By Rae Wee

SINGAPORE (Reuters) - The dollar was headed for its longest weekly winning streak in nine years on Friday, bolstered by a resilient run of U.S. economic data that has also put the end of the Federal Reserve's rate-hike cycle into question.

In Asia, traders were keenly watching moves in the Chinese currency, after the onshore yuan tumbled to a 16-year low in the previous session.

The U.S. dollar index, which measures the greenback against its major peers, steadied at 105.02 in early trade, not far from the previous session's six-month high of 105.15.

The index was on track to extend its gains into an eighth straight week, and is up 0.7% so far.

The euro, the largest component in the dollar index, was staring at eight straight weeks of losses, with the single currency last marginally higher at $1.0701, after having fallen to a three-month low of $1.0686 on Thursday.

"This week's story was very much about the resilience we've seen in the data ... the market's psychology is that things just look so much better in the U.S. than they do elsewhere in the world," said Ray Attrill, head of FX strategy at National Australia Bank (OTC:NABZY).

Data out this week showed the U.S. services sector unexpectedly gained steam in August and that jobless claims hit their lowest level since February last week, while in the euro zone, industrial production in Germany, Europe's largest economy fell by slightly more than expected in July.

"Comparing the current growth fundamentals of Europe and the U.S., the U.S. still looks superior," said Attrill.

Sterling similarly languished near Thursday's three-month low and last bought $1.2484, set to clock a weekly loss of more than 0.8%.

IN THE DOLDRUMS

The offshore yuan edged 0.05% higher to 7.3379 per dollar, but remained not far from a 10-month low of 7.3490 hit in August. It is on track for a weekly loss of nearly 1% against the dollar, its worst week in about a month.

China's yuan has depreciated steadily since February as the faltering post-pandemic economic recovery and widening yield gap with other economies, particularly the United States, affected capital flows and trade.

The onshore yuan, which touched its weakest level since 2007 on Thursday, has fallen nearly 6% against the dollar so far this year to become one of the worst performing Asian currencies alongside its offshore counterpart.

"I expect USD/CNY to rise to 7.50 by mid-2024 because no major fiscal stimulus appears to be forthcoming, and thus monetary policy will need to continue bearing part of the burden of supporting the economy," said Alvin Tan, head of Asia FX strategy at RBC Capital Markets.

The yuan's rapid decline has prompted authorities to step in to slow the pace of its depreciation.

The Australian dollar, often used as a liquid proxy for the yuan, was last 0.07% higher at $0.6381, but eyed a weekly loss of more than 1%.

The New Zealand dollar similarly was on track to lose roughly 0.9% for the week and last bought $0.5890.

Also on traders' radars was a struggling yen, which rose 0.15% to 147.06 per dollar but remained on the weaker side of the key 145 level which prompted an intervention by Japanese authorities last year.

While officials have stepped up their jawboning efforts to defend the yen, they have also continued to stress the need to maintain the Bank of Japan's ultra-loose monetary policy.

By David Lawder

WASHINGTON (Reuters) - The International Monetary Fund and World Bank on Thursday issued a rare joint statement pledging to step up their cooperation to address climate change, debt vulnerabilities and countries' digital transitions.

The statement, released ahead of a G20 leaders summit in India this week, said the two institutions can help address mounting challenges facing the global economy - from increasing climate disasters to slowing growth and geopolitical fragmentation - by working together.

"The Bretton Woods institutions, with their universal membership and specialist expertise, are well-placed to make a critical contribution to help countries tackle these challenges," IMF Managing Director Kristalina Georgieva and World Bank President Ajay Banga said in the joint statement.

The IMF and World Bank were established in 1944 at a meeting in Bretton Woods, New Hampshire.

Banga is scheduled to attend his first G20 summit after starting as the World Bank's new president in June, with a mandate to expand the lender's resources to help tackle climate change, pandemics, fragility and other global crises alongside its traditional anti-poverty mission.

U.S. President Joe Biden at the G20 summit intends to focus heavily on reforming the World Bank and other multilateral development lenders to scale up their lending for climate and infrastructure. The U.S. sees the institution as an important counterbalance to China's overseas lending.

The joint IMF-World Bank statement said the two institutions would collaborate on climate change on a "more structured and institutionalized footing.This includes formalizing regular meetings of the new Bank-Fund Climate Advisory Group every two months to consider climate-related developments on key projects, including loans through the IMF's new Resilience and Sustainability Trust, which provides middle-income countries with financing on climate resilience and transition projects.

