Dollar down against euro, sterling
NEW YORK: The dollar hit a three-and-a-half-year low against the euro and sterling on Thursday in a broad selloff as traders priced in the likelihood that the Federal Reserve will cut rates more than previously expected.
'This week it's definitely been about the Fed, the prospect of easing sooner and potentially more rate cuts,' said Eric Theoret, FX strategist at Scotiabank in Toronto.
Fed Chair Jerome Powell was interpreted as being more dovish this week in testimony to US Congress, saying that, if it were not for expectations for higher inflation as a result of the Trump administration's tariffs, the US central bank would have likely continued to cut interest rates.
He nonetheless maintained that the Fed should stand pat as it anticipates an increase in price pressures this summer.
US President Donald Trump will nominate a new Fed Chair next year who is expected to be more dovish than Powell, whose term will end in May.
Trump on Wednesday called Powell 'terrible' and said he has three or four people in mind as contenders for the top Fed job. The Wall Street Journal reported on Wednesday that Trump has toyed with the idea of selecting and announcing Powell's replacement by September or October.
Analysts say that person could operate as a shadow Fed chair, undermining Powell's influence.
Fed policymakers Christopher Waller and Michelle Bowman have also both said in the past week that the Fed should cut rates soon, as inflation continues to ease and due to rising concerns about a weakening labor market.
Data on Thursday showed that the number of Americans filing new applications for jobless benefits fell last week, though continuing claims rose to the highest level since November 2021.
Fed funds futures traders are pricing in 65 basis points of cuts by year-end, up from 46 basis points on Friday, with the first cut expected in September.
The euro was last up 0.39% at $1.1705 and reached $1.1744, the highest since September 2021. Sterling rose 0.45% at $1.3728 and got as high as $1.3764, its highest since October 2021.
The Swiss franc hit a 10-1/2-year high at 0.80 per dollar.
The dollar fell 0.61% to 144.38 Japanese yen.
Falling interest rates would reduce the interest rate advantage of the dollar versus peers. It also comes as investors worry that tariffs will slow US growth.
The Trump administration has set a July 9 deadline to negotiate deals that avoid reciprocal tariffs with trading partners.
The dollar is also under pressure as international investors reallocate away from US assets on concerns about the outlook for the economy and the US currency.
In cryptocurrencies, bitcoin fell 0.65% to $107,144.
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Express Tribune
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PSX faces profit-taking after two days of gains
Listen to article Stocks came under selling pressure at the Pakistan bourse on Thursday as the benchmark KSE-100 index gave up early gains and closed with a drop of over 700 points amid profit-taking. At the commencement of trading, the market extended its healthy momentum of the past two days, hitting intra-day high at 123,418 within the very first hour. However, profit-taking emerged soon afterwards, which gradually took the index to intra-day low of 122,142 before the end of trading. "Stocks closed under pressure amid economic uncertainty ahead of the outcome of Pakistan-US reciprocal tariff talks to avoid potential 29% tariffs on exports," said Arif Habib Corp MD Ahsan Mehanti. Uncertainty about federal cabinet's approval of the revised Finance Bill 2025, along with concerns over tax collection targets and expanded powers for taxmen, which could affect industries, fuelled the bearish close, he added. At the end of trading, the KSE-100 index settled at 122,046.46, down 715.18 points, or 0.58%. Early gains were extended up to 123,418 before the market came off highs to close 0.58% lower day-on-day at 122,046, Arif Habib Limited (AHL) wrote in its daily report. On KSE-100, 71 stocks declined and only 27 advanced, reflecting a broadly negative sentiment. Engro Holdings (+2.22%), National Foods (+8.07%) and Pakistan Petroleum (+0.79%) were the top contributors to index gains. On the other hand, Bank AL Habib (-2.84%), Lucky Cement (-1.86%) and HBL (-2.59%) were the major drags, it said. AHL pointed out that the Supreme Court granted relief to the cement sector by suspending the Lahore High Court's directive that required Punjab-based manufacturers to pay 6% of the ex-factory price in royalty on limestone. Apart from that, The Organic Meat Company (+5.64%) announced plans to export beef casings to Europe, a significant move seen by investors as a step towards diversification and growth. "Heading into last session of the week, the KSE-100 is up 1.69%," AHL said and anticipated that 120k would continue as the support level and a base for push towards 130k. Topline Securities reported that after two consecutive