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Column: King dollar delivers hedge funds' best FX quarter since 2017 - REUTERS

JULY 11, 2022

ORLANDO, Fla., July 11 (Reuters) - Hedge funds had a torrid second quarter, but their faith in the dollar paid off spectacularly.

Industry data provider HFR's Currency Index, part of the broader Macro (Total) Index, rose 1.76% in June, the biggest monthly rise since March 2020, which brought the April-June increase up to 5.70%.

That was the best quarter since a 5.72% surge in the same period in 2017.

Or put another way, currency strategies tracked by HFR essentially just had their joint-best quarter since the index was launched in 2008. Central to that was funds' consistent and sizeable long dollar position.

HFR Currency Index - quarterly performance
Reuters Image

According to Commodity Futures Trading Commission data, hedge funds have been long of dollars against a basket of G10 currencies every week for 51 weeks. The average net long dollar position in the second quarter was worth around $15 billion.

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Thanks to a widespread belief that the Federal Reserve will raise U.S. interest rates to combat inflation more than other central banks, the dollar went on a tear in Q2.

It is now at its strongest level in 20 years against the euro and a basket of major currencies, and its 6.5% rise on an index basis in April-June was its best quarter since 2016.

The latest CFTC data showed that funds increased their net long dollar position against G10 currencies by $2 billion to $16 billion in the week through July 4, simply reversing the $2 billion reduction from the week before.

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This suggests that despite the dollar's strong gains, lofty position, and a general softening of investors' expectations for the Fed's tightening cycle, funds are confident the greenback can climb even higher.

CFTC positions - dollar & euro
Reuters Image

MUFG's Lee Hardman notes that the stronger-than-expected U.S. employment report for June on Friday and the latest public comments from Fed officials point to another 75 basis point rate hike later this month.

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"The dollar strongly regained upward momentum over the past week and we expect this to extend further in the near term," Hardman wrote in a note on Friday.

The relative weakness of the dollar's major counterparts, particularly the euro, cannot be ignored though.

CFTC funds increased their net short euro position to 16,852 contracts from 10,596 a week earlier. That is the biggest net short this year and marks the fourth week in a row funds have been net short the euro.

A short position is essentially a bet that an asset will fall in value, and a long position is a bet that it will rise. Funds are now holding a $2.16 billion bet on the euro weakening. A month ago, they had a $6.8 billion bet on it strengthening.

The flip is paying off.

The euro slumped to a 20-year low of $1.0070 last week, close to parity, on fears that the energy crisis will tip the euro zone economy into recession, and that the European Central Bank will struggle to support growth while trying to tame record inflation and rein in widening sovereign bond yield spreads.

Hardman recommends selling the euro at $1.0160, targeting a break through parity down to $0.9760 soon. It looks like a growing number of hedge funds would be on board with that.

Euro pulled towards parity
Reuters Image

(The opinions expressed here are those of the author, a columnist for Reuters.)

Heathrow Asks Airlines to Stop Selling Seats to Ease Staff Woes - BLOOMBERG

JULY 12, 2022

Bloomberg) -- London’s Heathrow airport said it would ask airlines to stop selling tickets for summer travel as the hub imposes a cap on daily passenger numbers to try to avert chaos due to staffing issues.

The UK’s biggest airport will limit daily passenger traffic to 100,000 people through Sept. 11, according to a statement Tuesday. The airport said that new recruits were not yet “up to full speed” and functions including ground handlers for baggage were “significantly under resourced.”

The airport said the latest travel forecasts show that the airport would have to handle as many as 104,000 passengers a day over the summer.


The U.S. Dollar Just Matched the Euro. Is It Time for a European Vacation? - THE ASCENT

JULY 12, 2022

Key points

  • On July 12, 2022, the U.S. dollar and the euro reached an equal value.
  • American tourists traveling abroad could benefit from more favorable exchange rates.

