2024-01-19 11:18

Copyrighted Image by: Reuters. NAIROBI - In response to the ineffectiveness of the agreement in stabilizing the Kenyan shilling, the Kenyan government has decided to end its government-to-government (G2G) oil deal with Saudi Arabia and UAE by December 2024. The International Monetary Fund (IMF) has reported that the deal failed to prevent the currency's depreciation or to correct distortions in the foreign exchange (forex) markets. The Treasury is now shifting its focus toward private sector solutions for energy procurement, moving away from the previous state-level agreement. This change in strategy comes after the Kenyan shilling experienced a significant depreciation, contrary to the expectations set when the deal was first implemented. The country has also seen a decline in import volumes, which can be attributed to reduced demand both within Kenya and in the regional markets. The IMF has emphasized the risks associated with foreign exchange market segmentation and has recommended the integration of Public Private Partnership (PPP) projects into the budgetary processes of the country. This approach is expected to help mitigate the risks that have become evident with the G2G oil deal. The Kenyan government's plan to terminate the oil agreement reflects a broader reassessment of strategies to stabilize the national currency and ensure efficient energy procurement. The move towards engaging with the private sector is seen as a step to foster more resilient economic practices and to avoid the pitfalls that were encountered with the previous arrangement. This decision supports a shift towards an energy sector guided by private enterprise, a move that is corroborated by recent IMF reports. To reduce pressure on forex markets, the government has pledged consistent dollar access for domestic fuel importers. This commitment aligns with President Ruto's declaration of a hands-off governmental role in these privately led transactions. The withdrawal from this oil purchase arrangement is driven by concerns over its economic impact and heightened financial risks for private investors supporting it. https://www.investing.com/news/commodities-news/kenyan-government-to-end-oil-deal-as-shilling-weakens-93CH-3278089

2024-01-19 10:12

Copyrighted Image by: Reuters SHANGHAI - Conflux Network has announced its plans to introduce an EVM-compatible Bitcoin Layer 2 solution, aiming to boost decentralized finance (DeFi) participation and enhance transaction efficiency. The Layer 2 platform is scheduled to roll out its testnet by March and expects the mainnet to be live in May. The upcoming solution is set to use BTC for transaction fees and will support both BRC-20 tokens and Bitcoin inscriptions, expanding the utility of the Bitcoin blockchain. Following the announcement on Thursday, the native token of Conflux Network, CFX, experienced an 8% surge in price, reaching $0.2203. Designed to operate on a secondary layer, the platform is intended to improve transaction throughput and reduce costs, while maintaining the robust security features of the Bitcoin blockchain. The Layer 2 solution will function within a Proof of Stake (PoS) consensus protocol, which is expected to foster greater interoperability across different blockchain systems. The initiative by Conflux Network is part of a growing trend to enhance scalability and user experience in the blockchain ecosystem, particularly for Bitcoin, which has traditionally faced challenges in these areas due to its Proof of Work (PoW) consensus mechanism. https://www.investing.com/news/cryptocurrency-news/conflux-network-to-launch-bitcoin-layer-2-solution-93CH-3278011

2024-01-19 09:35

Copyrighted Image by: Reuters. TOKYO - The USD/JPY currency pair soared to an eight-week high earlier today, breaking above 148.80 before settling back to around 148.35. This movement comes as financial markets keenly await the Bank of Japan's policy meeting scheduled for Tuesday. Speculation is rife that the central bank may discuss an end to its negative interest rate policy, a move that could curb the yen's recent depreciation. Investors globally are exercising caution ahead of the weekend, with potential developments in the Middle East poised to influence market dynamics. Additionally, the financial community is looking forward to the outcomes of central bank meetings set to take place next week. Key among these are the Bank of Canada and the European Central Bank, where interest rates are anticipated to hold steady. However, investors will be parsing the language of the banks' forward guidance for any indications of future interest rate trajectories. The Bank of Japan's upcoming meeting has garnered particular attention, given the yen's performance and the broader implications for currency markets. With the possibility of a shift in Japan's monetary policy, the discussions on Tuesday could signal significant changes for the yen and influence investor strategies moving forward. https://www.investing.com/news/forex-news/usdjpy-climbs-to-eightweek-high-as-markets-eye-bank-of-japan-meeting-93CH-3277966

2024-01-19 09:26

Copyrighted Image by: Reuters. HONG KONG - Venture Smart Financial Holdings Ltd. has taken a significant step in the cryptocurrency market by filing for Hong Kong's first spot Bitcoin exchange-traded fund (ETF). The company aims to attract $500 million in assets under management (AUM) by the end of 2024, aligning with the new guidelines issued by the Securities and Futures Commission (SFC) in December. The move comes as the SFC has opened the door for cryptocurrency ETFs, with three futures-based crypto ETFs already operating in Hong Kong, collectively managing $50 million in AUM. The announcement indicates a growing interest in cryptocurrency investment products in the region, with Samsung (KS:005930) Asset Management also exploring the possibility of offering a spot ETF. As of now, there have been no further updates from the regulatory body since the release of the new guidelines. https://www.investing.com/news/cryptocurrency-news/venture-smart-financial-seeks-to-launch-hong-kongs-first-spot-bitcoin-etf-93CH-3277959

