Business

Dollar tracks Treasury yields higher, bitcoin holds firm

Published

4 months ago

January 9, 2024

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Dollar tracks Treasury yields higher, bitcoin holds firm

The dollar edged higher on Tuesday, tracking a rise in US Treasury yields as investors questioned whether market pricing for interest rate cuts this year is justified.

In cryptocurrencies, bitcoin held near its strongest level since April 2022 on growing anticipation the Securities and Exchange Commission will imminently approve spot bitcoin exchange-traded funds (ETF).

Money market traders price in around 135 basis points worth of easing for the Federal Reserve this year, with approximately a 60% chance that they start cutting in March.

“It’s not really been a straight line for the dollar this year, which is largely taking its lead from the developments in US fixed-income markets,” said Kamal Sharma, senior G10 FX strategist at Bank of America.

The US benchmark 10-year yield was up 4.5 basis points on Tuesday to 4.0455%. It has continued to rise after hitting its lowest level since July at 3.783% at the end of last year.

“The market is still trying to find its feet in terms of the trajectory and timing of the first US rate cut,” added BofA’s Sharma, who expects the Fed to start cutting rates at its March meeting.

“Our base case scenario is for a soft landing, lower dollar, and bull steepening, and that broadly should be supportive of risk assets more generally.”

The US dollar index, which measures the greenback against a basket of six currencies, was last up more than 0.1% at 102.42, having risen 1% last week.

The euro last stood at $1.0934, away from its recent three-week low of $1.0877, while sterling slipped 0.2% to $1.2721.

In Asia, data on Tuesday showed core inflation in Japan’s capital slowed for the second straight month in December, taking some pressure off the Bank of Japan to rush into exiting ultra-loose monetary policy.

The yen was little changed following the release, and was last at 144.01 per dollar, up 0.1%.

The Aussie last bought $0.6698, away from its three-week low of $0.6641 hit last Friday. The kiwi slipped 0.2% to $0.6243 but remained some distance away from Friday’s three-week trough of $0.6182.

Elsewhere, bitcoin stood at $46,708, having scaled a 21-month top of $47,281 in the previous session.

A raft of investment managers on Monday disclosed the fees they plan to charge for their proposed spot bitcoin ETFs, in another step toward approval this week by the US securities regulator.

“Investor expectations are justifiably high,” said eToro global markets strategist Ben Laidler, citing increased engagement from the SEC.

“This suggests downside to a disappointing result, and some may be tempted to even ‘sell the news’ on a positive outcome,” Laidler added.

The second-largest cryptocurrency, fell 1.4% to $2,299.

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Business

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

Published

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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