If you're an American who is planning a trip to Europe, you may be able to benefit from favorable exchange rates. The U.S. dollar and the euro are now equal in value for the first time in two decades. What does this mean for tourists? Since the U.S. dollar will go further in many European countries, could this be a good time to plan a vacation?

The euro continues to lose value against the U.S. dollar. In the early morning of July 12, the U.S. dollar matched the euro for the first time in years. This is big news and not typical.

Around this time last year, $1 U.S. dollar was worth around 0.84 euro. At that time, $500 would equal around 420 euros. When the U.S. dollar and the euro match, $500 equals 500 euros.

This is a big difference. The last time the currencies were equal was in late 2002.

Your money will go further

What does this mean for American tourists going to Europe? American travelers can benefit from the U.S. dollar being equal to the euro.

Your money will go further than it usually would when traveling in countries where the euro is the official currency. While the euro isn't accepted in all parts of Europe, 19 countries use this currency.

It's also easier to figure out how much something costs when currencies are close to or equal in value, eliminating the need to use a currency calculator app while traveling.

Should you plan a European vacation?

With favorable exchange rates, you may wonder if now is a good time to take a European vacation. You'll likely benefit if you already have a trip starting in the coming weeks or days.

For those who have yet to make trip plans, make sure that you consider other factors. While the exchange rate is favorable, travel as a whole costs more these days.

You'll likely be paying higher costs when buying a plane ticket, booking a hotel, or making other reservations. That means higher travel costs may cancel out the savings you get from a favorable exchange rate.

You should also consider the current state of the global economy and your own financial situation. If you have extra money in your savings account and can afford to travel internationally, taking a trip might be a good option.

But if you have minimal savings, you may want to hold off until you're in a better financial position to travel. If you start saving up now and follow a vacation budget, you can take an affordable trip in the future.

If you decide to travel to Europe, look for bargains. If you can score a cheaper flight, you could save money on the cost of your trip. Make it a point to seek out cheap travel deals.

Use a credit card with no foreign transaction fees

When traveling abroad, bring the right credit card with you.

You'll want to use a credit card with no foreign transaction fees. Cards with these fees typically charge a fee of 3% for every foreign transaction.

If you take a trip to France and spend $1,000 and use a credit card that charges a 3% foreign transaction fee, you'll be paying $30 in extra fees.

Think ahead before you depart for your next trip abroad to avoid unwanted additional fees.

Luckily, many no foreign transaction fee credit cards don't charge this fee. A lot of these cards are geared toward travelers. To earn rewards on your travel spending, check out our list of best travel credit cards.

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Summer: Emirates advises travellers on early booking - PUNCH

JULY 14, 2022

Emirates Airlines has urged intending summer holiday customers who are yet to make travel arrangements to do so at once in order to ensure that they are able to travel on their preferred dates and flights.

This comes as daily booking volumes accelerate and travel rebounds from the impact of the pandemic.

The summer holidays period, which happens to be about the busiest time for most airlines, sees Emirates preparing for its busiest period with over 550,000 customers expected to fly out from the UAE between June and July on over 2,400 weekly network-wide departures.

The airline said in a statement that it had continued to add flights and frequencies where possible as it ramped up the summer schedule. Emirates noted that it would be operating close to 80 per cent of its pre-pandemic capacity, or over one million weekly seats for this summer to serve demand.

  • The airline added that it had also introduced other technology-centric services, including self-check-in and bag drop kiosks at DXB, for a smoother and contactless airport experience.

    Emirates customers also now have the option to cut down their wait time with 25 mobile check-in ports, where they can get their boarding cards, weigh and tag their bags, and have any of their questions answered by check-in staff.

    However, from August 1, customers travelling from Dubai to London, Paris and Sydney will be able to experience the airline’s full Premium Economy experience, complete with dedicated check-in areas at DXB and luxurious seats offering unrivalled comfort, the airline further said.

    Customers returning from their holidays abroad can continue their summer experiences on the ground in Dubai with My Emirates Pass.

