment of such missions by host countries,” he said.
Diplomatic pressure and sanctions have left Gbagbo increasingly isolated, though he has been able to maintain his rule for nearly a month since the disputed vote because he still has the loyalty of security forces and the country’s military.
Even that, though, may disappear if he runs out of money to pay them. Gbagbo’s access to the state funds used to pay soldiers and civil servants has been cut off and only Ouattara’s representatives now have access to the state coffers.
Senior diplomatic sources, speaking on condition of anonymity because of the sensitivity of the issue, say that Gbagbo only has enough reserves to run the country for three months.
China’s central bank will enhance regulations to prevent hot money from entering the country as a result of increases in interest rates, Ba Shusong, a researcher at the State Council’s Development Research Center, told state television today cash advance today.
Canada
Orders for long-lasting manufactured goods outside of the volatile transportation category rose by the largest amount in eight months in November. Factories saw demand increase for computers, appliances and heavy machinery.
The Commerce Department says total orders for durable goods dropped 1.3 percent, a decline that reflected sagging demand for aircraft and autos. But excluding transportation, orders rose 2 .4 percent, the best showing since last March.
The widespread gain outside of transportation was an encouraging sign that factories will be ramping up production and hiring more workers in coming months.
Monsanto Co. said Wednesday that Pierre Courduroux will become the company’s next chief financial officer on Jan. 1.
Courduroux, 45, is currently Monsanto’s finance lead for global seeds and traits business. He replaces Carl Casale, who is leaving at the end of the year to become president and CEO of Minneapolis-based CHS Inc.
“Pierre understands our business, has proven financial expertise, and applies that to executing on our strategic vision,” chief executive Hugh Grant said in a statement savings account payday advance.
Courduroux, a native of Clermont-Ferrand, France, joined Monsanto in 1990. He also previously served as CFO for the company’s global vegetable business.
Italian economist Tommaso Padoa Schioppa, one of the intellectual architects of the euro and a member of the European Central Bank’s first executive board, has died. He was 70.
Padoa Schioppa, economy minister under Premier Romano Prodi, died Saturday night after suffering a heart attack during a dinner in Rome with friends, according to one of those present, his one-time deputy Vincenzo Visco.
The unexpected death stunned Italy’s political and business elite, who remembered him as a passionate promoter of the European project and its single currency.
“He was among those who knew how to translate the European ideal into concrete and learned analyses and projects, giving in particular a lasting contribution to the birth of the euro and the eurozone,” Italian President Giorgio Napolitano said.
During his seven year term at the ECB, Padoa Schioppa was one of the six members charged with guiding the euro through its first vital years after being introduced in 11 member nations on Jan. 1, 1999.
“He contributed decisively in the early years of the euro to the reputation of the ECB as a major actor in international and European cooperation,” ECB President Jean-Claude Trichet said in a statement. The eurozone, he said, “is losing a man of reflection, of action and of vision, fully dedicated to European unity.”
Prior his appointment to the ECB, Padoa Schioppa held many prestigious posts in the Italian business and banking world. He first gained international recognition as the director-general for economic and financial affairs at the European Commission 1979-1983.
In 1993 he became deputy director-general of Banca d’Italia faxless payday loans. He surprised many in 1997 when he moved to Consob, Italy’s stock market watchdog. As chairman he fought to introduce reforms in the Italian stock market particularly those to clamp down on insider trading.
More recently, the Greek government tapped him to help deal with the country’s debt crisis and Fiat Industrial named him to the board just last week.
But it was his role in shepherding in the euro that made his mark.
Schioppa was the executive board director with special responsibility for international relations, payment systems and banking supervision. He traveled widely lecturing in important financial centers from New York to Tokyo and Beijing advocating the importance and potential of the euro.
An ardent supporter of the European project, the trilingual Schioppa acknowledged the challenge that lack of political union presented to the euro. He repeatedly argued that “a strong currency requires a strong economy and a strong polity, not only a competent central bank.”
With the euro well on its way, Prodi named Padoa Schioppa economy minister after winning the 2006 elections and tasked him with the difficult job of trying to revive Italy’s zero-growth economy. It was a post he held until Prodi lost to Premier Silvio Berlusconi in 2008.
Padoa Schioppa, educated in Milan and Massachusetts, was married with three children.
Funeral arrangements weren’t immediately announced. Rome’s mayor offered city hall for the wake, noting that Padoa Schioppa’s death was a loss for the entire nation.
A massive bipartisan tax package preventing a big New Year’s Day tax hike for millions of Americans is on its way to President Barack Obama for his signature Friday.
The measure would extend tax cuts for families at every income level, renew jobless benefits for the long-term unemployed and enact a new one-year cut in Social Security taxes that would benefit nearly every worker who earns a wage.
The president is expected to sign the bill Friday afternoon.
In a remarkable show of bipartisanship, the House gave final approval to the measure just before midnight Thursday, overcoming an attempt by rebellious Democrats who wanted to impose a higher estate tax than the one Obama agreed to. The vote was 277-148, with each party contributing an almost identical number of votes in favor (the Democrats, 139 and the Republicans, 138).
