By David Shepardson

WASHINGTON (Reuters) -U.S. government agencies are targeting buying 9,500 electric vehicles in the 2023 budget year, but face supply issues and higher costs, a federal report said on Wednesday.

That's almost three times the number acquired in the prior budget year.

The Government Accountability Office said 26 agencies with approved EV acquisition plans estimated they would need over $470 million for vehicle purchases and almost $300 million in estimated costs to design and install the necessary infrastructure and for other expenses. The vehicles purchase would cost almost $200 million more than the lowest-priced comparable gasoline-powered vehicles. The agencies represent more than 99% of the federal vehicle fleet excluding the U.S. Postal Service (USPS), which is an independent federal entity.

The White House did not immediately comment.

Agencies face hurdles to buy as many EVs as they would like or are unsure if EVs will meet all needs. The Transportation Department told GAO it initially wanted to order 430 ZEVs for 2022 but their order was scaled back to 292 due, in part, to order cancellations from manufacturers.

Customs and Border Protection (CBP) officials told GAO they do not believe that EVs "can support law enforcement equipment or perform law enforcement missions in extreme environments, such as those on the borders," the report said.

President Joe Biden in December 2021 issued an executive order directing the government to end purchases of gas-powered vehicles by 2035. Biden's order also directs that 100% of light-duty federal acquisitions by 2027 be electric or plug-in hybrid vehicles (PHEV).

Biden's order covers 380,000 federal vehicles and covered agencies purchases about 45,000 annually. It does not apply to USPS.

Federal agencies quintupled purchases of EVs and PHEVs in the 12-months ending Sept. 30, 2022 moving from 1% of vehicle acquisitions in 2021 to 12% of light-duty purchases in 2022, or 3,567 total.

In May, USPS said it expected to receive next-generation delivery vehicles in June 2024, nine months behind schedule.

By Patricia Zengerle

WASHINGTON (Reuters) - Republican and Democratic members of the U.S. House of Representatives introduced legislation on Wednesday that would authorize President Joe Biden's administration to negotiate a tax agreement with Taiwan, seeking to foster investment as Washington works to shore up the island against a rising China.

The lawmakers, including House Foreign Affairs Committee Chairman Michael McCaul and top Democrat Gregory Meeks, said the agreement, similar to a treaty, would facilitate investment, protect against tax evasion and allow businesses in both the United States and Taiwan to avoid double taxation.

"In addition to the advantages we will receive from more investment from Taiwan, this is another important step in safeguarding Taiwan and maintaining peace and stability in the Indo-Pacific," McCaul said in a statement.

The bill is a companion to a measure introduced in the Senate in May by lawmakers including the chairman and ranking member of the Senate Foreign Relations Committee.

Washington and Taipei do not have formal diplomatic relations, so the lack of a tax agreement means Taiwanese businesses and individuals are taxed on their income by both the U.S. and Taiwanese governments.

China views democratically governed Taiwan as its own territory and has increased military, political and economic pressure to assert those claims.

Taiwan is a major global supplier of the semiconductor chips essential to a wide range of consumer goods and military equipment.

(Reuters) - Power demand in Texas hit a record high for a second straight day on Tuesday as homes and businesses cranked up air conditioners to escape a brutal heat wave.

The Electric Reliability Council of Texas (ERCOT), which operates the grid for more than 26 million customers representing about 90% of the state's power load, has said it has enough resources available to meet soaring demand.

Texas residents have worried about extreme weather since a deadly winter storm in February 2021 left millions without power, water and heat for days as ERCOT struggled to prevent a grid collapse after the closure of an unusually large amount of generation.

After setting 11 demand records last summer, ERCOT said usage hit a preliminary 82,592 megawatts (MW) at 1800 Central Time (2300 GMT), which would top the grid's previous all-time high of 81,911 MW set on July 17.

That is the fifth record high in ERCOT this summer.

One megawatt can power around 1,000 U.S. homes on a typical day, but only about 200 homes on a hot summer day in Texas.

Meteorologists at AccuWeather forecast high temperatures in Houston, the biggest city in Texas, would hit at least 100 degrees Fahrenheit (37.8 Celsius) every day from July 17-21. That compares with a normal high of 94 F for this time of year.

    Next-day or spot power prices at the ERCOT North Hub, which includes Dallas, fell to $45 per megawatt hour (MWh) on Tuesday from a nearly seven-month high of $475 on Friday. That compares with an average of $38 so far this year, $78 in 2022 and a five-year average of $66.

Rising economic and population growth has boosted electricity use in Sun Belt states like Texas and Arizona even though overall U.S. power demand is projected to ease in 2023 after hitting a record high in 2022.

