Business
Dollar hovers at two-week low as rate-hike forecasts fade, emphasis on beleaguered yen
The U.S. dollar held near a two-week low on Monday as investors trimmed bets for a Federal Reserve rate hike this year, while the yen stayed locked near a 40-year low, putting investors on edge over what Tokyo would do next.
The euro bought $1.1435, close to its best level in two weeks, and the pound bought $1.3351 in latest trading. The dollar index, which measures the U.S. currency against six others, was at 100.9 early in the trading day.
The yen stood at 161.57 to the dollar, not far from a 1986 low of 162.84 set last week, with traders still concerned of probable intervention after a surprising burst of purchasing momentarily raised the currency on Thursday.
The South Korean won edged higher on the first day of its historic 24-hour onshore spot dollar-won trading. It sold for 1,534 to the dollar.
DOLLAR ON THE DEFENSIVE
The U.S. dollar suffered its largest weekly loss last week since April after the U.S. payrolls report indicated that job growth slowed abruptly in June, lowering market expectations of a rate hike from the Fed.
Still, the fall in the unemployment rate indicates a healthy labour market and should assist preserve Fed tightening expectations, OCBC strategists said.“The broader USD outlook remains constructive,” they wrote, confirming their call for a modest 2-3% rise in the dollar in the second half of 2026.
Falling oil prices have helped soothe some inflationary concerns, and investors this week will focus on the minutes of the Fed’s June meeting to help evaluate policymakers’ thinking regarding the rates forecast.
Strategists at Commonwealth Bank of Australia said the minutes might be shorter or less insightful than normal because Fed Chairman Kevin Warsh believes the central bank has offered too much direction in the past.
YEN VIGIL ON
The yen remained in the spotlight, hovering near a 40-year low as the threat of official intervention kept traders on edge, but analysts doubted any move by Tokyo would provide durable assistance.
OCBC strategists said the danger of intervention is more likely to create bouts of volatility and transitory corrections rather than a durable reversal in USD/JPY.”Without a meaningful change in underlying macro fundamentals, verbal warnings and outright intervention alone are unlikely to change the broader direction of the pair,” they concluded. The Japanese policymakers have also broken their tradition of telegraphing risks, suggesting a more targeted drive to squeeze speculators and boost the cost of betting against the yen, which investors are also worried about.Marc Chandler, chief market strategist at Bannockburn Global Forex, said, “The market understands about the risk of intervention. “We’re still seeing indications in the options market that some sizable pools of capital have bought short-dated dollar puts to hedge long dollar positions in the event of intervention,” he said.
Business
Pakistan sees 66pc drop in terrorist attacks over five weeks: Report
The security forces have conducted effective operations in Khyber Pakhtunkhwa and Balochistan which have resulted in a steep drop in the number of terrorist strikes.
The Pakistan Institute for Conflict and Security Studies (PICSS) said in a new report that terrorist assaults had fallen by about sixty-six percent in a five week period.
The report claimed attacks reduced to 21 between October 16 and 22, from 61 registered between September 18 and 24.
There was also a week-on-week drop of 38 per cent in militant attacks from October 16-22. In such attacks, the number of people injured fell from 20 in the previous week to 11 in the same period, a fall of 45 percent.
PICSS said security forces have conducted 10 operations in which 33 insurgents were killed.
The research also looked at the effect of an internal leadership struggle in Fitna al-Hindustan and changes in the propaganda approach of Fitna al-Khawarij on the militant scene.
The data show that insurgent activity has gone down throughout the review period, but security challenges continue in regions of the country.
Business
FinMin says Pakistan has sufficient oil, energy supplies until Nov
Finance Minister Muhammad Aurangzeb said that Pakistan’s crude oil and other energy supplies are satisfactory. He said the government has made sufficient provisions to cover the country’s energy needs till November and further efforts are being taken to secure supply during winter.
Aurangzeb remarked while addressing a ceremony at a private university in Lahore that Pakistan has not had an energy shortage and there were no queues at gas stations or law and order issues due to an energy crisis.
He did acknowledge, however, that more had to be done to satisfy the country’s gas and liquefied natural gas (LNG) needs.
Talking about the economic performance of the country, the finance minister said that the information technology (IT) export services of Pakistan increased from one billion dollars to 4.6 billion dollars. “We expect IT exports to reach $5.5 billion in the current fiscal year,” he continued.
Aurangzeb said foreign exchange reserves were sufficient to cover more than three months of imports and had reached a record high. He recalled that at one time the reserves had dropped to the equivalent of only two weeks’ imports.
Pakistan’s credit rating has improved three times since April last year and the administration had taken major steps to recover access to international financial markets, he said.
Pakistan carried out a private placement in April this year, tapped the international markets by the issuing of Panda bonds and issued bonds worth three billion euros in the first week of September, the minister said.
Investors from Asia, the Middle East, Europe and the United States showed interest, he said, adding that orders received from investors for Pakistan’s euro bonds were twice the amount offered.
Aurangzeb also said that international investors were reviewing Pakistan’s economic outlook after its interaction with the International Monetary Fund (IMF). The current IMF program is due to expire in October next year, he noted.
On energy supplies, the minister said Pakistan had taken adequate measures for energy procurement and supplies in spite of regional crises. Arrangements were made to meet requirements until November and preparations were in hand for the winter season.
The finance minister said the administration has opted for targeted subsidies instead of blanket subsidies so that the assistance reaches the deserving part of the community.
He said that motorbikes, three wheelers and automobiles with engines below 800cc were given targeted incentives. So far, the relief had reached around 12 million distinct beneficiaries, while an estimated 40 to 50 million people across the country had benefited altogether.
“Pakistan is continuing structural reforms along with efforts to maintain economic stability, and reforms have moved beyond the planning stage and are now being implemented,” Aurangzeb added.
Business
Gold prices drop for fifth day as global rates fall below $4,000
Gold prices in Pakistan continued to tumble on Saturday, recording a fifth straight day of losses as international bullion prices fell below the critical $4,000 per ounce threshold.
The All Sarafa Association said the continued decrease drove gold to a five-month low in both domestic and international markets.
In the local market, the price of 24-carat gold declined by Rs2,500 per tola to Rs422,036. The price of 10 grams also decreased by Rs2,144 to Rs361,686.
The current cut is the latest in a run of sustained deterioration in bullion prices with the domestic market mirroring the slide in foreign rates.
World prices
International gold prices also saw another downturn, dropping by $25 per ounce to $3,995. The move sent bullion below the psychologically important $4,000 barrier, boosting pressure on local prices.
Gold prices fell for the fifth consecutive day in global and domestic markets. The group said the latest numbers “show the scale of the recent retreat” with prices dropping to their lowest in five months.
The jewellery markets in Pakistan observe the international bullion movements closely as global price changes affect local rates, alongside currency fluctuations and other market considerations.
Silver drops
Also prices of silver also came down in domestic trade. Silver prices decreased by Rs7 per tola to Rs5,858.
The simultaneous fall in gold and silver is a reflection of the wider weakness seen across the local precious metals market.
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