In a rare reach across party lines, Obama negotiated the $858 billion package with Senate Republicans. The White House then spent the past 10 days persuading congressional Democrats to go along, providing a possible blueprint for the next two years, when Republicans will control the House and hold more seats in the Senate.
“There probably is nobody on this floor who likes this bill,” said House Majority Leader Steny Hoyer, D-Md. “The judgment is, is it better than doing nothing? Some of the business groups believe it will help. I hope they’re right.”
Rep. Dave Camp, R-Mich., said that with unemployment hovering just under 10 percent and the deadline for avoiding a big tax hike fast approaching, lawmakers had little choice but to support the bill.
“This is just no time to be playing games with our economy,” said Camp, who will become chairman of the tax-writing House Ways and Means Committee in January. “The failure to block these tax increases would be a direct hit to families and small businesses.”
Sweeping tax cuts enacted when George W. Bush was president are scheduled to expire Jan. 1 _ a little more than two weeks away. The bill extends them for two years, placing the issue squarely in the middle of the next presidential election, in 2012.
The extended tax cuts include lower rates for the rich, the middle class and the working poor, a $1,000-per-child tax credit, tax breaks for college students and lower taxes on capital gains and dividends payday loan lenders. The bill also extends through 2011, a series of business tax breaks designed to encourage investment that expired at the end of 2009.
Workers’ Social Security taxes would be cut by nearly a third, going from 6.2 percent to 4.2 percent, for 2011. A worker making $50,000 in wages would save $1,000; one making $100,000 would save $2,000.
“This legislation is good for growth, good for jobs, good for working and middle class families, and good for businesses looking to invest and expand their work force,” said Treasury Secretary Timothy Geithner.
Some Democrats complained that the package is too generous to the wealthy; Republicans complained that it doesn’t make all the tax cuts permanent.
Rep. Ginny Brown-Waite, R-Fla., called it “a bipartisan moment of clarity.”
The bill’s cost, $858 billion, would be added to the deficit, a sore spot among budget hawks in both parties.
“I know that we are going to borrow every nickel in this bill,” Hoyer lamented.
An opponent of the legislation, Rep. Anthony Weiner, D-N.Y., said Obama and lawmakers will face enormous election-year pressure in 2012 to extend the cuts again or make them permanent. Weiner said the Republicans turned out to be “better poker players” than Obama.
At the insistence of Republicans, the plan includes an estate tax that would allow the first $10 million of a couple’s estate to pass to heirs without taxation. The balance would be subject to a 35 percent tax rate.
Many House Democrats wanted a higher estate tax, one that would allow couples to pass only $7 million tax-free, taxing anything above that amount at a 45 percent rate. They argued that the higher estate tax would affect only 6,600 of the wealthiest estates in 2011 and would save $23 billion over two years.
House Speaker Nancy Pelosi, D-Calif., called the estate tax the “most egregious provision” in the bill and held a vote that would have imposed the higher estate tax. It failed, 194-233.
Rep. Elijah Cummings, D-Md., said he thought the White House could have gotten a better deal.
“When I talk to the Republicans they are giddy about this bill,” he said.
Bank of England policy maker Adam Posen said policy makers shouldn’t “overreact” to inflation, which may slow below 1 percent in two years.
The bank’s Monetary Policy Committee “would only make things worse by making policy looking in the rear-view mirror, trying to make up for past mistakes,” Posen said in a speech today in Billericay, England. “If we allow for even just some exchange-rate pressure upwards on prices over this period as well, underlying U.K. inflation has stayed well below target.”
U.K. inflation has exceeded the government’s 3 percent limit for nine months, and an increase in value-added tax on sales in January may add to prices in 2011. Posen said Britain’s economy still has a “large” amount of slack in the aftermath of the recession and the largest government budget squeeze since World War II will slow inflation.
“Neither our forecast nor our policy going forward should overreact reflexively to that above-target inflation, even though it will persist for the next few months after the coming VAT rise,” Posen said.
Posen’s analysis leads him “to a forecast for U.K. inflation well below that of the November Inflation Report, and more importantly a forecast that at the target horizon of two- plus years, annual CPI inflation will be significantly below target (perhaps by 1 percent or more),” he said.
Price Expectations
Consumer prices rose 3.3 percent from a year earlier in November, the highest since May. Consumers’ inflation expectations reached a two-year high in November in a GfK NOP Ltd. survey for the Bank of England released today.
The large amount of slack in the economy will still curb consumer-price gains, Posen said.
“Financial crises in advanced economies do not destroy enough productive capacity to offset the disinflationary fall in demand,” he said. “For the U.K. today, this would suggest that a sizable output gap still exists, exerting downward pressure on inflation, all else equal.”
The bank’s nine-member committee kept its bond-purchase plan unchanged at 200 billion pounds ($312 billion) this month and held its benchmark interest rate at a record low of 0.5 percent. Minutes of the central bank’s Nov. 4 decision showed policy makers split three ways, with Andrew Sentance calling for higher rates to combat inflation and Posen pushing for more stimulus to sustain the recovery. The rest voted for no change.
Minutes of this month’s decision are due Dec. 22.
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