    Customers traveling between May 1  and September 30,  2022 can enjoy exclusive offers at over 500 locations, including restaurants, big-name retail outlets, spas and exclusive attractions across the city by simply showing their Emirates boarding pass, it noted.

  • South African Airways Sale Part of Vital Reforms, Minister Says - BLOOMBERG

    JULY 14, 2022

    (Bloomberg) -- South Africa’s minister in charge of embattled state-owned companies gave an impassioned defense of the sale of a majority stake in the national carrier for about $3 -- a deal that’s subject to a lawsuit from one of the spurned bidders.

    The privatization of South African Airways is a vital reform for the country’s battered economy, Public Enterprises Minister Pravin Gordhan, 73, said in an interview at Bloomberg’s Johannesburg office. The winning bidder -- a partnership between a domestic aviation group and private equity firm -- was the one left with the most credible financial backing and industry experience, he said. 

    The airline is an “example of a broken state-owned enterprise that has been loss making, that we have successfully re-positioned and got the private sector involved,” said Gordhan. Discussions with ratings companies suggest the move is “a classic example of reform.”

    The acquisition by the Takatso Consortium has been criticized in some quarters for the notional purchase price, lack of transparency around the sale and an ongoing government requirement to settle debts. The group is made up of Global Airways, which owns domestic airline Lift, and private-equity firm Harith General Partners.

    The backlash culminated in a law suit filed last month by Toto Investment Holdings Pty, which founder Bongani Gigaba said was unfairly excluded from the sale process. Yet the airline had been a drain on government finances for a decade, receiving numerous state bailouts before entering bankruptcy proceedings in 2019.

    The terms of the transaction have been finalized between the parties and the deal is now subject to approvals by South Africa’s competition regulator and industry body, said Gordhan, who was finance minister over two spells under former President Jacob Zuma. 

    As part of the deal, Takatso agreed to invest about 3 billion rand ($177 million) in the airline. 

    “Their commitment remains in place,” the minister said. 

    Nine Destinations

    SAA has been downsized significantly as a result of bankruptcy proceedings, with the workforce about 80% smaller. The carrier flies to nine domestic and international destinations with a fleet of six Airbus SE jets.

    About 30 interested parties were considering a move for SAA, including two “fairly big” foreign entities, Gordhan said. But when the bidding line up thinned out due to the devastating impact of coronavirus on the travel industry, only Takatso was left with the necessary financial backing and aviation experience, he said. 

    “What is concerning is that there’s still a determined effort by some quarters to disrupt this process as much as possible and to raise suspicions around what has been a very legitimate and legal process,” the minister said.

    N165 petrol pump price no longer realistic, says major marketers - THE GUARDIAN

    JULY 14, 2022

    As NPA awaits two petrol-laden ships, others at Lagos ports

    Major oil Marketers Association of Nigeria (MOMAN) has said the regulated N165 pump price for Premium Motor Spirit (PMS), also known as petrol, is no longer realistic.

    Chairman, Mr. Olumide Adeosun, made this known during a virtual consumer protection workshop for oil marketers by the Federal Competition and Consumer Protection Commission (FCCPC) yesterday.

    Adeosun, who was reacting to the lingering fuel scarcity across the country, blamed the situation on the ongoing conflict between Russia and Ukraine, which has disrupted global energy supply distribution.

    The MOMAN chairman likened the current situation to the COVID-19 pandemic era, with some countries moving to halt the exportation of petrol in favour of their own national energy securities.

    He maintained that it would be difficult to enforce any kind of price control mechanism on marketers who have to slightly adjust their prices based on how much they bought products from the depots.

    He said the way forward is phased deregulation of PMS by the Federal Government to reduce shock on consumers.

    Adeosun said gradual price deregulation should be followed with targeted palliatives in areas of transportation and agricultural subsidies to the public to ease implementation.

    He said a huge amount spent on petrol subsidy over the years would have been deployed to other critical areas that could have reduced the impact of the current energy crisis on Nigerians.

