Dollar Set for Weekly Drop as Traders Trim Wagers on Rate Hikeshttps://english.aawsat.com/business/5296986-dollar-set-weekly-drop-traders-trim-wagers-rate-hikes
Dollar Set for Weekly Drop as Traders Trim Wagers on Rate Hikes
A person is counting dollars in La Paz, Bolivia, 10 July 2026. (EPA)
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Dollar Set for Weekly Drop as Traders Trim Wagers on Rate Hikes
A person is counting dollars in La Paz, Bolivia, 10 July 2026. (EPA)
The dollar held steady on Friday but was poised for a weekly decline as a tame US inflation report this week led traders to cut bets on imminent rate hikes from the Federal Reserve, although escalating attacks in the Middle East soured sentiment.
Iran and the United States exchanged intensifying fire in a week-long escalation that has largely unraveled last month's truce, spurring safe haven bids for the dollar and leading oil prices near one-month highs.
In currency markets, the euro was at $1.1437, set for a 0.2% rise in the week. Sterling fetched $1.3476, on course for a 0.56% gain in the week, its third straight week of gains on fading concerns over Britain's fiscal outlook.
The Japanese yen was fetching 162.39 per US dollar, rooted near the 40-year low of 162.84 it touched at the start of the month. Traders remained wary of official intervention from Tokyo after Japanese Finance Minister Satsuki Katayama reiterated the government's readiness to take decisive action.
The dollar index, which measures the US currency against six other units, was at 100.72, set for a weekly drop of 0.24%. The index hit a one-month low earlier this week on easing chances of a near term rate hike but safe-haven flows have helped support the greenback.
"The USD remains the highest-yielding safe-haven currency in the G10 complex," OCBC strategists said in a note.
"Near-term FX price action is likely to continue reflecting the 'USD smile' framework, under which the greenback tends to outperform when markets price either stronger US growth and higher rates or a rise in global risk aversion," they wrote.
Data on Thursday showed US retail sales rose slightly in June as lower gasoline prices weighed on receipts at service stations, but online spending surged, prompting economists to upgrade their second-quarter growth estimates.
The economy's resilience was underscored by other data also showing labor market stability. Economists believe the Federal Reserve would keep interest rates unchanged later this month after data showed consumer price inflation had cooled in June.
Karen Manna, portfolio manager for fixed income at Federated Hermes, said: "It is far too early to conclude that a renewed disinflation trend has taken hold or that inflation concerns have been fully resolved."
Policymakers are also wary of banking too heavily on one month of improvement after months when inflation moved in the wrong direction.
Chances for a Fed hike in July stood at 11%, versus a 25% implied probability last week, according to the CME FedWatch tool. Traders are pricing in 26 basis points of hikes by December.
"I don’t think July is live for rate hikes," said Tani Fukui, senior director of global economic and market strategy for MetLife Investment Management. "We expect neither rate hikes nor cuts in 2026."
In other currencies, the Australian and New Zealand dollars were poised for a third straight week of gains. The Aussie was 0.24% softer on the day at $0.6981 as risk-off sentiment prevailed. The kiwi was at $0.5838.
China's yuan weakened from a one-month high against the dollar, but remained on track for its third straight week of gains.
Markets mostly shrugged off comments from President Donald Trump after he renewed accusations that China meddled in US elections, a move that could complicate his fragile truce with Chinese leader Xi Jinping.
Investor focus next week will be on the policy decision from the European Central Bank where it is expected to hold interest rates steady, according to a Reuters poll. But a rate hike next month is increasingly likely, economists say.
Gold Heads for Biggest Weekly Loss in Six as Middle East War Fans Inflation Worrieshttps://english.aawsat.com/business/5297004-gold-heads-biggest-weekly-loss-six-middle-east-war-fans-inflation-worries
16 March 2023, Bavaria, Munich: Gold bars and coins lie on the table at the Precious metal dealership Pro Aurum. (dpa)
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Gold Heads for Biggest Weekly Loss in Six as Middle East War Fans Inflation Worries
16 March 2023, Bavaria, Munich: Gold bars and coins lie on the table at the Precious metal dealership Pro Aurum. (dpa)
Gold was on track for its biggest weekly loss in six on Friday, as escalating US-Iran clashes lifted oil prices, adding to inflationary pressures and strengthening the case for higher US interest rates.
