The US dollar continued its decline on Wednesday as traders increased bets on the Federal Reserve cutting interest rates in the coming year, fueled by optimistic statements from officials regarding the battle against inflation. Meanwhile, equity markets showed a mixed performance after another subdued day on Wall Street, with attention turning to the central bank’s preferred gauge of prices, set to be released later in the week.
Recent indicators have suggested a softening in the US job market and a slowing economy, though not at a pace that raises significant concerns about a recession. This has led investors to shift back into risk assets, although profit-taking has restrained the latest gains in anticipation of a potential “Santa rally.”
Market data indicates that traders are now anticipating a Fed rate cut in June, with an 80 percent likelihood of such a move in May. Billionaire investor Bill Ackman has even suggested the possibility of a rate cut as early as the first quarter. The dovish comments from Fed officials, falling yields, and adjusted rate expectations have weighed on the dollar, causing it to reach its weakest level since September against the yen, near a four-month low versus the euro and sterling, and lower against various other currencies.
Fed Governor Christopher Waller expressed confidence in the current policy’s ability to slow the economy and bring inflation back to the target, signaling a positive shift. Michelle Bowman, his counterpart, supported potential rate hikes but remained conditional in her assessment. The market’s reaction to these comments has been significant, leading to a decline in the dollar’s value.
Despite the dovish turn, some analysts noted the potential challenge posed by falling yields, which may limit the effectiveness of higher Treasury yields as a substitute for further rate hikes. Equity markets struggled for direction as investors awaited the release of the personal consumption expenditures (PCE) data, the Fed’s preferred guide for inflation.
In Asian markets, Tokyo, Sydney, Seoul, Wellington, Taipei, and Jakarta saw gains, while Hong Kong, Shanghai, Seoul, and Manila experienced declines. The subdued performance on Wall Street persisted, even as reports indicated an increase in US consumer confidence and healthy sales over the recent shopping weekend.
US Advocates for Palestinian Access to Al-Aqsa
On Wednesday, the United States called on Israel to permit Muslims to worship at the Al-Aqsa mosque compound in Jerusalem during Ramadan. This plea comes in response to a proposal by a far-right minister suggesting the exclusion of Palestinians from the occupied West Bank from praying at the site.
State Department spokesman Matthew Miller addressed reporters, stating, “As it pertains to Al-Aqsa, we continue to urge Israel to facilitate access to Temple Mount for peaceful worshippers during Ramadan consistent with past practice.” The statement emphasizes the importance of maintaining historical practices that have allowed peaceful worship during the holy month of Ramadan at the Al-Aqsa mosque compound, also known as the Temple Mount.
Bangladesh Delegation Eyes WTO MC13 to Safeguard Developing Nations’ Interests
The 13th Ministerial Conference (MC13) of the World Trade Organization (WTO) is scheduled to take place from February 26 to 29, 2024, in Abu Dhabi, United Arab Emirates (UAE). Ministers from around the world will gather to assess the performance of the multilateral trading system and address the future agenda of the WTO. A delegation from Bangladesh, led by State Minister for Commerce Ahsanul Islam Titu, comprising eight members, will participate in the conference.
This edition of the ministerial conference holds particular significance for Bangladesh as the country is set to transition from a Least Developed Country (LDC) to a developing nation by 2026. Typically held every two years, the conference will focus on critical global issues, including subsidies in agriculture and fisheries, intellectual property rights, e-commerce, and global food security.
Senior Secretary of the Commerce Ministry, Tapan Kanti Ghosh, expressed Bangladesh’s commitment to safeguarding the interests of LDCs and other developing nations. While not highlighting specific issues for Bangladesh, he emphasized the country’s desire to maintain duty-free market access, intellectual property rights, and other trade facilities during the post-LDC graduation period.
Tapan highlighted Bangladesh’s advocacy for the continuation of technical facilities, such as training programs for officials and dispute settlement mechanisms, even beyond the LDC graduation. He affirmed that Bangladesh would play a robust role in these discussions. Additionally, he underscored Bangladesh’s priority on providing subsidies in the fisheries sector during the post-LDC graduation period.
Saudi Imposes Tk15 lakh Fine for Unauthorized Hajj Performances
The Ministry of Hajj and Umrah in Saudi Arabia has declared a fine of SR50,000 (equivalent to Tk15 lakh) for individuals, whether tourists or local residents, who perform Hajj without official permission. According to Gulf News, the ministry emphasized the illegality of undertaking Hajj without the necessary approvals. Additionally, hefty fines of up to Tk15 lakh will be imposed on those found transporting Hajj pilgrims without the required documents.
Furthermore, the ministry outlined severe consequences for foreigners involved in such violations, including a six-month imprisonment and subsequent deportation from Saudi Arabia. Those deported will also face a 10-year ban on reentering the country. This stringent announcement aims to ensure the proper implementation of the Hajj process and deter any potential breaches of laws and regulations.
The penalties will be enforced through collaboration between the Ministry of Hajj and Umrah and Saudi Arabia’s General Directorate of Passports.
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