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Saudi Arabia Launches 3rd Shipping Lane in 2020

Saudi Arabia Launches 3rd Shipping Lane in 2020
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Saudi Arabia Launches 3rd Shipping Lane in 2020

Saudi Arabia Launches 3rd Shipping Lane in 2020

Saudi Arabia announced Tuesday a strategy to develop its ports to ensure the flow of goods through supply chains.

The Saudi Ports Authority (Mawani) announced launching the third shipping lane for the coastal transportation of container ships in the Red Sea.

It was launched across Jeddah Islamic Port and King Abdullah Port (KAP) at Rabigh via the world’s largest container shipping operator, Maersk.

The shipping lane, the third launched since early 2020, ensures regular weekly trips, and is a sign that the Saudi economy remains resilient and its supply chains solid in light of the global economic situation.

It is an extension of the initiatives launched by Mawani as part of its National Industrial Development and Logistics Program (NIDLP), with the support of the Saudi logistics system and the follow-up of the Transport Minister.

The lane aims to consolidate connection between the Kingdom’s ports and other countries, attracting major international shipping companies.

It also aims to strengthen investment in the Kingdom and increasing non-oil exports.

The coastal transportation service will start and end at Jeddah Islamic Port, passing through Jordan’s Port of Aqaba, KAP, Jeddah Islamic Port and Egypt’s Port of Sokhna.

Mawani announced in May that it has started operating a new shipping line for container transportation between the Kingdom and East Asian countries, supported by the Logistics Committee and under the supervision of the Minister of Transport.

The new route will be operated through global shipping line Hyundai Merchant Marine and partly in agreement with the Alliance consisting of Hapag-Lloyd of Germany, OEN of Japan, and Yang Ming of Taiwan.

It seeks to facilitate regular trips to the port on a weekly basis serving industrial companies in Jubail and Ras al-Khair. The new route facilitates and accelerates direct import and export operations from East Asian countries and increases trade.

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Firm Dollar Keeps Pound, Euro and Yen Under Pressure

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
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Firm Dollar Keeps Pound, Euro and Yen Under Pressure

US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo
US Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration/ File Photo

The US dollar charged ahead on Thursday, underpinned by rising Treasury yields, putting the yen, sterling and euro under pressure near multi-month lows amid the shifting threat of tariffs.

The focus for markets in 2025 has been on US President-elect Donald Trump's agenda as he steps back into the White House on Jan. 20, with analysts expecting his policies to both bolster growth and add to price pressures, according to Reuters.

CNN on Wednesday reported that Trump is considering declaring a national economic emergency to provide legal justification for a series of universal tariffs on allies and adversaries. On Monday, the Washington Post said Trump was looking at more nuanced tariffs, which he later denied.

Concerns that policies introduced by the Trump administration could reignite inflation has led bond yields higher, with the yield on the benchmark 10-year US Treasury note hitting 4.73% on Wednesday, its highest since April 25. It was at 4.6709% on Thursday.

"Trump's shifting narrative on tariffs has undoubtedly had an effect on USD. It seems this capriciousness is something markets will have to adapt to over the coming four years," said Kieran Williams, head of Asia FX at InTouch Capital Markets.

The bond market selloff has left the dollar standing tall and casting a shadow on the currency market.

Among the most affected was the pound, which was headed for its biggest three-day drop in nearly two years.

Sterling slid to $1.2239 on Thursday, its weakest since November 2023, even as British government bond yields hit multi-year highs.

Ordinarily, higher gilt yields would support the pound, but not in this case.

The sell-off in UK government bond markets resumed on Thursday, with 10-year and 30-year gilt yields jumping again in early trading, as confidence in Britain's fiscal outlook deteriorates.

"Such a simultaneous sell-off in currency and bonds is rather unusual for a G10 country," said Michael Pfister, FX analyst at Commerzbank.

"It seems to be the culmination of a development that began several months ago. The new Labour government's approval ratings are at record lows just a few months after the election, and business and consumer sentiment is severely depressed."

Sterling was last down about 0.69% at $1.2282.

The euro also eased, albeit less than the pound, to $1.0302, lurking close to the two-year low it hit last week as investors remain worried the single currency may fall to the key $1 mark this year due to tariff uncertainties.

The yen hovered near the key 160 per dollar mark that led to Tokyo intervening in the market last July, after it touched a near six-month low of 158.55 on Wednesday.

Though it strengthened a bit on the day and was last at 158.15 per dollar. That all left the dollar index, which measures the US currency against six other units, up 0.15% and at 109.18, just shy of the two-year high it touched last week.

Also in the mix were the Federal Reserve minutes of its December meeting, released on Wednesday, which showed the central bank flagged new inflation concerns and officials saw a rising risk the incoming administration's plans may slow economic growth and raise unemployment.

With US markets closed on Thursday, the spotlight will be on Friday's payrolls report as investors parse through data to gauge when the Fed will next cut rates.