DEBT VULNERABILITIES

The two institutions also said they will incorporate climate considerations into their work on debt sustainability for low-income countries.

The IMF and World Bank have worked closely on debt sustainability issues, both pushing for improved restructuring frameworks. They launched a sovereign debt roundtable last year to standardize restructuring concepts and speed up debt treatments.

"We will enhance our joint work to help prevent further build-up of debt vulnerabilities, assisting countries to strengthen debt management and transparency and public finances," Georgieva and Banga said, adding that they would also deepen support to creditors and debtors engaged in debt restructurings.

On the digital transition, the two institutions said they would collaborate to help countries to connect their citizens to online services and reduce barriers to digital inclusion.

"We will step up our joint work to help countries increase the effectiveness of revenue collection and expenditure systems and reap the benefits of new digital technologies while mitigating the risks," Georgieva and Banga said.

That will include improving cross-border payment systems while ensuring that such innovations spur growth, poverty reduction and job creation, they added.

By Ann Saphir and Michael S. Derby

(Reuters) -U.S. economic growth was modest amid a cooling labor market and slowing inflation pressures in July and August, a Federal Reserve report published on Wednesday showed, buttressing expectations that the central bank was either done, or close to being done, with interest rate increases.

"Most Districts reported price growth slowed overall," the Fed said in its latest "Beige Book" summary of surveys and interviews conducted across its 12 districts through Aug. 28. It added that "nearly all districts indicated businesses renewed their previously unfulfilled expectations that wage growth will slow broadly in the near term."

The U.S. central bank is widely expected to leave its benchmark overnight interest rate in the current 5.25%-5.50% range at the end of its Sept. 19-20 policy meeting, while leaving open the door to a final quarter-percentage-point hike before the end of the year.

Financial markets are pricing about even odds that the Fed's rate-hike campaign, begun 18 months ago, is over.

Fed officials are, however, keeping their options open. They believe that the 5.25 percentage points of rate hikes delivered since March 2022 are slowing the economy, capping job growth and most importantly slowing inflation, which soared to a 40-year high last year.

Data since the last Fed rate hike six weeks ago has tended to support that view, with the economy adding an average of 150,000 jobs per month over the last three months, down sharply from the prior three months. Inflation, as gauged by the Fed's preferred measure, was 3.3% in July, down from 7% last summer.

That's why even a hawkish policymaker like Fed Governor Christopher Waller was able to say that the central bank has time to take in new data before it decides whether it has to raise rates again, or can hold them at current levels.

Earlier on Wednesday, Boston Fed President Susan Collins also said the central bank has the space to be patient, while acknowledging that inflation pressures, though easing, still remain too high.

Collins, however, added that she did not believe a "significant slowdown is required" to get inflation down and "price stability is achievable with an orderly slowdown and only a modest unemployment rate increase - ideally preserving some of the favorable labor supply dynamics."

Still, prices continue to rise faster than the Fed's 2% goal, employers are adding many more than the monthly 100,000 jobs needed to meet population growth, and economic output appears to be far outpacing the less-than-2% annual growth rate Fed officials say is sustainable in the long run.

Many of the Fed's 12 regional banks found that amid decelerating price pressures, the ebbing was most notable in goods-centric parts of the economy, according to the latest Beige Book report.

CONSUMERS TURN TO BORROWING

The report also flagged some fraying around the edges of the consumer sector, noting that a rising number of households had exhausted savings built up during the coronavirus pandemic and were turning more to borrowing. At the same time, the report found evidence more households were struggling to manage debt.

The New York Fed district said migrants were putting strains on the local safety net. The report said "housing affordability, homelessness, and food insecurity continued to challenge communities" in the San Francisco Fed district, adding that "temporary housing shelters and food banks saw increased demand in recent weeks, especially from older adults."

The report noted that housing remains an issue and that the supply for single-family homes "remained constrained." Home building was picking up, the Fed said, but building affordable properties is being strained by high financing costs and rising insurance premiums.

By Mark John

(Reuters) - As Texas baked in this summer's record temperatures, local UPS driver Chris Begley started feeling unwell before collapsing at a customer's premises. The 57-year-old's death in hospital was announced in late August - just as his trade union was ratifying a deal with UPS on improved heat protections.

"Chris Begley should still be alive to experience them," the Teamsters union said in a statement of provisions such as a promise to include air conditioning in new delivery vans from next year and to retrofit existing vehicles.

In a statement to local media, UPS said it was cooperating with the authorities as they investigated the cause of death. "We train our people to recognize the symptoms of heat stress, and we respond immediately to any request for help," it said.