sessions of strong gains, the local bourse witnessed a round of profit-taking, driven by fiscal year-end considerations and short-term portfolio rebalancing. The benchmark index saw a volatile ride, climbing as high as 656 points before slipping to the low of 715 points. It settled at 122,046, reflecting a cautious investor mood as the quarter was drawing to a close. Engro Holdings, National Foods, Pakistan Petroleum and Tariq Glass Industries provided the biggest support, adding 228 points to the index. Meanwhile, Bank AL Habib, Lucky Cement, HBL, Pakistan Services and Systems Limited dragged the index down by 407 points, it said. KTrade Securities observed that the PSX showed signs of buyers' exhaustion as investors booked profits following a recent rally driven by the US-brokered ceasefire between Iran and Israel. Selling pressure was concentrated in banking, cement and technology sectors and market sentiment remained cautiously optimistic, contingent on the ceasefire's sustainability, it mentioned. JS Global analyst Mubashir Anis Naviwala, in his review, wrote that the market opened on a positive note, touching intra-day high of 123,418 early in the session. However, broad-based profit-taking set in after two strong bullish days, which dragged the index into the red. Naviwala saw a positive near-term outlook as dips may offer attractive entry opportunities. Overall trading volumes increased to 758.5 million shares compared with Wednesday's tally of 749.8 million. The value of shares traded was Rs30 billion. Shares of 473 companies were traded. Of these, 200 stocks closed higher, 237 fell and 36 remained unchanged. Pakistan International Bulk Terminal was the volume leader with trading in 37.5 million shares, losing Rs0.06 to close at Rs8.52. It was followed by WorldCall Telecom with 33.3 million shares, falling Rs0.04 to close at Rs1.45 and Pervez Ahmed Consultancy with 33 million shares, gaining Rs0.25 to close at Rs3.29. Foreign investors sold shares worth Rs967 million, the National Clearing Company reported.
Express Tribune
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SBP reserves drop by $2.7b
The central bank said in its latest weekly update on Thursday that the country's foreign exchange reserves, held by the SBP, decreased $66 million to $8.15 billion in the week ended January 5, 2024 due to debt repayments. photo: file Listen to article Pakistan's foreign exchange reserves held by the State Bank of Pakistan (SBP) fell sharply by $2.66 billion during the week ended June 20, 2025, bringing the total to $9.06 billion. "This marks the second-largest weekly decline since data was available, ie, 2011," noted Arif Habib Limited (AHL). The steepest fall on record was the $2.91 billion drop seen in March 2022. The decline was driven primarily by external debt repayments by the government of Pakistan, with a major portion attributed to the repayment of commercial loans, the State Bank said. However, the pressure on reserves is expected to ease in the coming days. During the current week, the SBP has received $3.1 billion in fresh commercial borrowing and over $500 million from multilateral sources. These inflows are expected to be reflected in reserves data for the week ending June 27, 2025, the central bank added. As of June 20, 2025, Pakistan's total liquid foreign currency reserves stood at $14.4 billion, comprising $9.06 billion held by the SBP and $5.33 billion held by commercial banks. JS Global Head of Research Waqas Ghani Kukaswadia stated that the drop in reserves is likely due to a payment rollover and the corresponding inflows should appear in next week's figures. The situation highlights the sensitivity of Pakistan's reserves to debt repayments, even as incoming inflows are expected to stabilise the outlook in the short term. Moreover, as of May 2025, Pakistan's Roshan Digital Account (RDA) gross inflows reached $10.381 billion. Of the total funds received, $1.787 billion has been repatriated by account holders while $6.648 billion has been utilised within the country. Consequently, the net liability stood at $1.947 billion, representing the portion of funds available for potential repatriation, according to AHL. Furthermore, the Pakistani rupee saw a slight uptick against the US dollar on Thursday, appreciating by 0.02% in the inter-bank market. By the end of trading, the local currency closed at 283.67, marking a modest gain of five paisa compared to Wednesday's close at 283.72. Globally, the US dollar weakened, hitting multi-year lows against both the euro and the Swiss franc. The decline was driven by growing concerns over the future independence of the US Federal Reserve. Meanwhile, gold prices in Pakistan rose, though international bullion rates saw a slight decline, influenced by reduced geopolitical tensions in the Middle East and ongoing uncertainty surrounding the US Fed's rate outlook. In the domestic market, the price of gold increased by Rs1,335 per tola, reaching Rs356,000.