2024-01-19 09:01

Copyrighted Image by: Reuters. Investing.com - The U.S. dollar edged lower in early European trading Friday, but was on track for a second consecutive weekly gain on renewed doubts over early rate cuts by the Federal Reserve, while weak retail sales hit sterling. At 04:00 ET (09:00 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 103.212, but is up over 1% so far this week. Resilient U.S. activity boosts dollar Signs of resilience in the U.S. economy has hit expectations that the U.S. central bank will start its rate-cutting cycle as early as the first quarter of this year. U.S. retail sales came in stronger than expected earlier in the week, and on Thursday data showed that the number of Americans filing new claims for unemployment benefits fell last week to the lowest level in nearly 1-1/2 years. “Markets remain attached to the prospect of a March cut, now priced with around 50%-60% probability, but we really struggle to imagine the Fed cutting in two months’ time against the current economic backdrop,” said analysts at ING, in a note. The Fed next meets at the end of this month, and “the only key data release in the U.S. before then is the fourth quarter GDP figures next week, and barring major surprises there, there is no compelling bearish story for the next week or so,” ING added. Weak U.K. retail sales hit sterling In Europe, GBP/USD fell 0.3% to 1.2670, with sterling hit after U.K. retail sales slumped 3.2% in December, the biggest drop in sales since January 2021, raising the risk that the U.K. economy entered recession late last year. This illustrates the difficult position the Bank of England finds itself in, as data released earlier this week showed that U.K. inflation unexpectedly accelerated in December, implying that the central bank will be slower to cut rates than its peers. “This means that a further repricing lower in BoE rate expectations would require markets to make a conviction call that the December CPI surprise was just a blip,” ING added. EUR/USD traded largely unchanged at 1.0874, with traders awaiting comments from European Central Bank President Christine Lagarde at Davos later in the session. Lagarde downplayed expectations for early rate cuts earlier in the week, and it seems unlikely she'll backtrack today. Yen set for hefty weekly loss In Asia, USD/JPY traded just lower at 148.11, with the yen set to lose more than 2% this week. Data on Friday showed Japanese consumer inflation fell to its lowest since June 2022 in December, setting up the Bank of Japan to largely maintain its ultra-dovish policy when it meets next week. USD/CNY traded just lower at 7.1944, with the yuan still weak after data earlier this week showed that the second largest economy in the world grew less than expected in the fourth quarter. https://www.investing.com/news/forex-news/dollar-set-for-weekly-gain-sterling-hit-by-weak-retail-sales-3277952

2024-01-19 05:56

Copyrighted Image by: Reuters. Investing.com-- Gold prices steadied on Friday, but were nursing steep declines for the week as growing doubts over early interest rate cuts by the Federal Reserve battered the yellow metal. Bullion prices had fallen sharply to a one-month low on Wednesday, but found some support around the $2,000 an ounce level amid some safe-haven demand. Gold was battered chiefly by traders pivoting into the dollar as strong economic data and hawkish-leaning comments from Fed officials saw markets further price out expectations for a March rate cut by the central bank. But the yellow metal still saw some support from safe haven demand, as a military conflict in the Middle East escalated to new avenues. While U.S. and UK forces continued to clash with the Iran-led Houthi group in the Red Sea, tensions grew between Iran and Pakistan after a series of strikes. Spot gold fell 0.1% to $2,020.91 an ounce, while gold futures expiring in February were flat at $2,022.75 an ounce by 00:35 ET (05:35 GMT). Both instruments were set to lose about 1.4% each this week. Gold sinks as traders sharply pare March rate-cut bets Pressure on gold came chiefly from receding expectations that the Fed will begin cutting rates by as soon as March 2024. The trend pointed to continued headwinds to the yellow metal from higher-for-longer interest rates, which push up the opportunity cost of investing in bullion. CME’s Fedwatch tool showed traders pricing in a 51.9% chance for a 25 basis point cut in March, down sharply from the 70.2% chance seen last week. Analysts expect traders to further curb their enthusiasm, given that stronger-than-expected retail sales data indicated continued resilience in the U.S. economy. Atlanta Fed Reserve President Ralph Bostic also joined a chorus of officials warning against bets on early rate cuts, and said he expects the bank to begin cutting rates only by the third quarter of 2024. “Fed funds futures still have more than 140bp of easing by the year-end and more than a 50% chance of a March hike, so there is still likely some unwinding of this to go before we can start thinking again about easing,” analysts at ING wrote in a note. Copper prices remain pressured by China weakness Among industrial metals, copper prices fell slightly on Friday, and were set for a muted finish to the week amid persistent concerns over top importer China. Copper futures expiring in March fell 0.3% to $3.7477 a pound. Prices of the red metal had started 2024 on a dour note, and saw fresh selling pressure this week following softer-than-expected economic growth readings from China, the world’s biggest copper importer. Weakness in China added to concerns that copper demand will soften this year, as markets also grew wary of declining global demand for electric vehicles. Upgrade your investing with our groundbreaking, AI-powered InvestingPro+ stock picks. Use coupon INVSPRO2024 to avail a limited time discount on our Pro and Pro+ subscription plans. Click here to know more, and don't forget to use the discount code when checking out! https://www.investing.com/news/commodities-news/gold-prices-set-for-steep-weekly-drop-as-traders-question-march-rate-cut-3277899