As global warming leads to more frequent spells of extreme heat around the world, workers are among the most exposed to serious health risks because their livelihoods often depend on them carrying on regardless.

At the same time, studies show that productivity starts to be impaired at temperatures above 24-26 degrees Celsius (75-79 degrees Fahrenheit) and, for some tasks, slashed by half from around 33-34C - levels repeatedly exceeded in a year which included the hottest July on record.

"Unlike some occupational health and safety risks you see a direct impact (from heat) on the health of workers and a direct impact on productivity," said Halshka Graczyk, a specialist on the issue at the International Labour Organization (ILO).

"So does it make sense for the employer to keep a job site running that day if it is more than 35C and productivity is less than 50% of what they are expecting?" Graczyk said of an awkward cost-benefit ratio that more workplaces will start to face.

WORKER RIGHTS

Even on the optimistic assumption that the world hits its Paris Agreement goal of capping warming at 1.5C, productivity losses will amount to 2.2% of global work hours or $2.4 trillion in output by 2030, the ILO estimates.

But finding the point at which employer costs can be minimised without compromising worker welfare is all the harder given the lack of clear data, uneven regulation, and the unequal way that workers around the world will experience heat stress.

Not surprisingly, white-collar workers in air-conditioned offices will be less affected: the big impact will remain initially on outdoor workers in sectors from construction to agriculture and in particular those in the Global South.

Among the most exposed will be the world's 170 million migrant workers. Chaya Vaddhanaphuti, a researcher at Chiang Mai University in Thailand, said his studies of migrant workers from Myanmar underlined their vulnerability.

"These labourers tend to display extra stoicism and endurance - partly because they need to show to their Thai bosses that they can work and hence still get hired," he said.

"This puts them in more danger during the heatwave period and they often lack any paperwork or access to medical services." 

An internationally agreed ILO convention grants workers a right to leave a workplace without fear of retaliation if they have "reasonable justification" to believe they are in danger - but labour advocates say few workers know of the convention or dare use it.

Many European and other usually temperate countries still have no laws establishing maximum work temperatures. Where they exist - such as in China, with its decade-old 40C cap - monitoring and enforcement is patchy.

Often that is because workplace regulators lack resources: the U.S. Occupational Health and Safety Authority (OCHA) would need 165 years to check each workplace in its remit, estimates labour advocacy group National Employment Law Project (NELP).

"There has to be both carrots and sticks - and without enforcement there are not enough sticks," said Anastasia Christman, senior policy analyst at NELP.

ROLE FOR AUTOMATION

While work temperature caps may prevent some casualties, they do not account for the fact that workers experience stress differently, according to their job role and health profile.

"The number on the thermostat is not as crucial as assessing the risks and talking to the workforce," said Owen Tudor, Deputy General Secretary, International Trade Union Confederation.

Consultations might yield relatively cheap fixes: Tudor cited the example of a meatpacking plant which had found it could reduce heat transfer from worker to worker simply by spacing them out more.

Other solutions have wider societal repercussions. The oft-cited switching of work hours to the cooler hours of early morning or late evening leaves workers having to rearrange childcare or facing limited public transport options.

Automation will have a role to play. French winemaker Jerome Volle harvested before dawn this year - mechanising much of the process - to avoid daytime temperatures of 42C which, he told Reuters, "strain both plant and worker".

Heat exposure is already emerging as a source of worker grievance - be it the strikes by staff at the Greek Acropolis tourist site in July, or the successful suing of a Chinese employer last year for the heat stroke death of a cleaner.

As temperatures rise further, pay and performance practices currently favoured in some sectors - for example piece work and output targets that discourage workers from taking rest breaks - may prove indefensible. And if an extreme weather event like a tornado destroys a factory, should workers still get paid?

"Climate change is such a paradigm shift that all of us need to rethink these legacy economic assumptions," said NELP's Christman. "Just doing workplace protection standards won't be enough."

BEIJING (Reuters) - Three of China's major state banks said on Thursday they will start to lower interest rates on existing mortgages for first-home loans.

The move is one of several support measures flagged by Beijing in recent weeks for the country's crisis-ridden property sector amid mounting concerns over the health of the world's second-largest economy.

Interest rates on existing first-home loans will be cut to the level in place when a home was purchased, the Industrial and Commercial Bank of China Ltd (ICBC), Agricultural Bank of China (OTC:ACGBF) and Bank of China Ltd (BOC) said in statements.

The reduction will come into effect on Sept. 25, they said.

