Connect with us


Euro awaits ECB, Canadian, Aussie dollars languish near two-month lows



The yen and the Swiss franc edged up as investors sought shelter in the safe-haven assets amid signs of tension between the United States and North Korea and renewed fears of a slowdown in global growth.

The ECB is expected to cut growth forecasts and is likely to provide its strongest signal yet that stimulus is coming in the form of more cheap long-term bank loans to fight an economic slowdown.

The euro trod water on Thursday at 1.1307 dollar, about 1.0 per cent below a one-month high hit on Thursday last week.

“The market has already been pricing in that the economic growth in the euro zone isn’t good,” said Yukio Ishizuki, senior currency strategist at Daiwa Securities in Tokyo.

“Though I think there is a likelihood there may be a chance to their (ECB’s) forward guidance, that also has been already priced to some extent,” he said.

The OECD on Wednesday cut forecasts again for the global economy in 2019 and 2020, following on from previous downgrades in November, as it warned that trade disputes and uncertainty over Britain’s exit from the European Union would hit world commerce and businesses.

The Australian and Canadian dollar hit their two-month lows as investors cut back holdings on expectations policymakers would leave interest rates alone for the time being or even lower them to counter weakness in those economies.

The Aussie hit a fresh two-month low of 0.70205 dollar after data showed retail sales rose 0.1 per cent in January, missing expectations for a 0.3 per cent increase.

The currency was already nursing losses from the previous day when below-par fourth-quarter economic growth figures reinforced evidence of slowing domestic momentum and backing expectations for a rate cut this year.

The Australian dollar was last at 0.7044 dollar.

The Bank of Canada (BoC) on Wednesday said there was “increased uncertainty” about the timing of future rate hikes as it held interest rates steady at 1.75 per cent as expected.

The loonie fell as low as 1.3457 Canadian dollar after the release of the BoC’s latest policy statement, its lowest against the greenback since Jan. 4. On Thursday, it was a tad stronger on the day, last trading at 1.3436 Canadian dollar.

The yen and the Swiss franc, both perceived as safe-haven currencies, found support amid signs of tension between the United States and North Korea.

New activities have been detected at a North Korean intercontinental ballistic missiles plant, South Korean media said on Thursday, as U.S. President Donald Trump said he would be very disappointed if Pyongyang rebuilt a rocket site.

“It’s news that leads to buying of the yen and, in that regard, also affects the Swiss franc,” said Kazushige Kaida, head of foreign exchange at State Street Bank in Tokyo.

“But there was a move of only 5 bips or 10 bips, so it’s hard to say there was a big response to this,” he said.

The yen rose one tenth of a per cent to 111.65 yen per dollar, while the Swiss franc was also up 0.1 per cent , at 1.0043 francs per dollar.

The dollar index, which measures the greenback against a basket of six key rivals, was steady at 96.852.

Traders have remained bullish on the dollar in view of the continuing uncertainties over Brexit and whether U.S.-China negotiations will produce a substantive trade deal.


Roundup: FAO, European countries mark World Environment Day by calling for protecting biodiversity




United Nations Food and Agriculture Organization (FAO) and a string of European countries Friday marked World Environment Day, calling for steps to make the world more resilient as it emerges from the coronavirus pandemic.


Qu Dongyu, director-general of the Rome-based United Nations Food and Agriculture Organization (FAO), speaking at a virtual World Environment Day event, said protecting the environment leads to better health outcomes.

“Biodiversity provides the necessary infrastructure that supports life on earth,” Qu said. “We have to build up biodiversity. We now have an excellent opportunity to rethink the relationship between humans, animals, and the environment.”

“Better nature means better human health,” Qu concluded.

At FAO, the day was marked with a focus on biodiversity and a special “virtual” event.

“We are focused on the big global problem of the day, which is the coronavirus pandemic,” Berhe Tekola, the director of FAO’s Animal Health and Production Division, told Xinhua.