    Adeosun empathised with Nigerians and the Federal Government who have been bearing the huge subsidy cost, adding that the government is working assiduously to mitigate the effects of the situation on the economy.

    He said as the nation is moving towards full deregulation of the downstream petroleum sector, MOMAN would continue to collaborate with the FCCPC to ensure the protection of the rights of consumers.

    Earlier, Executive Vice Chairman, FCCPC, Mr. Babatunde Irukera, charged oil marketers to shun anti-competitive conduct and other acts that could shortchange consumers.

    Irukera (represented by Executive Commissioner, Operations, Mr. Adamu Abdullahi), reiterated the commission’s commitment to the protection of consumers from exploitation.

    In his presentation, Mr. Ikem Isiekwena, a lawyer and Partner at Simmons Coopers, urged MOMAN to promote efficient health, environmental, safety and quality-related industry processes, in accordance with provisions of the FCCPC Act.
    He also urged the marketers to liaise and coordinate with specific industry regulators and its members on consumer protection issues.

    ALSO, the Nigerian Ports Authority (NPA), yesterday, said two of the six ships waiting to berth at the port were carrying 149,985 metric tonnes (MT) of petrol.

    The NPA, in its daily Shipping Position, said the other four ships were carrying bulk wheat, fertiliser and container.

    It said 25 other ships laden with petroleum products, food items and others were expected to arrive at the Lagos Port Complex from July 13 to July 28.

    NPA said the ships contained general cargo, container, bulk sugar, bulk wheat, frozen fish, bulk clinker, bulk urea, bulk gypsum, bulk steam coal, petrol and bulk fertiliser.

    The organisation said 19 other ships were at the ports discharging bulk wheat, general cargo, frozen fish, soya bean, bulk sugar, container, bulk coal, butane gas and petrol.

    Air Peace begins direct flight services to China, India, Israel - THE GUARDIAN

    JULY 14, 2022

    Nigerian flag carrier, Air Peace airline, yesterday launched direct flight operations from Lagos to Guangzhou in China.

    Similar international operations will commence en route Mumbai, India, and Israel, the airline has said. The Asian routes are among a number of routes the Federal Government ceded to the airline before the outbreak of the COVID-19 pandemic.

    Spokesperson of Air Peace, Stanley Olisa, said the new operations were motivated by the airline’s commitment to seamlessly connect Nigerians to other parts of the world and deepen international socio-economic ties.

    Olisa said that the Guangzhou operation begins with once weekly flight and hopes to increase frequencies when operations gain momentum.

    He noted that China and India were not new terrains for the airline. “Air Peace has operated a number of special/evacuation flights into both cities of Guangzhou and Mumbai in the past. So, we are very familiar with the airspace. Plans to launch in Tel Aviv, Israel, are in top gear also.

    “Air Peace has an unflinching commitment to reducing the air travel burden on Africans, and we will continue to grow our route network as well as modernise our fleet strategically.

    “Air Peace has accomplished so much in just seven years of operation, as we now have a network of 20 domestic routes, seven regional routes and two international destinations, including Dubai and Johannesburg, which we launched in 2019 and 2020 respectively,” Olisa said.

    Reiterating the airline’s resolve to keep deepening its strategic network connections, in line with its no-city-left-behind mantra, Olisa hinted that the airline also has in the works two other African destinations – Malabo in Equatorial Guinea and Kinshasa in the Democratic Republic of Congo.

    It can be recalled that in March 2022, Air Peace launched its Niamey route, and a few months before then, it flagged off Douala operations from Lagos and Port Harcourt.

    The airline parades an optimal, mixed, modern fleet of over 30 aircraft, including five brand new Embraer 195-E2s, and has the largest fleet in West and Central Africa.

    IG Bans Use of Spy Number Plates Nationwide - THE GUARDIAN

    JULY 14, 2022

    BY  Kingsley Nwezeh in Abuja and Sunday Ehigiator

    The Inspector-General of Police (IG),  Usman Alkali Baba, has ordered a total ban on  use of Police Spy Vehicle Number Plates by vehicle owners across the federation without exception.

