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FBR seizes foreign currency worth $38,500 at Peshawar Airport

May 16, 2022: Continuing with its ongoing incessant operations against currency smuggling, Pakistan Customs has seized Qatari Riyals worth USD 38,500 this afternoon at Peshawar Airport. A passenger named Imran Khan, Passport No. 1570-65304-1 resident of Dir Upper was departing for Qatar via Qatar Airlines, on May 15, 2022 (Sunday) from Bacha Khan International Airport (BKIA), Peshawar.

After giving him an opportunity to declare the currency at the Currency Declaration Desk established in the Departure Hall, his baggage was searched upon suspicion. It led to the recovery of 1,46,000 Qatari Riyals being illegally smuggled out of Pakistan. He was asked to justify legal custody of the currency. However, he failed to do so. Therefore, the currency has been withheld and the accused has been arrested by the Customs staff at BKIA for further legal proceedings under the law.

Chairman FBR/Secretary Revenue Division, Mr Asim Ahmad has commended the successful operation by the Customs team at BKIA and reiterated his unflinching resolve to fight the menace of currency smuggling across Pakistan.

It is also pertinent to mention that Chairman FBR has already issued special instructions to Customs Field Formations for stepping up vigilance at airports and land border stations to frustrate any attempts made for currency smuggling.

Press Release

Dollar starts week on strong footing on firm safe-haven...

May 16, 2022: The dollar started the week just off a 20-year high against peers on Monday, as investors sought safety due to fears about global growth while cryptocurrency markets appeared to find some stability after last week's turmoil.

The dollar index was at 104.54, having briefly crossed the 105 level on Friday, its highest since December 2002, after six successive weeks of gains.

Investors have flocked to the safe-haven currency on concerns about the U.S. Federal Reserve's ability to dampen inflation without causing a recession, along with worries about slowing growth arising from the Ukraine crisis and the economic effects of China's zero-COVID-19 policy.

"Broad USD strength is being supported by a mounting global growth concern," said Barclays analysts.

They said events to watch this week included U.S. retail and production data due Tuesday, as well as public remarks from several Fed officials.

"Focus will be on any potential reiteration/pushback on the notion that 75-basis point rate hikes are off the table for now."

Markets are pricing in 50 basis point hikes at the Fed's next two meetings, according to CME's Fed Watch tool, but with the possibility of larger increases.

Chinese retail and production data due later on Monday are also top of the agenda.

"A weaker growth outlook in China is likely to keep commodity G10 currencies under pressure and the USD supported," said Barclays.

The euro started the week languishing near its lowest level since early 2017, suffering due to the strong dollar and because of the European economy's exposure to the Ukraine conflict.

The single currency was at $1.0398 on Monday morning, only just above the $1.0354 level it hit on Thursday, its lowest since early 2017.

There are also plenty of speeches from top European Central Bank officials this week for investors to watch.

Sterling, which has suffered along with the euro, was at $1.2256 on Monday, having dropped as low as $1.2156 last week, hurt by softer than expected first-quarter GDP figures.

In the coming week, Britain has labor market data, inflation, and consumer confidence data.

The Japanese yen was a little softer on Monday morning at 129.43 yen per dollar. Last week it managed its first week of gains since early March, as growth fears meant U.S. Treasury yields paused their march higher.

With yields pinned down in Japan, the yen is vulnerable to higher U.S. yields.

Crypto markets, which trade around the clock, had a quiet weekend after turmoil last week driven by TerraUSD, a so-called stablecoin, breaking its dollar peg.

Bitcoin was trading at around $31,000 has dropped to $21,400 on Thursday, its lowest since December 2020.

Reuters

China’s April coal output leaps 11% on year

May 16, 2022: China's daily coal output in April jumped 11% from the same month a year earlier, boosted by Beijing's order to increase supply to ensure the security of the country's energy supply, but the volume dropped from a record high set in March.

The immediate outlook for demand is not strong, however.

China, the world's top coal producer, mined 362.8 million tonnes of the fuel last month, data from the National Bureau of Statistics showed on Monday, equivalent to 12.09 million tonnes per day.

That compares with the record of 12.77 million tonnes per day in March and 10.74 million tonnes per day a year before.

Production over the January-April period was 1.45 billion tonnes, also 11% higher than in the same period a year earlier, the bureau's data showed.

China is aiming at lifting daily coal output above 12.6 million tonnes and building a national inventory of 620 million tonnes to ensure it has sufficient supply.

The government has also urged regions that largely rely on imported coal to sign more contracts of at least a year's duration with domestic coal producers, to secure supply.

China's central bank said that to support more output, it had allocated an additional 100 billion yuan ($14.7 billion) of loans dedicated to coal production, storage, and purchases by power plants.

Beijing has also set price caps for thermal coal under spot trade and term contracts to ease inflation pressures and balance profits between coal miners and utilities.

However, lean demand from downstream sectors, following a wide range of industrial plant shutdowns because of COVID-19 outbreaks, could weigh on further growth of coal output.

China's April power generation plunged to a level last seen in May 2020, with thermal power output dropping 12% from a year before.

Coal inventories at utilities in eight Chinese coastal regions reached 29.66 million tonnes by May 7, 25% higher than the same period last year, data tracked by China Coal Transportation and Distribution showed.

Reuters

Gold up as U.S. bond yields weaken

May 16, 2022: Gold edged up on Monday from a more than three-month trough hit in the previous session, as lower U.S. Treasury yields kept demand for zero-yield bullion afloat above the key psychological support level of around $1,800 per ounce.

Spot gold was up 0.1% at $1,812.15 per ounce, as of 0227 GMT. U.S. gold futures gained 0.1% to $1,809.80.

"With $1,800 being such a big round number, it's natural for it to provide some level of support as some (traders) try to be brave and buy a dip, whilst others close out profitable shorts," City Index's senior market analyst Matt Simpson said.

Marking their fourth straight weekly decline, gold prices fell more than 1% on Friday to the lowest since Feb. 4 at $1,798.86 per ounce, before closing at $1,811.15.

"But it's not looking great for gold bugs right now. Even if we do see a bounce from $1,800, the momentum clearly favours a further downside," Simpson said.

The dollar started the week just off a 20-year high against peers, as investors sought safety due to fears about global growth, and continued to make rival safe-haven gold less attractive for buyers holding other currencies.

However, benchmark U.S. 10-year Treasury yields fell, buoying demand for non-interest bearing gold.

Inflation will need to move lower for "several months" before Federal Reserve officials can safely conclude it has peaked, Cleveland Fed President Loretta Mester said Friday, adding she would be ready to consider faster rates hike by the September Fed meeting if the data do not show improvement.

Although seen as an inflation hedge, bullion is sensitive to rising U.S. short-term interest rates and bond yields, which raise the opportunity cost of holding it.

Spot silver was down 0.1% at $21.06 per ounce, platinum was unchanged at $938.46, and palladium rose 0.3% to $1,949.88.

Tesla delays plan to restore Shanghai plant output to...

May 16, 2022: Tesla Inc has delayed a plan to restore production at its Shanghai plant to levels before the city's COVID-19 lockdown by at least a week, according to an internal memo seen by Reuters.

The U.S. electric car maker originally aimed to increase output at its Shanghai plant to 2,600 cars a day from May 16, Reuters reported earlier this month citing another memo.

But the latest memo said that it plans to stick to one shift for its Shanghai plant for the current week with a daily output of around 1,200 units. It also said that it would now aim to increase output to 2,600 units per day from May 23.

Tesla did not immediately respond to a request for comment.

Reuters

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