“But by protecting biodiversity, by advising people in poor countries on how they can eat more safely and how they can avoid environmental damage,” Tekola said, “we can have better health outcomes, and the world would be safer from some of the contagions that cause certain kinds of disease.”


Sergio Mattarella, Italy‘s president, made a similar point on the occasion of World Environment Day, themed “Time for Nature” this year.

“The dramatic events that have recently touched the whole of our planet demand that we acknowledge the essential link between the equilibrium of nature and our survival,” he said.

“To emerge from the difficulties that we are faced with today, we have an extreme need for research and for long-sighted policies that can imagine and render accessible a near future of sustainable prosperity,” the president continued.

Albanian President Ilir Meta also appealed for more efforts on environmental protection. Via a Twitter post, Meta said that no one should allow mismanagement of urban waste and air pollution to damage citizens’ lives.

“Albania lacks nothing to be the ‘diamond’ of the Mediterranean and Europe,” Meta said, calling for everyone’s contribution in protecting the country’s nature.

In neighboring North Macedonia, the government also reaffirmed commitment to preserved biodiversity.

“North Macedonia abounds with natural rarities and is fortunate to be endowed with rich biodiversity, but at the same time, it is our duty to preserve it,” the government said in a statement.


To mark World Environment Day, Greek Prime Minister Kyriakos Mitsotakis presented a plan for promoting electromobility. The target is for one in three new vehicles in the country to be electric by 2030.

Under the plan, the state would offer financial incentives for switching to electric vehicles. The incentives would cover about 25 percent of the cost for about 14,000 new electric cars, Mitsotakis said.

He said the funds allocated for this purpose would reach 100 million euros (113 million United States dollars) over 18 months.

Electric cars would also be exempt from parking fees for two years, and charging costs would be deductible from taxable income, the Greek leader said.

The government also aims to increase the number of electric buses on Greek roads. In an upcoming tender for new buses to be used in public transportation in Athens and Thessaloniki, a significant percentage would have to be electric vehicles.


Continue Reading


Airline SAS to resume more flights to Europe after COVID-19 halt




Stockholm, June 5, 2020 Scandinavian carrier SAS said on Friday it was to resume flights to 20 more destinations in Europe, amid the easing of coronavirus measures.

From its hub in the Danish capital Copenhagen the airline plans after mid-June to resume flights to 16 destinations in Belgium, Croatia, the Faroe Islands, France, Germany, Greece, Iceland,  Lithuania and Spain.

Flights would also later in June begin to operate from the Swedish capital of Stockholm to Palma de Mallorca in Spain, Nice in France, Athens and Thessaloniki in Greece, and some domestic destinations.

SAS is one of numerous airlines severely affected by the fall in demand in air travel due to the coronavirus pandemic.

Sweden’s current recommendation to avoid non-essential foreign travel is valid until July 15, while the Danish Foreign Ministry’s general advice against non-essential travel remains in place until Aug. 31.

Denmark was from June 15 to reopen its borders for tourists from neighbouring Germany, Norway and Iceland.


Edited By: Isaac Aregbesola (NAN)

Continue Reading


Albanian parliament OKs 650-mln-euro Eurobond




The parliament of Albania approved on Thursday the bill on the issuance of a 650-million-euro (735-million-United States dollar) Eurobond by the Ministry of Finance and Economy, a press release of the ministry said.

Speaking in front of the lawmakers on Thursday, Minister of Finance and Economy Anila Denaj said that the issuance of the Eurobond in 2020 is foreseen in the Medium Term Debt Management Strategy, approved by the Albanian government and presented to the Parliament during the discussions on the 2020 Budget.

The ministry plans to issue the Eurobond with a maturity of seven to 10 years.

Denaj stated that this is the most opportune time to issue the Eurobond “as the financial markets are showing stability after the high volatility encountered after the spread of COVID-19.”