Spot gold was up 0.8% at $4,002.39 per ounce by 0624 GMT, having touched its lowest since July 1 earlier in the day. US gold futures for August delivery gained 0.4% to $4,006.10.
The metal has lost 3% so far this week, its largest decline since June 1, with the Middle East conflict outweighing support from softer June US inflation figures released this week.
"Gold is making tentative steps higher today after the sight of the metal slipping below $4,000 attracted some bargain hunting," said Tim Waterer, chief market analyst at KCM Trade.
However, "geopolitical risks in the Middle East are still present, with inflation and yield concerns being the dominant forces holding gold back," Waterer said.
Oil prices have climbed about 12% this week as the escalating US-Iran conflict raised supply concerns.
The surge in oil prices risks reigniting inflation worries and increasing the likelihood of interest rate hikes. Non-yielding gold typically struggles in a high-interest-rate environment, as investors gravitate towards assets offering higher returns.
Dallas Federal Reserve President Lorie Logan became the first of Fed Chairman Kevin Warsh's new colleagues to call publicly for a rate hike.
Fed Vice Chair Philip Jefferson also suggested he would be open to raising rates if there is no near-term improvement in inflation.
Traders are pricing in a 73% chance of a rate hike in December, according to the CME FedWatch Tool.
Gold discounts in India widened to a one-month high this week as hopes of lower prices kept buyers on the sidelines, while premiums in China were largely steady.
Elsewhere, spot silver rose 0.6% to $55.83 per ounce, while platinum lost 1% to $1,602.02 and palladium eased 0.4% to $1,244.84. All three metals were headed for a weekly loss.
Al-Jasser to Asharq Al-Awsat: Saudi Arabia is a Vital Artery for Global Tradehttps://english.aawsat.com/business/5296993-al-jasser-asharq-al-awsat-saudi-arabia-vital-artery-global-trade
Al-Jasser to Asharq Al-Awsat: Saudi Arabia is a Vital Artery for Global Trade
One of the agreements signed at Jeddah Islamic Port. Asharq Al-Awsat
Saudi Minister of Transport and Logistics Services Saleh Al-Jasser told Asharq Al-Awsat that the recent crisis involving the Strait of Hormuz demonstrated the Kingdom's strong infrastructure and substantial investments, many of which have been implemented in partnership with the private sector.
He said the crisis also highlighted the flexibility of Saudi Arabia's logistics system and its ability to respond to changing circumstances by redirecting trade flows as needed, stressing that the Kingdom serves as a vital artery for global trade.
His remarks came during the signing of several agreements at Jeddah Islamic Port, including the launch of Bahri Logistics' bonded storage zone. The facility belongs to Bahri Logistics, a business unit of Saudi shipping firm Bahri, and was inaugurated in cooperation with the Zakat, Tax and Customs Authority and the Saudi Ports Authority (Mawani).
Al-Jasser said Saudi Arabia has been undergoing a rapid logistics transformation since Crown Prince and Prime Minister Mohammed bin Salman launched the National Transport and Logistics Strategy.
He noted that the current regional crisis provides a real opportunity to assess the progress made since the strategy's launch, adding that it has clearly demonstrated the sector's enhanced preparedness.
Al-Jasser explained that before 2023, most of Saudi Arabia's trade activity was concentrated on the Kingdom's western coast, with approximately two-thirds of trade passing through eastern ports.
However, disruptions in the Red Sea during 2023 prompted the transfer of a significant share of Saudi trade to the eastern coast. With the emergence of the latest regional crisis, trade has now been redirected back to the western coast.
He stressed that this logistical flexibility benefits not only Saudi Arabia's own trade but also that of neighboring countries, adding that reforms implemented across the sector are now beginning to produce tangible results.
Commenting on the newly established truck logistics zone, Al-Jasser said it reflects the speed of response and the integrated coordination between the transport sector, customs authorities, and the private sector.
He explained that the sharp increase in the number of ships and trucks created the need for the facility, which is designed to improve logistics efficiency, particularly as operational capacity has expanded significantly.
The new zone will streamline truck entry and exit procedures, provide a safer and more organized environment for truck drivers, improve traffic management, and reduce congestion caused by the tens of thousands of trucks entering Jeddah Islamic Port each day.
Al-Jasser also announced the signing of seven contracts for new logistics zones at the port.
Among them is the largest overseas investment by Chinese company JD Logistics, which will establish operations inside the port.
