IMF cautions against weakening currencies

The International Monetary Fund on Wednesday warned against governments trying to weaken their currencies through monetary easing or market interventions, arguing in a blog post that this would hurt the functioning of the international monetary system and make all nations worse off.

The post, which comes as global central bankers are gathering this week to discuss monetary policy issues in Jackson Hole, Wyo., said that policy proposals to use monetary easing and direct purchases of other countries’ currencies are unlikely to work.

President Trump has stepped up his complaints about a strong dollar hurting U.S. exports in recent days as a key index of the dollar’s value against other currencies rose amid a stock market recovery. On Wednesday, he revived his Twitter campaign for the Federal Reserve to cut U.S. interest rates.

The IMF researchers said that one problem for limiting impacts of U.S. currency fluctuations on the trade balance is that many U.S. imports from China and other countries are invoiced in dollars, not local currencies.

The IMF blog post emphasized that global external imbalances are not grossly misaligned and repeated the fund’s view that China’s external position, which includes the value of the yuan, was broadly in line with fundamentals in 2018.

— Reuters


Inquiry in Airbus blast focuses on flawed part

Investigators probing an engine explosion on an Air France A380 in 2017 are studying a possible manufacturing flaw in a recently salvaged cracked part in a move likely to trigger urgent checks on dozens of Airbus superjumbos, people familiar with the matter said.

The focus of a two-year-old investigation into the midair explosion over Greenland, which left the plane carrying more than 500 passengers with the front of one engine missing, has switched to the recently recovered “fan hub,” the people said.

The titanium alloy part is the centerpiece of a 3-meter-wide fan on engines built for the world’s largest airliner by U.S.-based Engine Alliance, co-owned by General Electric and Pratt & Whitney.

It had been buried in Greenland’s ice sheet since September 2017, when one of four engines on Air France Flight 66 abruptly disintegrated en route from Paris to Los Angeles. It was pulled from the ice in June after an aerial radar search.

France’s BEA air accident agency said it had discovered a “subsurface fatigue crack” on the recovered part and the engine maker was preparing checks.

Besides Air France, other airlines operating the A380 with Engine Alliance power plants include Dubai’s Emirates, Qatar Airways, Abu Dhabi-based Etihad and Korean Air.

— Reuters

Also in Business

JPMorgan Chase is planning to shut down its Chase Pay app in the bank's third reversal on digital offerings in as many months. The bank started informing customers Wednesday that they will no longer be able to pay with their smartphones when shopping in stores. They will still be able to use Chase Pay on the websites and apps of retailers that accept it.

U.S. home sales rose more than expected in July, boosted by lower mortgage rates and a strong labor market, signs the Federal Reserve's shift toward lower interest rates was supporting the economy. A separate report released by the Labor Department on Wednesday suggested the level of employment in the country was slightly lower than previously estimated.

Alphabet's Google and Firefox browser maker Mozilla took action on Wednesday to block Kazakhstan's government from creating an Internet surveillance system using their respective browsers. Google Chrome and Mozilla Firefox will block a certain government certificate that allows its authorities to decrypt and read anything a user types or posts using the browsers.

Walmart's lawsuit against Tesla over fires at more than a half-dozen stores threatens to undermine the automaker's latest bid to reboot its foundering solar unit. In the complaint Tuesday, the retailer said it had leased or licensed roof space at more than 240 stores to Tesla's energy unit, formerly known as SolarCity, to install and operate solar systems.

— From news services