The Bank of Albania has confirmed that the issuance of Eurobond does not affect the country’s monetary policy and has a positive effect on foreign exchange reserves and macroeconomic stability in the short and medium term.

This is the fourth time for Albania to issue a Eurobond in the international financial markets, after the issuance in 2010, 2015 and 2018.


Continue Reading


Ukrainian parliament appoints new deputy PM for Euro-Atlantic integration




Ukraine’s Verkhovna Rada, or parliament, has appointed Olha Stefanishyna as Deputy Prime Minister for European and Euro-Atlantic Integration on Thursday, Ukrinform reported on Thursday.

With a minimum of 226 votes, 255 members of parliament voted in favor of Olha Stefanishyna‘s appointment after the Verkhovna Rada dismissed Vadym Prystaiko from the post of Deputy Prime Minister for European and Euro-Atlantic Integration earlier on Thursday.

Prystaiko was nominated as the deputy prime minister by the newly appointed Prime Minister Denys Shmyhal in early March. He is expected to head one of Ukraine’s foreign diplomatic missions and may be appointed as Ukraine’s ambassador to Britain, according to Ukrinform’s report.

Stefanishyna is a specialist in EU law and international trade law. She has worked in executive government bodies for more than ten years.


Continue Reading


2nd LD Writethru: ECB expands pandemic purchase program by 600 bln euros




The European Central Bank (ECB) announced on Thursday that it decided to expand its pandemic emergency purchase program (PEPP) by 600 billion euros (673 billion U.S. dollars) to a total of 1,350 billion euros.

The horizon for net purchases under the PEPP will be extended to at least the end of June 2021, the ECB said in a statement after its monetary policy meeting. Previously the program was expected to last till the end of this year.

“In any case, the Governing Council will conduct net asset purchases under the PEPP until it judges that the coronavirus crisis phase is over,” the central bank noted.

The maturing principal payments from securities purchased under the program will be reinvested until at least the end of 2022, it added.

Euro area key interest rates were kept unchanged. The eurozone base interest rate will remain at 0.00 percent, with the marginal lending rate and deposit rate remaining at 0.25 percent and minus 0.50 percent, respectively, according to the statement.

The PEPP, announced on March 18, has been the centerpiece of a series of measures taken by the ECB to mitigate the economic shock caused by the coronavirus pandemic.

ECB President Christine Lagarde said in the press conference that the decision to expand and extend the program was made given the worsened inflation outlook and the significantly tighter financial conditions in the euro area as a whole.

It was a “unanimous view” in the Governing Council that action had to be taken, Lagarde said. She added that there was a broad consensus that 600 billion euros should “bring us over time significantly closer to a pre-COVID inflation path” while allowing the central bank to monitor how some key developments unfold in the coming months.


In an analysis of the macro-economy, Lagarde said the euro area economy is experiencing an “unprecedented contraction”.

Although there are some signs of bottoming out with the easing of containment measures, the improvement has so far been tepid compared with the pace at which indicators plummeted in the previous months, Lagarde said.

The latest ECB staff projections, unveiled on Thursday, showed that the euro area annual real gross domestic product (GDP), in the baseline scenario, is expected to fall by 8.7 percent in 2020 and to rebound by 5.2 percent in 2021 and by 3.3 percent in 2022. The 2020 forecast was revised substantially downward by 9.5 percentage points from the March version.

This means even by the end of the projection horizon, real GDP would stand around 4 percent lower than the March 2020 staff projections, according to the ECB calculation.

Headline inflation in the baseline scenario is expected to be 0.3 percent in 2020, 0.8 percent in 2021 and 1.3 percent in 2022, all considerably lower than previous projections.

Lagarde said recent surveys and incoming data pointed to a further significant contraction of real GDP in the second quarter, but economic activity is expected to rebound in the third quarter, although the overall speed and scale of the rebound remains highly uncertain.

Meanwhile, the Eurostat‘s flash estimate suggested that euro area annual headline inflation fell from 0.3 percent in April to 0.1 percent in May. Lagarde said inflation is likely to decline somewhat further over the coming months and to remain subdued until the end of the year.


At Thursday’s press conference, attention has also been centered around the recent German court ruling on the ECB‘s public sector purchase program. Germany’s Federal Constitutional Court ruled in early May that the massive program is partially unconstitutional.

Lagarde reiterated that the ECB is under the jurisdiction of the European Court of Justice, which already ruled in 2018 that the program is in line with the ECB mandate.

The ECB is confident that “a good solution will be found” that does not compromise the independence of the ECB or the primacy of European law, Lagarde said.

She noted that the central bank has always reviewed the effectiveness, efficiency and cost benefits of its policy decisions.

Immediately following the announcement of the new ECB stimulus, which exceeded the market expectation of 500 billion euros, the euro surged to a multi-month high of above 1.13 against the U.S. dollar.

Marcel Fratzscher, president of Berlin-based German Institute for Economic Research (DIW) said the decision to expand PEPP is a signal for the continuation of the ECB‘s monetary policy stance, despite the recent German court ruling.

Fratzscher said the the ECB assumes that the euro zone will not reach its pre-crisis level again in two to three years, and also sees a significant risk of deflation. The ECB has no choice but to continue to pursue its accommodative monetary policy, he commented.


Continue Reading


European Commissioner “optimistic” about Portugal’s economic recovery




European Commissioner for Jobs and Social Rights Nicolas Schmit said on Thursday that he is “reasonably optimistic” about Portugal‘s “rapid recovery” after the crisis generated by the COVID-19 pandemic, according to Portuguese Lusa News Agency.

“We anticipate that the economic recovery in Portugal will happen relatively quickly, which will also allow unemployment to fall faster than what happened in the previous crisis. At the moment, I am reasonably optimistic about Portugal,” he said in an interview with Lusa.

Schmit believed that the situation will now be different from the “euro crisis” 10 years ago, “which had very serious contours in the country and affected especially young people, some of whom having to leave the country.”

The European Commissioner praised Portugal for being able to “control the pandemic quite well.”

“It was not one of the countries most affected and I think this is a positive element for Portugal and for the tourism sector,” he was quoted as saying.

Schmit recalled that Portugal “is also a beneficiary” of the European Commission’s proposal for a Recovery Fund of 750 billion euros (843.36 billion U.S. dollars), of which it will receive 26.3 billion euros (29.57 billion U.S. dollars) to “shorten this severe recession.”

“We are already seeing an increase in unemployment — because people are already losing their jobs — but it is necessary to put in place the right measures to limit it and to help Portugal to recover vigorously,” said the official.


Continue Reading


ECB expands pandemic purchase program by 600 bln euros




The European Central Bank (ECB) announced on Thursday that it decided to expand its pandemic emergency purchase program by 600 billion euros (673 billion U.S. dollars) to a total of 1,350 billion euros.


Continue Reading


Germany unveils 130-billion-euro stimulus package to boost virus-hit economy




Germany has agreed on an economic stimulus package worth 130 billion euros (146 billion U.S. dollars) to mitigate the economic effects of the COVID-19 pandemic, Chancellor Angela Merkel said late Wednesday.

“The size of the package will amount to 130 billion euros for the years 2020/2021, 120 billion of which will be spent by the federal government,” Merkel said during a news conference after coalition meetings over stimulus measures to boost the severely-hit economy.

“We have an economic stimulus package, a package for the future, and in addition, we’re now dealing with our responsibility for Europe and the international dimension,” she noted.

The comprehensive economic stimulus measures include billions in aid for struggling industries, additional funding to deal with unemployment and lost tax revenue, and a one-time 300-euro per child bonus.

Merkel said the main value-added tax (VAT) rate will be temporarily reduced from 19 percent to 16 percent for six months, starting from July 1. The usual VAT rate for hospitality of 7 percent will be reduced to 5 percent over the same period.

German Finance Minister Olaf Scholz said that an additional supplementary budget will need to be passed for the stimulus, without naming any figures.

The stimulus programme follows a 750-billion-euro rescue package agreed by the German government in late March to mitigate the damage of the pandemic.


Continue Reading


Italy lifts national and European travel ban as pandemic slows down




People in Italy will be allowed to move freely within the country from Wednesday and the travel restrictions were also eased the same day with travelers from European Union (EU) and Schengen countries, as well as the United Kingdom, Andorra and Monaco being allowed to visit the country without subjecting to quarantine.

“A month from May 4, when we reopened our manufacturing and construction sectors, we can say the numbers are encouraging,” Italian Prime Minister Giuseppe Conte said in a nationally televised press conference on Wednesday evening.

“The trend of new cases is constantly decreasing in all our regions,” said the prime minister. “This shows the strategy we adopted is and has been the right one.”

As of today, European tourists can also travel to Italy,” he added. “They can visit our country without subjecting to quarantine.”

He added the government is hard at work to ensure Italy is once again “the safe and coveted destination of the tourists of Europe and the whole world.”

“The acute phase of the health emergency is behind us, but now we face the economic and social emergency,” Conte said.

“This crisis must also be an opportunity to design the country we want — to innovate from the ground up, to overcome structural problems we’ve been dragging for years,” Conte said.

He said “we have a historic opportunity” because the EU is planning a multi-billion-euro Recovery Fund and Italy will likely receive a lot of this money as one of the hardest-hit countries in Europe.

“We must know how to spend this money well,” Conte said as he outlined his “Recovery Plan” for Italy, which he said “rests on several pillars.”

He listed modernization, digitalization, innovation, tax and justice reform, cutting red tape, transitioning to sustainable energy, and building a high-speed train network linking the south of Italy to the rest of the country as key elements of the plan.

Meanwhile Health Minister Roberto Speranza sounded a note of warning to his fellow citizens.

“We must proceed with caution and continue to follow the rules we have learned … because they are the key in the battle against COVID-19,” Speranza said in reference to social distancing in a statement released on Wednesday, as the last remaining restrictions on personal freedoms were lifted.

“The virus is still very dangerous,” Speranza warned.

Italy reported 71 new COVID-19 deaths in the past 24 hours, bringing the country’s toll to 33,601, out of total infection cases of 233,836, according to fresh figures on Wednesday.

Nationwide, the number of active infections dropped by 596 to 39,297 cases, according to the Civil Protection Department.

Of those who tested positive for the new coronavirus, 353 are in intensive care, 55 fewer compared to Tuesday, and 5,742 are hospitalized with symptoms, a decrease of 174 patients compared to Tuesday.

The remaining 33,202 people, or about 84 percent of those who tested positive, are isolated at home with no symptoms or only mild symptoms.

Recoveries rose by 846 compared to Tuesday, bringing the nationwide total to 160,938.

The overall number of COVID-19 active infections, fatalities and recoveries has risen to 233,836 cases over the past 24 hours, an increase of 321 cases from 233,515 recorded on Tuesday.

The overall fatalities include 167 doctors, according to the National Federation of Orders of Surgeons and Dentists (FNOMCeO), which is keeping a running tally of MDs who died fighting the virus.

As the pandemic slowed down visibly in recent weeks, Italy further eased the 10-week lockdown on May 18. Shops, restaurants, bars, barbershops, beauty salons, museums, and beachfront operators were all allowed to reopen, provided that they respect rules for social distancing and disinfect facilities.

Also on Wednesday, the Uffizi Galleries in Florence, home to masterpieces by Botticelli, Caravaggio, Leonardo, Michelangelo, and many more exquisite Renaissance artists, reopened its doors to visitors.

The museum occupying the first and second floors of a palace built in the late 1500s and designed by Giorgio Vasari is a magnet for tourists worldwide.  


Continue Reading

Contact US: editor, nnnnews247

Read Also