Another agreement covers a logistics project in the Al-Khumrah area south of Jeddah, while five leading Saudi companies have also signed agreements to develop additional logistics zones.
He noted that the number of logistics zones across Saudi ports has now reached 34, supported by approximately SAR15 billion in private-sector investments.
Saudi Ports Authority (Mawani) President Suliman Al-Mazroua told Asharq Al-Awsat that additional investments are expected in the Al-Khumrah area as part of a major economic zone designed to attract further investment, noting that several promising opportunities are currently under development.
Al-Mazroua said the real value of logistics hubs lies not simply in serving as cargo transit points, but in the integrated services they provide, transforming Saudi ports into value-added platforms that enhance the competitiveness of global supply chains.
He explained that shipping companies increasingly choose to call at Jeddah Islamic Port because of the value-added services offered by its logistics centers, which remain the port's primary competitive advantage.
Al-Mazroua added that Jeddah Islamic Port has evolved beyond being merely a point of arrival and departure for ships. It has become a preferred destination for international shipping companies thanks to its advanced logistics infrastructure.
Saudi Arabia now operates 34 logistics centers, including 17 located within Jeddah Islamic Port itself, underscoring the port's central role in the Kingdom's national transport and logistics network.
The newly inaugurated bonded logistics zone is Bahri's first fully integrated logistics facility of its kind. It offers a range of advanced logistics solutions that support Saudi Arabia's ambition to establish itself as a global logistics hub capable of attracting cargo, facilitating international trade, and strengthening global supply chains.
State Revenue System Shifts Saudi Arabia to Governance and Sustainabilityhttps://english.aawsat.com/business/5296973-state-revenue-system-shifts-saudi-arabia-governance-and-sustainability
State Revenue System Shifts Saudi Arabia to Governance and Sustainability
The Saudi capital, Riyadh. Reuters
Saudi Arabia's financial system has entered a new phase of structured governance following the Cabinet's approval of the updated State Revenue System during its recent session chaired by Crown Prince and Prime Minister Mohammed bin Salman.
The legislation represents a fundamental shift in the economic philosophy of public finance management, moving beyond the traditional concept of fee collection to establish an integrated framework for strategic planning and comprehensive financial governance.
The significance of the new system extends beyond its regulatory function. It serves as a safeguard for medium- and long-term fiscal sustainability by comprehensively regulating every stage of public revenue management - from initial forecasting and estimation through to final settlement.
Expanding Coverage and Governing Sovereign Revenue Flows
The updated system places all public financial inflows under a unified regulatory framework, expanding the scope of state revenues to include a comprehensive range of structural and sovereign income sources.
These encompass natural resources and national assets - the country's most significant sovereign wealth - as well as fees, taxes, financial charges, and service revenues, which constitute the primary sources of non-oil government budget financing.
The framework also introduces proceeds from privatization and public-private partnerships (PPPs) as a distinct revenue category, aligning closely with the objectives of Saudi Vision 2030, which seeks to increase private sector participation in the national economy.
In addition, the system regulates revenues generated from state-owned assets through sales and leasing activities, financing and investment returns, as well as other sources including fines, penalties, compensation payments, donations, grants, bequests, endowment (waqf) income, zakat funds, and any additional revenue channels approved by the Cabinet.
Ten-Year Revenue Forecasting
One of the system's most significant structural reforms is its long-term forecasting approach, shifting budget estimation from annual planning to a broader strategic horizon.
The Ministry of Finance is now legally authorized to forecast government revenues for periods of up to ten fiscal years, relying on data, projections, and development plans submitted by various government entities.
The framework also provides flexibility for the Ministry to periodically review and revise these forecasts whenever significant domestic or international economic or financial developments occur, improving forecasting accuracy and reducing estimation gaps in the national budget.
The system further regulates revenue collection procedures by requiring government entities to collect revenues when due, record them within the relevant fiscal year, and transfer all collected revenues to the Ministry of Finance's account at the Saudi Central Bank according to timelines established in the implementing regulations.
Government Debt Collection
The system requires government entities to notify debtors on the first working day following the debt's due date. If payment is not made within 45 working days from the notification date, legal collection procedures must begin.
The legislation also introduces flexibility in handling government debts by allowing collection to be postponed for up to one year in exceptional circumstances. It affirms that government debts enjoy priority status and are not subject to statutory limitation periods.