(This story has been refiled to correct the GMT time in paragraph 4)

By Melanie Burton and Navya Mittal

MELBOURNE (Reuters) - Rio Tinto (NYSE:RIO) flagged concerns about a global economic slowdown on Wednesday as it logged a raft of production issues across its operations but said its iron ore production should be at the upper end of its expectations for the year.

Prices of iron ore, from which Rio Tinto derives around 70% of its profits, eased over the second quarter on concerns over China's debt-ridden property sector, but could improve after Beijing on Tuesday pledged to roll out policies to boost growth.

"China's economic recovery has fallen short of initial market expectations, as the property market downturn continues to weigh on the economy and consumers remain cautious despite monetary policy easing," Rio Tinto said in its quarterly report.

"Manufacturing data in advanced economies showed a further slowdown and recessionary risks remain."

The Anglo Australian miner recorded a small miss on its second-quarter iron ore shipments on Wednesday, hurt by a train derailment during the quarter, but said it was on track for full-year shipments in the upper half of its forecast range of 320 million to 335 million metric tons.

"It's good to see solid iron ore production expectations for the full year, but on the margin it's probably slightly disappointing given other production downgrades," said Glyn Lawcock of Barrenjoey in Sydney, adding that Rio's $900 million increase in working capital could impact shareholder returns.

The world's biggest iron ore producer shipped 79.1 million metric tons of the steel-making ingredient from its Pilbara operations in the three months ended June 30, down slightly from a year earlier and short of an estimate of 81 million metric tons compiled by Visible Alpha.

Rio downgraded its expectations for refined copper production, alumina production, and output at its Canadian iron ore operations and warned of rising costs.

"Production downgrades during the quarter highlight that we still have much more to do," Rio Tinto Chief Executive Jakob Stausholm said in the report.

Rio cut its refined copper guidance by about 10% to 160,000 to 190,000 metric tons and raised its cost guidance due to a smelter rebuild at its Kennecott operations in Utah that has also been delayed by a month.

Wildfires in Northern Quebec impacted Canadian iron ore production, it said.

Meanwhile, Rio is reviewing the $140 million estimate and development timeline for its Rincon lithium project in Argentina due to rising costs. Rio will report its first-half profit on July 26.

(Reporting Melanie Burton in Melbourne, and Navya Mittal and Rishav Chatterjee in Bengaluru; Editing by Shounak Dasgupta and Sonali Paul)

SEOUL (Reuters) - South Korea has decided to raise the minimum wage by a three-year low of 2.5% in 2024, its Minimum Wage Commission said on Wednesday, amid slowing growth and high inflation.

The minimum hourly wage will be raised to 9,860 won ($7.80) next year, up from 9,620 won this year, the commission said. The figure was reached after 110 days of discussion, the most number of days it has ever taken reach an agreement.

It will be the smallest increase since 2021, when the wage was raised by a record low of 1.5% amid the COVID-19 pandemic.

($1 = 1,263.9500 won)

By Rae Wee

SINGAPORE (Reuters) - The dollar held just above an over one-year low on Wednesday as traders assessed the U.S. rate outlook, while the New Zealand dollar spiked briefly after a higher-than-expected inflation reading pushed back prospects of policy easing further out.

The U.S. dollar managed to nudge up after a mixed retail sales report overnight, with sales growth missing forecasts in June but consumers boosted or maintained spending elsewhere, pointing to consumer resilience that is likely to keep the economy on a solid growth path.

Against a basket of currencies, the U.S. dollar rebounded from a 15-month low hit in the previous session, with its index steadying at 99.943 in early Asia trade.

"The (data) showed retail sales being resilient, and I think that's because the U.S. wage growth is still strong," said Tina Teng, market analyst at CMC Markets.

The greenback has paused its steep decline from last week in the wake of a cooler-than-expected U.S. inflation reading that led to traders pricing in an imminent peak in U.S. rates.

Economists polled by Reuters expect the Federal Reserve to deliver a 25-basis-point rate hike at its upcoming policy meeting this month, with a majority betting that to bring an end to the central bank's current monetary tightening cycle.

Across the Atlantic, European Central Bank (ECB) policymakers are also adopting a more dovish tone on the rate outlook, with governing council member Klaas Knot saying in an interview on Tuesday that the ECB will look closely for signs of inflation cooling down in the coming months to avoid overly tightening policy.

The euro was last steady at $1.1230, away from the previous session's 17-month peak of $1.1276.

Sterling bought $1.3035, ahead of UK inflation data due later on Wednesday.

"The stickiness of UK inflation measures has contrasted notably with price measures in both the euro zone and the U.S. which have been moving lower," said Rabobank's head of FX strategy Jane Foley.

"If the UK economy remains resilient, we expect that (the pound) is likely to react well to hawkish expectations regarding (Bank of England) policy.

"However, if recession risks rise in the UK, the pound may revert to pushing lower on rate rises as investors take fright on the overall UK economic backdrop and cut back their long (pound) positions."

Over in New Zealand, consumer inflation came in slightly above expectations in the second quarter, data out on Wednesday showed, causing a brief spike in the kiwi as traders pushed out expectations for when the Reserve Bank of New Zealand might start cutting its cash rate.

It was last 0.25% higher at $0.6291, after jumping more than 0.6% to a session high of $0.6315 following the release.

"While inflation is 'lower', it is not 'low' by any stretch of the imagination. Importantly, measures of core inflation are continuing to run at rates of around 6%, and some have actually picked up in the June quarter," said Satish Ranchhod, senior economist at Westpac in New Zealand.

"That points to lingering strength in underlying price pressures."

The Australian dollar was last 0.08% lower at $0.68065.

Elsewhere, the Japanese yen fell marginally to 138.88 per dollar.

Bank of Japan Governor Kazuo Ueda said on Tuesday there was still some distance to sustainably and stably achieving the central bank's 2% inflation target, signalling his resolve to maintain ultra-loose monetary policy for the time being.

By Safiyah Riddle

(Reuters) - Applications to start new U.S. businesses surged to the highest level in two years in June, despite high interest rates and uncertain economic outlook, according to a Commerce Department report released on Monday.

Business applications increased 6.2% in June compared with May with a seasonally adjusted 465,906 new applications.

Filings from applicants that have a high likelihood of creating a payroll and adding jobs to the economy, such as those from existing corporate entities or those indicating they are already hiring, rose 6.0% to 149,536 new applications. The data is collected from business applications for tax identification numbers.

Start-up activity flourished during the coronavirus pandemic with the help of historic stimulus money from the federal government and ultra-low interest rates, hitting a record high in July 2020 and remaining well above pre-pandemic levels since then. They slowed somewhat last year as the Federal Reserve kicked off aggressive interest rate hikes to lower inflation, but have been climbing again this year.

June's resurgence emphasizes growing optimism among small businesses inspired by the Fed's recent pause in rate hikes, as well as the growing expectation that the central bank's aggressive rate hiking strategy is nearing an end.

The report's forward-looking business formation projections also improved after two months of declines. The Census Bureau estimated that 32,148 new business startups with payroll tax liabilities will actually form within four quarters of application, a 4% increase compared to estimates from May.

By Ali Kucukgocmen

ISTANBUL (Reuters) - Turkey's central bank is expected to raise its policy rate by 500 basis points to 20% this week, a Reuters poll showed on Monday, making good on its pledge of further tightening with another sharp hike to curb inflation which is set to rise again.

The central bank raised its policy rate by 650 basis points in June to 15%, while promising to continue tightening until a significant improvement in the inflation outlook is achieved.

The rate hike and the hawkish tone were the strongest signals of a reversal after years of loose policy under President Tayyip Erdogan, who was prioritising growth and investments.

The tightening still remained below expectations, with economists saying that Erdogan's influence over the central bank limits how far they can go in tightening policy. Real rates are also still deeply negative.

Economists see a further hike this week to 20%, according to the median estimate of 23 economists in a Reuters poll, with forecasts ranging between 17% and 21.50%.

"Anything less than a move to hike the policy rate to 20% will be seen as disappointing and a signal that Erdogan is constraining what (Finance Minister Mehmet) Simsek and (Central Bank Governor Hafize Gaye) Erkan can do," said Tim Ash of BlueBay Asset Management.

Turkey's annual inflation surged to a 24-year high of 85.51% last October, mainly due to the constant depreciation of Turkey's lira due to Erdogan's policy of low rates.

Inflation eased to 38.21% by June but is expected to rise again. The year-end forecast stood at 51.50% in the latest Reuters poll, but economists now say it will likely be around 60% after Ankara hiked several tax rates to support its deteriorating budget and as the lira continues to decline.

The central bank was expected to keep hiking rates in coming months, with the median estimate of 13 economists in the Reuters poll for the policy rate at year-end standing at 25%.

The forecasts ranged between 24% and 35%.

The central bank's one-week repo rate had been slashed to 8.5% from 19% since 2021 under Erdogan's economic programme. The bank had also used foreign exchange reserves to prop up the lira, which nonetheless plunged to a series of record lows.

As a result of the recent policy reversals, the central bank's net international reserves rose to $13.17 billion in the week to July 7, continuing to rebound from a record low of $-5.7 billion it touched in June.

The central bank will announce its rate decision at 1100 GMT on Thursday.

By Selena Li

HONG KONG (Reuters) - Asian stocks fell on Tuesday as weak Chinese economic data released the previous day continued to weigh on sentiment, while investors were waiting to see if U.S. retail sales data would shine a light on the path for U.S. interest rates.

MSCI's broadest index of Asia-Pacific shares outside Japan slipped 0.63% in the morning session.

Investors are waiting for stronger signs of inflation cooling, with the readings on U.S. retail sales and U.S. industrial production to be released later on Tuesday. Economists reckon retail sales in June will show a 0.5% rise from May.

"People think of the tug of war between growth and inflation still. This week we have a number of US economic data that will give a clear indication on whether further rate hikes are needed," said Gary Ng, senior economist at Natixis Corporate and Investment Bank.

The U.S. Federal Reserve, European Central Bank and Bank of Japan are holding policy reviews next week.

After the cancellation of trading on Monday due to a typhoon, Hong Kong stocks were catching up with the fall in Chinese stocks triggered by data showing the post-pandemic bounce in China's economy was over, with quarter-on-quarter growth of 0.8% in the second quarter.

Ng said Asian investors were struggling to find some positivity after the "very poor Chinese economic data".

The benchmark Hang Seng index dropped 1.74%% while the technology sector fell 1.89%. China A shares were down 0.4% during early session on Tuesday. Japan's Nikkei, however, eked out a gain of 0.18%.

A possible divergence of U.S. Federal Reserve and European Central Bank on rate hikes has recently caused dollar to weaken.

Money markets have largely priced in a 25-basis-point rate hike from the Fed at its policy meeting later this month, though there are expectations that rates will come down as early as December.

Conversely, investors expect the European Central Bank and the Bank of England to extend their rate-hike cycle.

The Bank of Japan (BOJ) holds its monetary policy meeting next week, with investors on the lookout for whether it will start phasing out its ultra-dovish policy stance.

The U.S. dollar index dipped slightly to 99.85 in early Asia trade, having struck its lowest since April 2022 on Friday. The euro firmed 0.11% to $1.1246.

Benchmark 10-year notes were flat, with a yield of 3.7989%.

U.S. crude rose 0.22% to $74.31 per barrel and Brent was at $78.64, up 0.18%.

Spot gold added 0.1% to $1,957.50 an ounce. U.S. gold futures were up by 0.26% at $1,960.19 an ounce.

By Rae Wee

SINGAPORE (Reuters) - The dollar wobbled near an over one-year low against its major peers on Tuesday, as investors awaited fresh catalysts to gauge if the greenback has further downside in the wake of last week's cooler-than-expected U.S. inflation report.

The U.S. dollar index, which measures the greenback against a basket of six currencies, dipped slightly to 99.84 in early Asia trade, after having tumbled to its lowest since April 2022 on Friday.

The index also clocked its worst week of 2023 last week, after data showed U.S. inflation subsided further with consumer prices registering their smallest annual increase in more than two years, taking pressure off the Federal Reserve to continue raising interest rates.

"I think the dollar can stay under selling pressure," said Carol Kong, a currency strategist at Commonwealth Bank of Australia (OTC:CMWAY). "Markets are focused on the end of the FOMC tightening cycle."

Against the greenback, the euro hit a fresh 17-month high of $1.1256, while sterling gained 0.15% to $1.3094, not far from last week's top of $1.3144, also its highest since April 2022.

Money markets have largely priced in a 25-basis-point rate hike from the Fed at its policy meeting later this month, though see rates coming down as early as December.

Conversely, investors expect the European Central Bank and the Bank of England to have further to go in their rate-hike cycle.

Elsewhere, the Japanese yen rose marginally to 138.66 per dollar and remains more than 4% clear of a seven-month low it hit last month.

The Bank of Japan (BOJ) holds its monetary policy meeting next week, with investors on the lookout for whether the central bank will start phasing out its ultra-dovish policy stance.

"More market participants have priced in chances of BOJ widening its yield curve control policy's trading band by 25 bps in the next meeting," said Ryota Abe, an economist at SMBC.

In other currencies, the Australian dollar pared some earlier gains after minutes of the Reserve Bank of Australia's July policy meeting showed the decision to keep interest rates on hold came as policy was clearly restrictive.

The Aussie was last 0.07% higher at $0.6821.

The New Zealand dollar was nursing losses from the previous session, rising 0.1% to $0.6332.

The Antipodean currencies, often used as liquid proxies for the Chinese yuan, had dipped on Monday after China's second quarter GDP data showed the world's second largest economy growing at a frail pace as demand weakened at home and abroad.

The offshore yuan edged marginally higher to 7.1749 per dollar.

"Everyone is just waiting for the (Chinese) authorities to come out with concrete measures," said Khoon Goh, head of Asia research at ANZ.

"The rhetoric coming out from the government has been, in a sense, saying they want to support growth, but I think for the markets, they actually want to see the follow up, concrete action, to back up those words."