Shutterstock
The pound hits a record low against the dollar as Asia-Pacific currencies also weaken. Top economists see an increased recession chance for North America. Global grain stocks move toward a decade low, and more financial news.
The pound sterling fell to a record low against the dollar at $1.035 on Monday before regaining to stand at $1.08, BBC reported. The Sterling also fell to its lowest level against the euro since January 2021, which brings its total decline this year to 8%. The pound plunged over fears that impending tax cuts will worsen inflation and prompt the Bank of England to enact further interest rate hikes. Britain’s economy is already suffering a cost-of-living crisis and slow growth, Business Insider reported. UK inflation hit a 40-year peak of 10.1% in July
Asia-Pacific currencies also weakened against the dollar on Monday. The Japanese yen traded at 144 levels against the dollar, while South Korea’s won was at 1,428.52 per dollar, both of which were near 2009 levels, CNBC reported. China’s currency also weakened to its lowest mark against the dollar since May 28, 2020, at 7.1464 yuan per dollar, Reuters reported.
Doug Porter, Chief Economist at BMO Economics, estimates that the risk of a North American recession over the next year is now above 50 percent. BMO has adjusted its forecast to reflect a moderate downturn in the first half of 2023 in both the U.S. and Canada, Trading View reported.
Steve Hanke, a professor of applied economics at Johns Hopkins University, foresees an 80% chance of a US recession, CNBC reports.
“The probability of recession, I think it’s much higher than 50%,” Hanke said. “I think it’s about 80%. Maybe even higher than 80%.”
“If they continue the quantitative tightening and move that growth rate and M2 (money supply) into negative territory, it’ll be severe,” Hanke added.
World grain inventories are heading towards their lowest levels in over a decade, worsened by poor weather, drought, and the Ukraine war, US News reports. Although the resumption of exports from Ukraine has continued, they are too few. Other key agricultural regions have had shrinking grain harvest due to poor weather. The situation is heightening the risk of famine in some of the world’s poorest nations.
At the end of the 2022/23 crop year, the world’s buffer stocks of corn will be enough for just 80 days’ worth of consumption, which is the lowest level since 2010/11, according to an analysis of figures compiled for Reuters by the International Grains Council, an intergovernmental organization