Rules governing debt exemptions and installment arrangements have also been established. Debts not exceeding SAR1 million may be partially or fully waived under specific conditions, including verification that the debtor is genuinely unable to pay. Debts exceeding SAR1 million require approval from the Prime Minister based on the recommendation of the Minister of Finance.
The system also allows debts of up to SAR1 million to be repaid over periods of up to five years, while larger debts - or repayment terms exceeding five years - require approval from the Minister of Finance or an authorized delegate, with installment plans not exceeding 25 years.
The Saudi Cabinet was chaired by Crown Prince and Prime Minister Mohammed bin Salman on Tuesday. SPA
From Revenue Collection to Revenue Management
Experts interviewed by Asharq Al-Awsat described the new legislation as a major transformation in government resource management, shifting the focus from simply collecting revenues to establishing an integrated system covering forecasting, planning, collection, receivables management, and oversight, thereby strengthening public finance efficiency and supporting Saudi Arabia's fiscal sustainability objectives.
Dr. Abdullah Almeer, Assistant Professor of Economics at King Fahd University of Petroleum and Minerals, said the legislation represents a transition toward a more comprehensive model of government revenue management that begins with revenue forecasting and planning, continues through collection, and concludes with debt management and performance oversight.
He explained that the updated system shifts from a model focused primarily on revenue collection to one that manages the entire government revenue cycle - from estimation and planning to collection, debt management, receivables administration, and performance monitoring.
According to Almeer, one of the most significant reforms is the move toward strategic revenue management. While the previous system emphasized identifying revenue sources and collecting outstanding debts, the updated legislation introduces medium- and long-term financial planning.
He noted that allowing government entities to forecast revenues over ten-year periods - with periodic reassessments in response to economic changes - will improve revenue forecasting accuracy, enhance medium- and long-term budget preparation, and strengthen the government's ability to manage fiscal risks.
Improving Fiscal Efficiency
Almeer added that the new system is expected to improve financial efficiency by narrowing the gap between projected and actual revenues while enabling faster collection of government receivables immediately after they become due.
He noted that government entities are now required to participate in revenue forecasting and establish specialized revenue development units where needed, increasing accountability for financial resource management and improving collection efficiency.
Regarding non-oil revenues, Almeer expects the legislation to have a positive impact because it assigns government entities direct responsibility not only for collecting revenues but also for developing them.
He emphasized that increasing non-oil revenues depends not only on introducing new fees or revenue streams, but also on improving the management of existing revenues, strengthening collection mechanisms, and enhancing receivables management.
He also pointed out that government entities must now conduct studies and analyses before proposing any new fees, financial charges, or taxes, helping strike a balance between revenue growth and economic development.
Additionally, he observed that recognizing privatization proceeds as a separate revenue source is fully aligned with privatization and public-private partnership initiatives under Saudi Vision 2030.
Clearer Responsibilities and Stronger Governance
Financial and economic consultant Dr. Hussein Al-Attas described the updated legislation as a qualitative shift from revenue collection to integrated government revenue cycle management, covering revenue estimation, recording, monitoring, collection, and the treatment of overdue accounts.
According to Al-Attas, the system clearly defines the responsibilities of government entities and standardizes procedures, reducing inconsistencies in implementation while improving collection efficiency. He expects these reforms to enhance financial planning, reduce revenue leakage, and strengthen fiscal discipline.
He also stressed that strengthening non-oil revenues depends not only on creating new income sources but also on improving the management of existing revenue streams. Better collection procedures, reduced payment delays, and more effective management of government receivables will support sustainable revenue growth.
Al-Attas added that clearly defined responsibilities among government agencies improve transparency and accountability, facilitate performance measurement, and strengthen financial governance through standardized practices for revenue estimation, collection, and receivables management.
Greater Flexibility in Managing Government Debt
Regarding government debt management, Al-Attas said the legislation strikes a balance between improving collection efficiency and considering taxpayers' circumstances by allowing structured repayment plans and installment arrangements under clearly defined rules. These measures are expected to encourage voluntary compliance while reducing defaults and disputes.
He explained that the system also provides flexibility in exceptional cases by permitting temporary deferrals of collection, as well as partial or full debt waivers under specific conditions, including verification of a debtor's ability to repay before exemption decisions are made.
Al-Attas added that the new legislation represents a modern model for government revenue management by strengthening the state's ability to collect its financial rights, reducing the accumulation of public debts, preserving economic activity, and supporting the continued growth of Saudi Arabia's non-oil economy.
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