Overseas Headlines – December 22, 2020

United States:      

U.S. Economic Rebound Is Patchwork of Virus Risk and Rules

“The U.S. economy has splintered along state and city lines, with the speed of the rebound largely dependent on the magnitude of local business restrictions to combat an unending surge in Covid-19 cases. California and Illinois, where some of the strictest measures have been imposed, saw jumps in state unemployment filings this month that helped push the weekly U.S. total to a three-month high. Both states also had November unemployment rates above the national level of 6.7%.”



U.K. Deficit Hits $323 Billion With Economy Facing Recession

“U.K. government borrowing climbed to a record 240.9 billion pounds ($323 billion) in the first eight months of the fiscal year, reflecting the damage inflicted on an economy now at risk of falling back into recession. In November alone, spending exceeded tax revenue by 31.6 billion pounds amid the escalating cost of supporting firms and households through the pandemic, Office for National Statistics figures published Tuesday showed. It leaves Britain facing its largest ever peacetime budget deficit.”



China Is Set to Reduce Dollar’s Influence on Yuan Trading Basket

“A branch of China’s central bank factors in the moves of a basket of trading partners’ currencies when setting the yuan’s daily reference rate. The weighting of each of the 24 components in the CFETS RMB Index is adjusted based on the proportion each nation took in total trade with China the previous year. The greenback’s share is currently the highest in the basket, at slightly more than a fifth. But it has been declining since 2015. Last year, the U.S. accounted for 17.8% of China’s two-way shipments with the 24 peers last year, down from 20.5% in 2018, according to data compiled by Bloomberg. China is expected to adjust the basket by the end of the year.”




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