Express Tribune
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Global matcha craze sparks shortages
At a minimalist Los Angeles matcha bar, powdered Japanese tea is prepared with precision, despite a global shortage driven by the bright green drink's social media stardom, reports AFP. Of the 25 types of matcha on the menu at Kettl Tea, which opened on Hollywood Boulevard this year, all but four were out of stock, the shop's founder Zach Mangan told AFP. "One of the things we struggle with is telling customers that, unfortunately, we don't have" what they want, he said. With its deep grassy aroma, intense colour and pick-me-up effects, the popularity of matcha "has grown just exponentially over the last decade, but much more so in the last two to three years," the 40-year-old explained. It is now "a cultural touchpoint in the Western world" – found everywhere from ice-cream flavour boards to Starbucks. This has caused matcha's market to nearly double over a year, Mangan said. "No matter what we try, there's just not more to buy." Thousands of miles (kilometres) away in Sayama, northwest of Tokyo, Masahiro Okutomi – the 15th generation to run his family's tea business – is overwhelmed by demand. "I had to put on our website that we are not accepting any more matcha orders," he said. Producing the powder is an intensive process: the leaves, called "tencha," are shaded for several weeks before harvest, to concentrate the taste and nutrients. They are then carefully deveined by hand, dried and finely ground in a machine. 'Long-term endeavour' "It takes years of training" to make matcha properly, Okutomi said. "It's a long-term endeavor requiring equipment, labour and investment." "I'm glad the world is taking an interest in our matcha... but in the short term, it's almost a threat – we just can't keep up," he said. The matcha boom has been fuelled by online influencers like Andie Ella, who has more than 600,000 subscribers on YouTube and started her own brand of matcha products. At the pastel-pink pop-up shop she opened in Tokyo's hip Harajuku district, dozens of fans were excitedly waiting to take a photo with the 23-year-old Frenchwoman or buy her cans of strawberry or white chocolate flavoured matcha. "Matcha is visually very appealing," Ella told AFP. To date, her matcha brand, produced in Japan's rural Mie region, has sold 133,000 cans. Launched in November 2023, it now has eight employees. "Demand has not stopped growing," she said. In 2024, matcha accounted for over half of the 8,798 tonnes of green tea exported from Japan, according to agriculture ministry data – twice as much as a decade ago. Tokyo tea shop Jugetsudo, in the touristy former fish market area of Tsukiji, is trying to control its stock levels given the escalating demand. "We don't strictly impose purchase limits, but we sometimes refuse to sell large quantities to customers suspected of reselling," said store manager Shigehito Nishikida. "In the past two or three years, the craze has intensified: customers now want to make matcha themselves, like they see on social media," he added. Tariff threat Anita Jordan, a 49-year-old Australian tourist in Japan, said her "kids are obsessed with matcha." "They sent me on a mission to find the best one," she laughed. The global matcha market is estimated to be worth billions of dollars, but it could be hit by US President Donald Trump's tariffs on Japanese products - currently 10 per cent, with a hike to 24 per cent in the cards. Shortages and tariffs mean "we do have to raise prices. We don't take it lightly," said Mangan at Kettl Tea, though it hasn't dampened demand so far. "Customers are saying: 'I want matcha before it runs out'." At Kettl Tea, matcha can be mixed with milk in a latte or enjoyed straight, hand-whisked with hot water in a ceramic bowl to better appreciate its subtle taste. It's not a cheap treat: the latter option costs at least $10 per glass, while 20 grams (0.7 ounces) of powder to make the drink at home is priced between $25 and $150. Japan's government is encouraging tea producers to farm on a larger scale to reduce costs. But that risks sacrificing quality, and "in small rural areas, it's almost impossible," grower Okutomi said. The number of tea plantations in Japan has fallen to a quarter of what it was 20 years ago, as farmers age and find it difficult to secure successors, he added. "Training a new generation takes time... It can't be improvised," Okutomi said.
