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The U.S. dollar will depreciate next year, and it’s not just because the Federal Reserve will potentially stop raising interest rates, according to Morgan Stanley.

With U.S. economic growth forecast to slow next year, the Fed is widely expected to take a break from hiking rates in the middle of 2019 which will weaken the U.S. dollar. But more importantly, large economies such as Europe, Japan and China are now investing less in global financial markets, so demand for the U.S. dollar will likely reduce, said Hans Redeker, Morgan Stanley’s global head of FX strategy.

That’s significant because the U.S. is running both fiscal and current account deficits, so the country needs buyers for the bonds that it sells. A fiscal deficit happens when a government’s total spending exceeds the revenue that it earns, while current account deficit occurs when a country imports more than it exports.

“When you create debt, you need to find somebody to buy it. And that means you need to look into the global availability of capital and … global availability of capital is in sharp decline,” Redeker told CNBC’s Sri Jegarajah on Thursday.

As a result, there will be less capital available to fund U.S. deficits, he said at the Morgan Stanley 17th Annual Asia Pacific Summit in Singapore.

Higher bond yields — partly a result of the Fed’s rate hikes — and improved economic growth in the U.S. this year spurred investors to shift funds into the world’s largest economy. That in turn led to an increased demand for the U.S. dollar, which has strengthened the currency for most of 2018.

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EU may investigate Apple Pay if there are formal complaints 



EU regulators looked into Apple’s mobile payment service and found it was not market dominant but they could review it again if they receive formal complaints, Europe’s antitrust chief said on Monday.

In an interview with Reuters, European Competition Commissioner Margrethe Vestager also signalled that Google and Amazon would remain very much on her radar until the end of her mandate late next year.

Google has been fined a total of 6.8 billion euros ($7.7 billion) in the last 18 months for breaching EU rules.

Apple’s mobile payment service Apple Pay, launched in October 2014, is available in 10 EU countries including France, Italy, Spain, Sweden and Denmark.

Critics say that an NFC chip embedded in the Apple iPhone means that Apple Pay is automatically selected when an iPhone user pays for goods and services, barring rival payment methods. The Danish Competition Authority is investigating the issue, which was brought to its attention by the Danish Consumer Council.

Vestager, who has earned a reputation for taking a tough line against companies that breach EU rules and can impose fines of up to 10 percent of a company’s global turnover, said she did a preliminary review some time back.

“When we were looking at it … (at) first glance, we couldn’t see Apple being dominant. That doesn’t exclude in the future that we will have a second look. But when we looked some time ago, we didn’t find … the necessary (evidence) to start a case,” she said.

“Obviously if we had official complaints, we would take that seriously because the entire payment market is a very important payment market.”

A spokeswoman for Apple declined to comment.

Separately Vestager is reviewing whether Amazon is using merchants’ data illegally to make its own brand products similar to retailers’. She said she has been inundated with data, key to building a case against the U.S. online retailer.

“Now we have received not piles, but mountains of data and for us it is a priority to go through that, both from Amazon themselves but also coming in from some of the businesses that they actually host,” she said.

“For us, of course it is important to get the starting point right because, if we open a case, in order to be able to proceed with some speed, well then of course we need to get some of the basics right and we are in the process of doing that.”

Vestager recently asked Google’s rivals if the internet search engine unfairly demotes local search competitors, raising the possibility of a fourth antitrust case against the company.

“Now we ask questions when it comes to local search. This means a lot to many people because you use your phone or your table, you are looking for a place to eat, opening hours, where to go, museums, doctors, all kinds of stuff, and therefore of course it is a very important area, a very important service,” she said.

“It could be (a fourth case against Google) but of course we start asking questions without prejudice.”

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Construction underway on West Africa’s ‘first utility scale wind farm’



Ground has been broken on the development of West Africa’s “first utility-scale wind power project”, located in Senegal.

The 158.7 megawatt (MW) Parc Eolien Taiba N’Diaye, or PETN, is set to be completed in 2020, according to renewable energy firm Lekela.

The 46-turbine facility will use turbines from Danish company Vestas and will generate more than 450,000 megawatt hours of energy annually, boosting Senegal’s generation capacity by approximately 15 percent, Lakela said. The project will be built near the community of Taiba N’Diaye.

“Senegal has been quick to embrace the idea and the advantages of renewable energy,” Chris Antonopoulos, Lekela’s CEO, said in a statement towards the end of last week.

The International Renewable Energy Agency has described Africa as being rich in renewable sources of energy such as the wind and sun.

Kenya, for example, is home to the Lake Turkana Wind Power project, which is made up of 365 wind turbines. The project has a total installed capacity of 310 MW and has been producing and sending electricity to Kenya’s national grid since September.

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As France’s protest crisis grows Italy is no longer Europe’s problem child



Relations between Italy and France are strained with migration a key point of tension between Salvini and Macron.

Both politicians stand for opposite ends of the European political spectrum; as leader of the anti-immigration Lega party, Salvini is firmly on the right and he advocates a smaller, less powerful European Union, while Macron is seen as a figurehead for the European project and has called for more integration and centralization.

Salvini’s fellow Deputy Prime Minister Luigi Di Maio, who leads the anti-establishment Five Star Movement (M5S), has said in the past that he had “no doubt” that the leaders of France and Germany wanted Italy’s euroskeptic government to fall.

Lega and M5S have produced controversial 2019 spending plans which have seen Italy clash with the European Commission. The spending plans envisage the introduction of a basic income for the poor, a lower retirement age and a proposed flat tax rate.

Brussels has rejected the budget, however, saying that it goes against EU rules that states should work towards lowering their budget deficits and debt piles (Italy’s has the second highest debt pile in the U.K. of 133 percent of GDP). The commission has said Italy needs to amend its spending plans if it wants to avoid sanctions, including a possible fine. We have yet to see what amendments Italy will announce.

Markets have been remarkably sanguine regarding Italy’s clash with Brussels, however, and expect a solution to be found. Goldman’s Mueller-Glissmann told CNBC that the effect of Italy’s collision with the commission had so far been contained.

“Italy is in a deep bear market, we’ve seen a lot of widening of credit and yet nevertheless we’ve not seen a lot of spill-over, I’ve think it would need to get to the next level with more downgrades and more significant market stress from Italy spilling over to banks and other parts of Europe,” he said. “My sense is that Italy will potentially dominate headlines into the new year, but won’t be such of a big problem in 2019.”

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