China's home loans totalled 38.6 trillion yuan ($5.3 trillion) at the end of June, representing 17% of banks' total loan books.

($1 = 7.3232 Chinese yuan)

By Rae Wee

SINGAPORE (Reuters) - A buoyant dollar pushed the yen to a 10-month trough on Thursday and kept the euro and sterling pinned near three-month lows, as investors placed their faith in a still-resilient U.S. economy even amid a dour global growth outlook.

The greenback scaled a fresh top of 147.865 yen in early Asia trade, its highest since last November.

Against a basket of currencies, the dollar was last 0.05% higher at 104.91, holding on to some of its gains from the previous session after scaling a six-month peak on news that the U.S. services sector unexpectedly gained steam in August.

The stronger-than-expected data pushed the euro to its lowest since June at $1.0703 on Wednesday, with the single currency last 0.03% lower at $1.0723.

Sterling similarly lost 0.07% to stand at $1.24985, having also bottomed at a three-month trough of $1.24835 in the previous session.

"It certainly was a good (ISM) ... so those thinking of a (U.S.) recession in the near term might be a little bit disappointed," said Joseph Capurso, head of international and sustainable economics at Commonwealth Bank of Australia (OTC:CMWAY) (CBA). "However, the Beige Book ... wasn't that great, actually."

U.S. economic growth was "modest" in recent weeks, job growth was "subdued," and inflation slowed in most parts of the country, the Federal Reserve report published on Wednesday showed.

"I think that what's really driving the dollar is not so much that the U.S. economy is doing great, but it's doing better than elsewhere."

Market pricing shows a near 47% chance that the Fed might deliver another rate hike in November, according to the CME FedWatch tool, though expectations are for policymakers to keep rates on hold later this month.

Conversely, Bank of England (BoE) Governor Andrew Bailey said on Wednesday that the central bank is "much nearer" to the end of its rate-hike cycle, though borrowing costs might still have further to rise because of stubborn inflation pressures.

On the same day, European Central Bank policymakers warned investors that the decision for a rate increase next week was still up in the air, but a rise in borrowing costs was among the options on the table.

"It was surprising to see those dovish comments from Governor Bailey ... that certainly does make us comfortable that they're only going to hike twice more," Capurso said, referring to the BoE.

"As for the ECB, what we're noticing is that there's a real divergence happening between various ECB members, and that to me is suggesting that at most you get one more rate hike out of the ECB."

ASIA DANGER?

In Japan, traders continued to be on intervention watch as a fragile yen struggled to make headway against the dollar even as officials step up their warnings against a sell-off in the yen.

The Japanese currency last bought 147.76 per dollar, having weakened past the closely-watched 145 threshold for nearly a month now. That was the key level which prompted an intervention by the authorities to support the yen last year.

"Yen's verbal intervention begs the question whether a real intervention is likely," said Saxo market strategist Charu Chanana. "As we have seen in the past, real intervention barely reverses the course of the yen sustainably."

The Australian dollar slid 0.05% to $0.63795, while the New Zealand dollar fell 0.01% to $0.5869, with both languishing near their recent 10-month lows.

China's trade figures are due later on Thursday, which could put further pressure on the antipodean currencies if the data points to further weakness in the world's second-largest economy.

The two are often used as liquid proxies for the Chinese yuan.

The offshore yuan was last marginally lower at 7.3241 per dollar.

By Kanishka Singh

WASHINGTON (Reuters) -The office of U.S. Trade Representative Katherine Tai on Wednesday further extended China "Section 301" tariff exclusions on 352 Chinese import and 77 COVID-19-related categories till Dec. 31 that were set to expire on Sept. 30.

THE TAKE

The import tariff exclusions include industrial components such as pumps and electric motors, some car parts and chemicals, bicycles and vacuum cleaners. The COVID-related exclusions include medical products like face masks, examination gloves and hand sanitizing wipes.

WHAT'S NEXT

The extension until Dec. 31, 2023, will allow for further consideration under a statutory four-year review, Tai's office said in a statement on Wednesday.

U.S. Commerce Secretary Gina Raimondo said on Tuesday she does not expect any revisions to U.S. tariffs on China until the U.S. trade representative's office completes the review.

CONTEXT

* Former U.S. President Donald Trump imposed tariffs in 2018 and 2019 on thousands of imports from China valued at some $370 billion at the time, after a "Section 301" investigation found that China was misappropriating U.S. intellectual property and coercing U.S. companies to transfer sensitive technology to do business.

