China: May widen yuan’s trading band in coming weeks
China may widen the yuan’s trading band in the “next few weeks” as policymakers favour a more flexible exchange rate to combat inflation. The range may be widened to allow the currency to trade as much as 1% on either side of daily fixing set by the People’s Bank of China, currency strategists Callum Henderson and Robert William wrote in a research note yesterday. It was last widened to 0.5% from 0.3% in May 2007. (MalaysianReserve)
Indonesia: May delay rate rise as inflation slows, rupiah climbs
Indonesia’s central bank will probably keep interest rates unchanged for a fourth month as slowing inflation and a strengthening currency allows it to delay an increase and support economic expansion. Bank Indonesia will hold its benchmark reference rate at 6.75%, according to all 14 economists surveyed by Bloomberg News ahead of a decision due in Jakarta tomorrow. Governor Darmin Nasution has refrained from adding to the central bank’s first rate increase in more than two years in February even as neighbors from Thailand to the Philippines tightened monetary policy further. Inflation eased for a fourth month in May as a 5.4% gain in the rupiah this year capped import costs. (Bloomberg)
Australia: RBA’s Stevens hold key rate with little urgency to increase
The Reserve Bank of Australia (RBA) left its benchmark interest rate unchanged for a sixth straight meeting and signaled little urgency to increase borrowing costs as a stronger currency helps contain inflation. Central bank Glenn Stevens yesterday held the overnight cash rate target at 4.75% in Sydney, as forecast by 23 of 28 economists surveyed by Bloomberg news. (MalaysianReserve)
UK: Retail sales down 2.1% y-o-y in May
British retail sales fell unexpectedly in May as low wage growth and high inflation forced consumers to rein in spending after a strong Easter, a survey showed yesterday. The British Retail Consortium (BRC) said the value of annual like-for-like retail sales fell by 2.1% in May after a 5.2% jump in April which had been driven by the timing of Easter and an extra public holiday for the royal wedding. Total sales in May, including sales in new floor space, were down 0.3% after a 6.9% rise in April. (FInancialDaily)
US: Job openings drop for first time in three months
Job openings in the US decreased in April for the first time in three months, showing companies started to lose confidence in the expansion’s durability even before hiring slumped in May. The number of positions waiting to be filled fell by 151,000 to 2.97m, the fewest since January, the Labor Department said today in a statement posted on its website. The number of people hired and the number of workers fired also decreased. The unemployment rate rose to 9.1% in May while employers added the fewest workers in eight months, Labor Department data showed last week. More job gains are needed to drive consumer spending after economic growth slowed in the beginning of the year. (Bloomberg)
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