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Dollar edges up as US rates seen higher for longer

June. 05 (Agencies) — US dollar stayed firmed against major peers in Asian trading after a robust US jobs report spurred traders to price in higher interest rates for longer.Australian dollar erased early losses after a report showed a pick-up in services activity in key trading partner China.The yuan also got a boost. The Canadian dollar proved resilient, buoyed by a spike in crude oil prices.US dollar garnered support from higher Treasury yields after data on Friday showed payrolls in the public and private sector increased by 339,000 in May, far outstripping the 190,000 forecast on average by economists polled by Reuters.US currency gained 0.11% to 140.135 yen, as 10-year US Treasury yields climbed more than 3 basis points to 3.727% i...

June 5, 2023 at 9:01 pm | Economic Affairs

Chinese yuan eases on US jobs report seen, keeping Fed hawkish

June. 05 (Agencies) — Chinese yuan eased by reflecting broad dollar strength in global markets on Monday as a robust US jobs report spurred bets of further rate hikes in the world’s largest economy.Prior to the market opening, the People’s Bank of China (PBOC) set the midpoint rate at 7.0904 per dollar, 35 pips firmer than the previous fix of 7.0939.Official guidance fixing has been in line with market projections over the past few weeks. And Monday’s fixing was 14 pips firmer than Reuters’ estimate of 7.0918. “The absence of any explicit push back from policymakers is fuelling confidence in driving the pair (dollar/yuan) higher,” said Christopher Wong, FX strategist at OCBC Bank.“Daily RMB fix continues to come in consiste...

June 5, 2023 at 8:58 pm | Economic Affairs

Eyes on Fed moves; Most Asian FX weaken on dollar strength

June. 05 (Agencies) — Mostly Asian currencies weakened against a strong dollar on Monday instead of indications of an easing US labour market reaffirmed expectations of a pause in rate hikes by Federal Reserve.South Korean won weakened as much as 0.41%, set for its worst day in nearly two weeks while Indian rupee depreciated by 0.22% to its lowest level in over a week.In United States, the Fed is expected to pause in interest rate hikes at its June 13-14 meeting after last week’s data highlighted wage pressures had started to ease and the unemployment rate climbed off a 53-year low.However, Moh Siong Sim, a foreign exchange strategist at the Bank of Singapore suggested that the Fed might reengage in further policy tightening after the ...

June 5, 2023 at 8:56 pm | Economic Affairs

China: A Catalyst for Pakistan’s Economy

China's relations with Pakistan have been characterized by sincerity, mutual trust, and a shared commitment to promoting regional peace and stability Prof. Engr. Zamir Ahmed Awan It is true that Pakistan's economy was among the fastest-growing in the region during the 1950s, 1960s, and 1970s. The country was seen as a model of development for many countries in the region, and its economic gains were admired and inspired other countries to learn from its success. It is also true that the focus on the Afghan war in the 1980s and beyond, as well as poor governance, lack of vision, planning, and sincerity, have contributed to the economic decay that has led to the current state of Pakistan's economy. The Afghanistan crisis has had...

May 29, 2023 at 10:55 am | Economic Affairs

The Blue Solution

There are broadly six sectors in Blue Economy valued at $24 trillion while it is credited for generating one out of ten jobs in the world. Unfortunately, Pakistan has not been truly focusing on its maritime possessions Reema Shaukat The government of Pakistan has been striving to strike a deal with the IMF, seek loan from friends and put economy on the track. As yet, all the paths seem to be embedded with hurdles but the government is hedging its bet against default. It seems we have missed many boats and one of them is taking advantage of our marine resource abundantly available in our south. Pakistan is blessed with an over 1000 km long coastline, 240,000 sqkm Exclusive Economic Zone (EEZ), 50,000 sqkm Continental Shelf (CS)...

