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Yen falls to fresh 11-month low against dollar, focus on intervention risks

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8 months ago

September 25, 2023

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Yen falls to fresh 11-month low against dollar, focus on intervention risks

The dollar rose against the yen to an almost 11-month high on Monday following last week’s gains, keeping traders focused on Japan intervention risks.

The yen fell 0.17% to 148.66 per dollar, touching its lowest since late October and adding to Friday’s declines after the BOJ maintained ultra-low interest rates, while Governor Kazuo Ueda stressed the need to spend more time assessing data before raising interest rates.

The Japanese currency remained within striking distance of 150, a level which some market watchers saw as a line in the sand that would spur forex intervention from Japanese authorities similar to that of last year.

“According to BoJ Governor Kazuo Ueda there was no sign yet of stable inflation on a sustainable basis so that the BoJ will patiently continue with monetary easing under the current framework. That was a clear dampener for the yen,” said Esther Reichelt, FX analyst at Commerzbank.

A yen overshooting would be seen by many as a catalyst for renewed interventions to strengthen the Japanese currency, similarly to last year, she added.

“It is possible of course that exactly such fears of interventions might have prevented a weaker yen for now”.

The dollar index , which on Friday touched an over six-month high, firmed at 105.64 and was last 0.06% higher.

Last week, the Federal Reserve kept rates on hold at its policy meeting, but surprised markets by signalling U.S. rates would need to stay higher for longer than expected.

On Friday, Fed officials warned of further rate hikes ahead. Markets now see a 25% chance of a 25-basis-point increase at November’s meeting.

Elsewhere, the Swedish crown jumped to an almost seven-week high, up 1% against the euro to 11,7300.

Nick Rees, FX market analyst Monex Europe, said the crown was firming on the back of news that Swedish property group SBB (SBBb.ST) had secured an 8 billion crown ($719 million) cash boost and said it would reorganise its business.

“It is a positive sign for the Swedish economy, and we’ve not had many of them recently,” he said.

EURO FACES GROWTH FEARS
The euro edged 0.1% lower to $1.0633, moving towards a six-month low of $1.0615 touched on Friday against a stronger dollar.

The single currency was on track to lose roughly 1.9% for the month, its steepest monthly fall since May, amid growing recession fears.

A survey showed on Monday German business morale deteriorated slightly in September, falling for the fifth month and underlining recession fears in the euro zone’s largest economy.

“That (recession threat) does not only suggest that a further rate hike in the euro zone is becoming increasingly less likely but also that the market is going to stick to its rate cut expectations for next year, which is putting pressure on the euro for now,” Reichelt said.

The European Central Bank has reached the point where it needs to be wary of raising interest rates too high and should try to avoid a hard landing of the economy, ECB policymaker Francois Villeroy de Galhau said on Monday.

Sterling eased 0.17% to $1.2224, after sliding more than 1% last week on the back of the Bank of England’s pause on its rate-hike cycle, a decision which came a day after data showed Britain’s high inflation rate unexpectedly slowed.

The pound was headed for a 3.5% fall in September, its worst monthly performance in a year.

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

Published

1 day 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

1 day 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

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1 day 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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