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Dollar at 16-month high after strong U.S. retail sales data

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November 16, 2021

By John McCrank

NEW YORK (Reuters) -The dollar rose to a 16-month high on Tuesday after data showed U.S. consumers looked past rising prices and drove retail sales higher than expected last month, while the euro slumped amid growth concerns and a surge in COVID-19 cases.

U.S. retail sales rose 1.7% in October, topping consensus expectations of a 1.4% rise, likely as Americans started their holiday shopping early to avoid empty shelves amid shortages of some goods as the ongoing pandemic squeezes supply chains.

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“The data reveals that consumers have continued spending and spending well despite rising prices and deteriorating consumer morale,” said Fiona Cincotta, senior financial markets analyst at City Index.

“This will be an encouraging sign for the Fed,” she said.

At 9:30 a.m. Eastern time, the dollar index was up 0.218% at 95.738, having earlier touched 95.824, its highest since July 2020.

The dollar has rallied since U.S. inflation data last week showed consumer prices surged to their highest rate since 1990, fueling speculation that the Federal Reserve may raise interest rates sooner than expected.

The euro extended losses versus the dollar, last down 0.22% at $1.13425. Earlier in the session, the single currency dropped to $1.1330, its weakest since July 2020.

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The euro’s decline is due in part to the disappointing performance of the euro zone economy relative to the United States, which has been surprising on the upside more than the euro zone has been, said Marshall Gittler, head of investment research at BDSwiss Holding Ltd.

COVID-19 is also surging again in Europe, which causing some countries to contemplate lockdowns again, whereas the spread of the virus seems to have stabilized for now in the United States, he said.

“As a result, the market is getting increasingly nervous about the euro,” Gittler said.

The euro dropped on Monday after European Central Bank President Christine Lagarde said that tightening monetary policy now to rein in inflation could choke off the euro zone’s recovery, comments which were viewed as pushing back on calls and market bets for tighter policy.

“Markets are still assuming that the ECB is in a very different position and latitude to the Fed, so that sort of rates-spread argument as well as concerns about the reimposition of restrictions across the euro zone … are just keeping the euro very much on the defensive,” said Jeremy Stretch, head of G10 FX strategy at CIBC.

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On Monday, Austria imposed a lockdown on unvaccinated people, while Germany’s parliament is due to vote on Thursday on stricter measures to deal with surging cases. France, the Netherlands and many countries in Eastern Europe are also experiencing a surge in infections.

“The fear that the situation could escalate and result in a more significant tightening of restrictions in the coming months is hurting sentiment towards European currencies,” MUFG currency analyst Lee Hardman said in a client note.

The British pound was up 0.13% against the dollar at $1.3420, spurred by data that showed British employers hired more people in October after the government’s job-protecting furlough scheme ended.

Elsewhere, the cryptocurrency bitcoin dipped back below $60,000, for the first time since Nov. 1. It was last down 3.82% at $61,175.

(Reporting by John McCrank in New York; additional reporting by Elizabeth Howcroft in London; Editing by Giles Elgood, Jon Boyle and Jonathan Oatis)

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Canada’s Shopify records Black Friday sales up 21%

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November 27, 2021

(Reuters) – Canadian e-commerce company Shopify Inc recorded worldwide sales of nearly $2.9 billion on Black Friday, an increase of about 21% in comparison to last year, the company said Saturday.

New York, London and Los Angeles were among the top-selling cities, the company said, while apparel and accessories was the top-selling product category.

Shopify also said it funded 23,000+ tonnes of carbon removal to counteract emissions from the delivery of every order placed on its platform on Black Friday.

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(Reporting by Aakriti Bhalla in Bengaluru; Editing by Nick Zieminski)

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Xiaomi to open car plant in Beijing with annual output of 300,000 vehicles – Beijing govt

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November 27, 2021

SHANGHAI (Reuters) – Chinese smartphone giant Xiaomi Corp will build a plant that can produce 300,000 vehicles annually in Beijing for its electric vehicle unit, authorities in the capital said on Saturday.

The plant will be constructed in two phases and Xiaomi will also built its auto unit’s headquarters, sales and research offices in the Beijing Economic and Technological Development Zone, the government-backed economic development agency Beijing E-Town said on its official WeChat account.

Beijing E-Town said it anticipated the plant reaching mass production in 2024, a goal announced by Xiaomi’s Chief Executive Lei Jun in October.

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In March, Xiaomi said it would commit to investing $10 billion in a new electric car division over 10 years. The company completed the business registration of its EV unit in late August.

The company has been opening thousands of stores to spur domestic sales growth for its smartphone business but eventually intends to use these shops as a channel for its plans to sell electric vehicles.

(Reporting by Brenda Goh; Editing by William Mallard)

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Eni sells Snam 49.9% stake in Algeria gas pipelines for 385 million euros

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November 27, 2021

MILAN (Reuters) -Italian energy group Eni has agreed to sell gas group Snam 49.9% of its stake in strategic pipelines carrying Algerian gas into Italy for 385 million euros ($436 million), the two companies said on Saturday.

The pipelines will be jointly controlled by the two companies, they said in a joint statement.

Italy imports more than 90% of its overall gas needs and Algerian gas currently accounts for around 30% of flows.

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“This transaction allows us to free up new resources to be used on our energy transition path,” Eni Chief Executive Claudio Descalzi said.

Eni is working on spinning off a series of oil and gas operations into new joint ventures to help reduce debt and fund its shift to low-carbon energy.

Snam, which owns a 20% stake in the TAP pipeline that carries Azeri gas into Italy, makes most of its money from managing Italy’s gas transport grid.

It has pledged to spend more on new green business lines such as hydrogen and, like other gas grid operators in Europe, is upgrading its gas network to be hydrogen ready.

“In the future, North Africa could also become a hub for producing solar energy and green hydrogen,” Snam CEO Marco Alvera said.

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The pipeline companies involved in the deal posted net income of around 90 million euros in 2020.

($1 = 0.8836 euros)

(Reporting by Stephen Jewkes, editing by Giselda Vagnoni)

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