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Bearish bets soften on Asian FX as US dollars eases

Investors trimmed bearish bets on most Asian currencies. This is because the dollar weakened on hopes of a temporary pushback in the Federal Reserve’s tapering timeline, while sentiment on the Indian rupee turned marginally bullish. Investors unwound their bearish bets on the Indian rupee to be slightly bullish. 0.2% in August were appreciated by the currency after vaccination programs were ramped up and the central bank continued its monetary policy support.

Economic growth in India is expected to touch a record high. Despite the drawback from the deadly second virus wave, there is a rebound expected in the consumer spending. Short bets were largely trimmed on the Malaysian ringgit, the Philippine peso, and the Thai baht. The U.S. dollar has eased 0.4%. It also slipped from a 9-month high. Bearish bets on the Malaysian ringgit were at their lowest since mid-July. 1% has been appreciated by the currency in the past two weeks after the arrival of a new Prime Minister. Short bets on the baht were at their lowest since July. The worst-performing unit in the region so far, can be claimed by this.

On the other hand, the rising infections in the region, and the increased pressure of vaccinations around South Korea, India, and Thailand, while China is keeping on witnessing new outbreaks too. In the meantime, short bets on the Chinese yuan in the last two weeks has been increased. This is because of the latest virus outbreak’s pressure on the economic activity. South Korean won’s bearish bets ticked higher as the currency hit its lowest since September 2020. On the Taiwanese dollar, investors turned bearish once again. The current market positions in nine Asian emerging market currencies such as are the Chinese yuan, South Korean won, Singapore dollar, Indonesian rupiah, Taiwan dollar, Indian rupee, Philippine peso, Malaysian ringgit and the Thai baht is being considered on a poll.

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Euro zone ministers expect inflation to slow in 2022

The acceleration of euro zone inflation, driven energy prices, is mostly temporary. Then the price growth will slow down again. The euro zone finance ministers agreed that, that too the next year as forecasted by the European Central Bank and the European Commission.

Paschal Donohoe, chaired the talks of the ministers in Luxembourg. In a news conference he said that there was also agreement that the inflation spike was not an argument against the transition to renewable sources of energy. This is under the EU’s ambitious plan of reducing CO2 emissions to zero by the year 2050.

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Under new rules, borrowing for investment sensible

British finance minister Rishi Sunak said that the government borrowing to fund investment was a sensible thing. This is to allow under new fiscal rules that he is likely to announce, unlike borrowing for day-to-day spending. He said that borrowing for capital investment that is going to drive up their growth is probably a sensible thing for them. And that too particularly in an environment of slightly lower interest rate. Sunak stated this in an event on the sidelines of the annual conference of Britain’s ruling Conservative Party. This event was organized by the Taxpayers’ Alliance advocacy group. Sunak stated in that event, that borrowing for more day-to-day spending is probably less something that you would want to have as part of your framework.

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IMF board to interview Georgieva-sources

The International Monetary Fund’s executive board is going to interview Managing Director Kristalina Georgieva. This is regarding that; its reviews claims that she pressured World Bank staff to alter data to favor China in her previous role. Board members were initially expected to meet with Georgieva. But spent their time working on other regular business matters.

The board members spent hours for questioning lawyers from the WilmerHale firm. This is about their World Bank investigation report which alleged that Georgieva, as the bank‘s CEO applied undue pressure on staff, to alter data in the flagship “Doing Business” report to benefit China. Then, an IMF spokesperson said that the IMF board remains committed to a thorough, objective, and timely review of the matter. Georgieva has strongly denied the accusations.

The upcoming interviews could prove pivotal in either increasing support for Georgieva. This is with many IMF shareholders are keen to wrap up the board’s deliberations on the matter. The fund’s most influential member governments, including the top shareholder the United States, have withheld public judgment. The World Bank tasked WilmerHale with investigating the “Doing Business” data irregularities identified in 2020. The law firm’s report contends Georgieva. The former World Bank President Jim Yong Kim’s office pressured staff to manipulate data so that the China’s global ranking in the “Doing Business 2018” study of investment climates rose to 78th from 85th.

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