May 29, 2023 at 10:45 am | Economic Affairs

Economic Potential of Ports

Seaports are crucial in providing opportunities for economic growth, enhancing regional development and contributing to Pakistan's GDP. Dr. Anjum Sarfraz Seaports are a vital component of a country's economy as they serve as gateways for international trade and commerce. They play a critical role in facilitating the movement of goods and commodities across borders and connecting countries to the global market. Seaports provide an essential infrastructure for the transportation and handling of raw materials, finished goods, and other products. Countries that have developed seaports equipped with advanced equipment and technology can efficiently handle cargo, thereby providing a competitive edge in global trade. These ports also act...

May 29, 2023 at 10:39 am | Economic Affairs

Economic Travails

Pakistan stands nowhere on the global indexing of productivity, unless we double the productivity in one year through efficiency and effectiveness. Ghulam Murtaza The 23rd March is the day when the seed of Pakistan was cultivated by adopting a resolution in 1940 for a separate country for the Muslims of this part. The founder of Pakistan visioned a thriving and independent new state free from corruption and bigotry, where the rule of law would prevail. But Unfortunately, we got directionless right from the beginning, and resultantly condensed shadows of insolvency overtook us like dodder plants. This is not only financial bankruptcy, but we have also been in moral bankruptcy, which is more than all. Should a country with countless...

May 29, 2023 at 10:31 am | Economic Affairs

Pakistan-Germany Ties

Moving from Strength to Strength The relationship between the countries is on an upward trend, which it is expected to further strengthen and deepen in the years to come. Dr Mohammad Faisal Pakistan and Germany enjoy extremely cordial relations since the 1950s. The year 2021 marked the 70 years of establishment of bilateral relations with Germany with a number of commemorative activities, including issuance of a special stamp and coin, undertaken by both sides. The relationship has been moving from strength to strength. Pakistan and Germany remain actively engaged in the areas of politics, economy, defence and education and culture, that further strengthen the bilateral relationship. Pakistan-Germany bilateral relations are gov...

May 29, 2023 at 10:23 am | Economic Affairs

Pakistan Charter of Economy

Pakistan's tax system has been faced with several challenges including low tax-to-GDP ratios, a narrow tax base, and high rates of tax evasion. Syed Ali Ehsan Pakistan's tax-to-GDP ratio was only 10.4% in 2020, which is significantly lower than the average of 15.3% for countries in the South Asian region (World Bank). Economists and policymakers have proposed that a low rate, flat, broad-based, and predictable tax regime can help Pakistan overcome these challenges and achieve greater economic growth and development. The proposals are reflected in the Pakistan Charter of Economy. Low Rates Several reasons support the implementation of a simplified tax system with a low tax rate. First, low tax rates encourage taxpayers to comply...

May 29, 2023 at 10:14 am | Economic Affairs

Milieu of Pakistan’s Economy

The government-led development program, including PSDP at the Federal level and ADP at the provincial level, is the main contributor to growth episodes M. Ali Kemal Since its inception, Pakistan has experienced several cycles of growth, with stability requiring consistent policies. The country has seen consecutive years of over 5% growth rates, but the irregular percentage segments of growth are often associated with policies that rely on modern capital, resulting in a balance of payments deficit and inflation. The country's economy is highly dependent on imports, but exports remain stagnant, leading to an increase in the trade deficit, which has been financed by remittances for the past decade and a half. The government-led devel...

May 29, 2023 at 9:51 am | Economic Affairs

Asian FX as stalled US debt talks hit risk appetite

May. 24 (Agencies) — Asian currencies started under pressure on Wednesday as US debt ceiling talks showed no signs of progress ahead of the fast-approaching deadline, unnerving market participants and dampening their appetite for risk.Equities in Asia too were subdued, with stocks in Singapore and South Korea falling 0.3% and 0.2%, respectively, while shares in Malaysia and Indonesia were little changed.In the US, representatives of President Joe Biden and congressional Republicans ended another round of debt ceiling talks on Tuesday with no signs of progress as the two parties remain deeply divided about how to rein in the federal deficit.The Malaysian ringgit fell 0.3%, hitting its lowest level since November, while the South Korean wo...

