Business

Dollar pauses after strong gains on hawkish Fed bets; bitcoin hits $30,000

Published

1 year ago

April 11, 2023

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The U.S. dollar paused for breath on Tuesday following its best rally this month against major peers as a resilient U.S. labour market bolstered the case for a Federal Reserve rate hike next month.

The yen, which is highly sensitive to long-term U.S. bond yields, managed to claw back some of Monday’s more than 1% slide, as the 10-year Treasury yield also slowed down in Tokyo trading after a sharp two-day climb. The Japanese currency came under additional pressure overnight as the new Bank of Japan governor, Kazuo Ueda, vowed to stick with ultra-easy stimulus setting for the time being.

Leading cryptocurrency bitcoin briefly touched $30,000 for the first time since June.

The U.S. dollar index – which measures the greenback against six major counterparts, including the yen – slipped 0.06% in early Asian trading, following a 0.39% advance at the start of the week.

The dollar eased 0.16% to 133.39 yen , after jumping 1.1% overnight.

Traders now see the Fed as 74% likely to raise rates by another quarter point on May 3 , after data released on Good Friday showed U.S. employers continued to hire at a strong pace in March, pushing down the jobless rate. Last week, money markets priced a hike next month as a coin toss.

The consumer price index (CPI), due on Wednesday, will be the next major clue for Fed policy direction.

Ten-year Treasury yields reached 3.436% overnight before settling around 3.41% in Tokyo. They had dipped to a seven-month low of 3.253% on Thursday. The dollar index dropped to a two-month low of 101.40 on Wednesday.

“Financial markets have been too pessimistic about the U.S. economy since several small U.S. banks collapsed in March,” Commonwealth Bank of Australia strategists Joseph Capurso and Kristina Clifton wrote in a client note, referring to the demise of SVB and Signature Bank.

“Strong underlying CPI is likely to be the catalyst for a change in market pricing for May, and delay pricing for the start of rate cuts,” they said, postulating the dollar index could lift toward the 100-day moving average at 103.91 this week.

The euro added 0.14% to $1.08745 following Monday’s 0.34% retreat. Sterling ticked up 0.11% to $1.2397 after a 0.23% overnight decline.

The Aussie rose 0.12% to $0.6650, clawing back part of a 0.48% slide in the previous session.

Bitcoin touched a fresh 10-month high at $30,000 in early Tuesday trade before last fetching $29,787, after breaking free of recent ranges on Monday.

The digital token had been stuck between about $26,500 and $29,400 for the previous three weeks.

“It seems many traders are convinced the dollar’s days are numbered as it will slowly lose some of that preferred reserve currency status, and that crypto will be one of the beneficiaries,” Edward Moya, an analyst at OANDA in New York, wrote in a note.

“Bitcoin’s ceiling remains the $30,000 level and how it behaves once it trades north of it will determine if the next major bull phase is upon us.”

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Business

Chinese firm aims to expand investments in Pakistan, shows interest in mining sector

Published

3 hours ago

May 17, 2024

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Chinese firm aims to expand investments in Pakistan, shows interest in mining sector

A notable Chinese company has expressed keen interest in expanding its investment in Pakistan, in yet another sign of investor confidence boost in the leadership of Prime Minister Shehbaz Sharif.

A delegation from Chinese firm MCC Tongsin Resources led by its Chairman Wang Jaichen called on PM Shehbaz here on Friday.

The premier invited the Chinese company to invest in Pakistan’s mining sector and manufacturing of export goods.

Shehbaz assured the delegation that his government would extend all-out facilitation to the company from minerals exploration and processing to the export of goods.

The PM instructed the relevant federal ministers and officers to continue consultation with the Chinese firm, taking the Balochistan chief minister, provincial departments and stakeholders on board.

The delegates reposed trust in PM Shehbaz’s leadership, and expressed keen interest in enhancing their investment in Pakistan’s mining and minerals sectors.

The delegation briefed Prime Minister Shehbaz about the construction of a mineral park in Pakistan and their future investment plans.

The premier welcomed the Chinese firm and highlighted the priority steps by his government to promote foreign investment in Pakistan.

He said that being a time-tested friend, China supported Pakistan in every difficult hour for which the Pakistani nation was grateful to the leadership and people of China.

Federal ministers Ahad Khan Cheema, Dr Musaddik Malik, Rana Tanveer Hussain, Jam Kamal Khan and relevant senior officers attended the meeting.

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Business

Govt jacks up power price by Rs1.47 per unit

Published

3 hours ago

May 17, 2024

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Govt jacks up power price by Rs1.47 per unit

The government on Friday increased the electricity tariff by Rs1.47 per unit.

According to Nepra sources, the collection from consumers will take place in August, September, and October.

The electricity companies had requested the funds as part of the third quarter adjustment for 2023-2024, seeking Rs 31.34 billion under capacity charges.

Sources said that Rs5.57 billion were requested for operation and maintenance costs, and Rs12.38 billion were requested for the transmission and distribution impact under monthly fuel cost adjustment.

Previously, Nepra had completed the hearing on the electricity companies’ request under the quarterly adjustment.

Nepra approved the Power Division’s request, allowing an increase of Rs 1.45 per unit in electricity prices.

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Business

Hong Kong allows China’s digital yuan to be used in local shops

Published

3 hours ago

May 17, 2024

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Hong Kong allows China's digital yuan to be used in local shops

Hong Kong will allow mainland China’s pilot digital currency to be used in shops in the city, the head of its de facto central bank said on Friday, marking a step forward for Beijing’s efforts to internationalise the yuan amid rising geopolitical tensions.

The programme, backed by Beijing, will allow mainland Chinese and Hong Kong residents to open digital yuan wallets via a mobile app developed by China’s central bank and will permit them to make payments in retail shops and some online stores in Hong Kong and in mainland China.

Transactions using e-CNY, predominantly for domestic retail payments in China, hit 1.8 trillion yuan ($249.27 billion) as of end of June 2023, with 120 million digital wallets opened, according to the latest disclosure from China’s central bank.

Using the wallet, users can make payments at over 10 million merchants in 17 provinces and cities in the mainland.

Each wallet used in the city will be subject to a balance limit of 10,000 yuan, with single transactions and daily payments capped at 2,000 yuan and 5,000 yuan, respectively, officials from the Hong Kong Monetary Authority said.

Peer-to-peer transfers will not be allowed at the moment, according to the HKMA.

“By expanding the e-CNY pilot in Hong Kong .. users may now top up their wallets anytime, anywhere without having to open a mainland bank account, thereby facilitating merchant payments in the mainland by Hong Kong residents,” HKMA Chief Eddie Yue said.

Currently, users of other digital yuan wallets such as those operated by Ant Group and Tencent can make payments in the city.

Industrial and Commercial Bank of China, Bank of China Ltd, China Construction Bank Corp and Bank of Communications Co have been selected as e-CNY wallet operators.

The yuan’s use in global finance remains low, though it has shown steady increases.

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