* The duties currently range from 7.5% on many consumer goods to 25% on vehicles, industrial components, semiconductors and other electronics. Among the major categories that escaped tariffs were cellphones, laptop computers and videogame consoles.

* The Trump administration had used Section 301 of the Trade Act of 1974, a statute aimed at combating trade partners' unfair practices, to launch the China tariffs.

* China last week urged Chinese companies investing in the U.S. to be given "equal treatment" and called U.S. 301 tariffs on Chinese imports "discriminatory," when Raimondo visited Beijing.

* Tariffs are only one component of strains in U.S.-China relations off late. Other contentious issues include Taiwan, spying allegations, human rights and the origins of the COVID-19 pandemic.

(Reuters) - The growth in euro zone's gross domestic product (GDP) may come under pressure as corporates ease the pace of investments due to higher borrowing costs, HSBC economists said on Tuesday.

The global bank expects rising interest rates to shave off more than 1% of euro zone's GDP by 2025.

HSBC, however, forecast a "smaller impact" to the British economy as a large chunk of corporate debt is now accounted for by 'bounce back' loans - government-guaranteed programs to help struggling small businesses hit by COVID-19 era lockdowns - fixed at the rate of 2.5%.

A recession in Europe is "certainly possible," HSBC said. However, the corporate sector will not tip the euro zone economy into one, as "fairly healthy" balance sheets limit the risk of businesses going bust, it added.

"The impact has been delayed because, while debt costs are rising, firms are also earning more interest on their deposits which ballooned as a result of subsidies during the COVID-19 pandemic," said Chris Hare, the lead senior economist at HSBC.

HSBC points out that fast-growing lending rates matter more to European businesses than their U.S. counterparts, as bank loans make up the vast majority of European corporate debt compared to U.S. companies.

"But 'excess' deposits are waning and we see the bulk of the interest rate headwinds emerging over the rest of this year and next," Hare added.

The euro zone returned to growth in the second quarter of this year, with a greater than expected expansion after narrowly avoiding a technical recession around the turn of the year.

SINGAPORE (Reuters) - Economists have downgraded Singapore's 2023 growth forecasts and inflation expectations, according to a survey by the country's central bank published on Wednesday, with spillovers from an external growth slowdown cited as the top risk.

The median forecast of 22 economists surveyed by the Monetary Authority of Singapore (MAS) is for Singapore's economy to grow 1.0% this year, down from a forecast of 1.4% in June's survey.

Gross domestic product is projected to expand by 2.5% in 2024.

The median inflation forecast is for headline consumer prices to rise 4.7% this year, down from 5.0% predicted in June. The median forecast for MAS core inflation, which excludes private road transport and accommodation costs, is 4.1%, unchanged from the previous survey.

Both headline inflation and MAS core inflation are expected to ease in 2024, to 3.1% and 2.8% respectively.

The survey was conducted in mid-August, just days after the government slightly cut its economic outlook for 2023 after the country narrowly averted a recession in the second quarter, with weak global demand a key drag on its economy.

About 69% of survey respondents cited the impact of a slowdown in external growth as the downside risk to the domestic outlook.

Tighter global financial conditions and rising geopolitical tensions were cited by survey respondents as the main factors that could potentially weigh on financial market and lending conditions in Singapore.

None of the economists is expecting MAS to make any changes to monetary policy in its review next month.

Majority of the respondents expect corporate profitability to decline this year, while more than half see private residential property prices rising.

By Tetsushi Kajimoto

TOKYO (Reuters) - Japan's top currency diplomat Masato Kanda said on Wednesday that Japanese authorities won't rule out any options on currencies if speculative moves persist, a comment apparently warning against a sell-off in the yen.

It was the strongest warning since mid-August, when the Japanese currency slid past the key threshold of 145 per dollar. Since then, the authorities have stopped firing warning shorts, keeping traders guessing on Japan's intervention strategy.

Kanda, vice minister of finance for international affairs, was speaking to reporters after the dollar broke above 147 yen to edge closer to 148 yen overnight, this year's strongest ever against the Japanese currency.

The dollar has gained momentum on the view the Federal Reserve may raise rates one more time to cope with persistently solid inflation, while the Bank of Japan is expected to continue powerful easing to stoke demand-pull inflation driven by strong wage growth. Such policy diversion is behind the yen's weakness.

"We won't rule out any options if speculative moves persist," Kanda told reporters. "Needless to say, it's important for currency moves to reflect fundamentals."

Japanese core consumer prices, running at above 3% for more than a year has shown little signs of sustainable inflation accompanied by solid wage gains.