As the world’s top Central Bankers gather in Wyoming this week, their relief about a stronger global economy will be tempered by a growing unease that inflation remains inexplicably low.
Federal Reserve Chair Yellen and ECB President Draghi will be among the officials addressing this year’s installment of the annual conference hosted by the Kansas City Fed. The slow progress on inflation suggests that the Phillips Curve _ a relationship where low joblessness begets higher prices _ may no longer operate. If central bank leaders reaffirm their belief that it will start to work, that would be a sign of confidence that prices gains are coming.
On Monday, Sterling edged up against a broadly weaker Dollar, but lost more ground against the Euro as doubts around UK economic growth and Brexit talks continued to weigh on the currency. Britain released another pair of position papers for the divorce talks with the European Union, part of efforts by ministers to head off suggestions that negotiations are going slowly and may be delayed later this year.
Meanwhile, the onshore Renminbi jumped 0.1% against the greenback, to its strongest in two weeks at Rmb6.6579 per Dollar, after the People’s Bank of China set the midpoint around which the Renminbi can trade 2% in either direction at Rmb6.6597, its strongest in 11 months. Moreover, the offshore Renminbi, which is not bound by the midpoint, was 0.1% firmer at Rmb6.6803, near the highest level of the year holding an Asia-beating run that has some analysts flagging concern about the sustainability of the rally.