    A statement by Force Headquarters stated that the ban was  irrespective of whether the earlier issuance was authorised or not.

    It said: “All authorisations are hereby revoked indefinitely”.

    Consequently, the police chief directed Commissioners of Police (CPs) in the 36 States of the federation and the Federal Capital Territory, as well as their supervisory Assistant Inspectors General of Police (AIGs), to give full effect to the directives. 

    The IG specifically directed the AIGs and CPs to ensure that all SPY number plates currently in use were confiscated henceforth but the owners of such vehicles should not be arrested unless they are police officers or officers of other security agencies on escort duties.

    The statement signed by Force Public Relations Officer and Chief Supretendent of Police (CSP), Mr Olumuyiwa Adejobi, said the order became necessary to forestall the continuous disregard for traffic rules and regulations and other extant laws guiding road use by individuals hiding under the privileges of SPY police number plates. 

    “The IG  has, therefore, directed that police officers and officers of other security agencies attached to VIPs who use the SPY number plates should ensure prompt compliance with this directive or risk being arrested for violation of the order,” it said.

    Meanwhile, the IG has directed Commissioners of Police (CPs) in the 36 States of the Federation and the FCT as well as their supervisory Assistant Inspectors General of Police (AIGs), to give full effect to the directives as contained above. 

    The IG specifically directed the AIGs and CPs to ensure that all SPY number plates currently in use are confiscated henceforth but the owners of such vehicles should not be arrested unless they are police officers or officers of other security agencies on escort duties. 

    “The IG, however, warned that while carrying out these assignments, officers must ensure the rights and privileges of citizens are respected in line with the laws of the land and in accordance with international best practices. 

    “Other security agencies and members of the public are enjoined to cooperate with the police in this regard as the moves are aimed at strengthening our internal security,” it said.

    Allow Nigerians With Expired Passports to Return Home, Aregbesola Orders NIS - NAN

    JULY 14, 2022

    An official said Nigerians in diaspora were free to come back home with expired or non-expired Nigerian passport.

    The Minister of Interior, Rauf Aregbesola, has directed the Nigeria Immigration Service (NIS), to allow Nigerians in diaspora to return to Nigeria with their expired International Passports.

    Mr Aregbesola gave the directive on Wednesday, in Lagos, while responding to a complaint by a Nigerian-American citizen, Jamiu Kasumu, at the Alausa Passport Office during his unscheduled visit to the facility.

    He said Nigerians in diaspora were free to come back home with expired or non-expired Nigerian passport.

    The Minister said no Nigerian needed travel certificate to come back home, except children, whose parents were Nigerians, but their identity were yet to be established according to immigration rule.

    "I am using this medium to instruct all Nigeria Immigration Officers World-Wide to accord Nigerian travellers with expired Passport use such passports to return safely back home henceforth," he said.

    The Minister also advised Nigerians in diaspora to update their travel document ahead of time to avoid rush during emergency.

    Earlier, Mr Kasumu complained to the Minister that the Nigeria Immigration in America and Delta airline prevented him from coming to Nigeria because of expired Nigerian passport.

    Mr Kasumu said he was able to return to Nigeria after he got travel certificate he obtained through a relation in Nigeria.

    "I am appealing to you sir that the Immigration should allow Nigerians with expired passport to come back to their country," he said.

    Direct Flight Will Strengthen the Bond Between Nigeria and China - Air Peace - DAILY TRUST

    JULY 14, 2022

    Nigeria's biggest airline, Air Peace, on Wednesday recorded a full load factor of 240 passengers on its inaugural flight to Guangzhou, China.

    The airline operated the flight with a Boeing 777 aircraft which left the Murtala Muhammed International Airport, Lagos around 7 p.m.

    Speaking during the flag-off of the carrier's Lagos-Guangzhou flight, