Rolling coverage of the latest economic and financial news
- Latest: US PMI hits eight-month low
- UK factory stock shortage worst since at least 1977
- UK private sector growth hit six-month low in August
- UK composite PMI fell to 55.3 in August, from 59.2 in July, showing slower growth
- Firms report major problems with staff and material shortages
Earlier:
- Eurozone private sector growth near 15-year high, but supply chain problems remain
- Japan and Australia’s private sectors shrinking amid lockdowns
The International Monetary Fund’s record $650bn injection of resources came into effect today, as it tried to help countries recover from the pandemic.
The new monetary reserves, known as special drawing rights, are being distributed to member states — with managing director Kristalina Georgieva calling the move a “significant shot in the arm” for global efforts to combat Covid-19.
“The allocation is a significant shot in the arm for the world and, if used wisely, a unique opportunity to combat this unprecedented crisis.”
Some 70% will go to the Group of 20 largest economies, against just 3% for low-income nations
As a result, of the $650bn, about $21bn will go to low-income countries and $212 billion to other emerging market and developing countries, without counting China, according to U.S. Treasury Department calculations.
The IMF’s record $650 billion resource injection came into effect Monday, with Managing Director Kristalina Georgieva urging wealthy states to direct some of their portion to countries lacking the means to cope with the Covid crisis https://t.co/haxOBzh1AE
The pound is also gathering ground against the dollar.
Sterling has picked up a cent to $1.3720, as worries about an early stimulus tapering by the US Federal Reserve ease .
In typical fashion, the US dollar fell back on Monday as some of the risk aversion faded. The Japanese yen and Swiss franc were broadly weaker too. The dollar index is down almost 0.3% today, stepping back from Friday’s 9½-month peak.
With the week only just starting, it’s too early to draw any conclusions about the latest dollar rally being over. But if the improvement in sentiment holds up, the only thing that will be able to put the dollar back on the front foot is if the Fed sends clear tapering signals at the Jackson Hole event.