May 24, 2023 at 5:04 pm | Economic Affairs

Japan’s Nikkei drops to 33-year low, snaps 8-day winning breathless rally

May. 23 (Agencies) — Japan’s Nikkei share average dropped sharply from a 33-year high on Tuesday as some investors swooped in to take profits following a breathless eight-day rally.Nikkei started the day strong, reaching a fresh peak at 31,352.53 - a level last seen in August 1990 - but pared gains after the midday break, attracting more sellers.Declines cascaded quickly to push the benchmark down as much as 0.83% before the index closed the day down 0.42% at 30,957.77.In an unusual move that perplexed traders, Toyota Motor Corp tumbled 4.77% in the final moments of trading to be the Nikkei’s biggest decliner.The broader Topix fell 0.66% to 2,161.49.“The Nikkei started to look top heavy in the afternoon, which invited some profit-t...

May 23, 2023 at 3:18 pm | Economic Affairs

Asian currencies stay dull, dollar boosts on Fed’s rate-hike talk

May. 23 (Agencies) — Asian currencies stayed dull on Tuesday, with dollar getting a boost from rising expectations of US interest rates to remain elevated for longer, while traders awaited the outcome of US debt ceiling talks.The Thai baht depreciated the most among its peers, falling 0.6%, eyeing losses for a sixth session, and falling to its lowest since March 15.Indonesian rupiah, Philippines peso, and Singapore dollar were little changed.South Korean won appreciated 0.4% and its local benchmark rose, buoyed by optimism for a deal on the US debt ceiling negotiations.While vowing to keep the talks alive, US President Joe Biden and House Speaker Kevin McCarthy could not reach an agreement Monday on how to raise the US government’s $31...

May 23, 2023 at 3:13 pm | Economic Affairs

Yuan bounces back of 5-month low after PBOC pledges of market stable

May. 22 (Agencies) — China’s yuan jumped up a five-month low against the dollar in early trade on Monday, after the central bank pledged to do its utmost to prevent large fluctuations in the local unit.Investors have refrained from aggressively testing new lows for the yuan after the central bank on Friday vowed to curb speculation and urged key participants to keep the market stable, traders said.More action might be taken to prevent yuan depreciation following the verbal warnings, they added.On Friday, major state-owned banks were seen swapping yuan for dollars in the onshore forwards market - a sign that authorities were trying to manage the rapid fall in the currency.Prior to Monday’s opening, the People’s Bank of China (PBOC) ...

May 22, 2023 at 4:58 pm | Economic Affairs

Oil down 1%, US debt caution offsets supply worries

May. 22(Agencies) — Oil prices slipped on Monday as cautions and concerns US debt ceiling in addition of demand recovery in China offset support from lower supplies from Canada and OPEC+ producers.Brent crude futures fell 73 cents, or 0.97%, to $74.85 a barrel by 0634 GMT, while US West Texas Intermediate (WTI) crude for July delivery, the more actively traded contract, slipped 73 cents, or 1.02%, to $70.96.The June WTI contract, which expires later on Monday, fell 87 cents to $70.68 a barrel. “I expect plenty of volatility in the coming days and a bounce upward in crude prices as and when a deal is reached to raise the debt ceiling,” said Vandana Hari, founder of oil market analysis provider Vanda Insights.“But crude’s headroom ...

May 22, 2023 at 4:53 pm | Economic Affairs

Oil prices falls as cautious trade ahead of US inflation data

May, 09(Agencies) — Oil prices fell on Tuesday, relinquishing some of strong gains of the previous two sessions with market stayed cautious ahead of U.S. inflation figures for April, which will be key to Federal Reserve’s next interest rate decision.Brent crude price was down 0.7%, at $76.47 and U.S. West Texas Intermediate (WTI) crude fell 50 cents, or 0.7%, to trade at $72.66 at 0650 GMT. Both contracts had settled up more than 2% in the previous trading session. “Oil prices have rebounded somewhat in the last two sessions, so now is time for a pause … with no real positive data coming out,” said Suvro Sarkar, lead energy analyst at DBS Bank. “The market is cautious today ahead of the inflation data…. With net long position...

May 9, 2023 at 2:50 pm | Economic Affairs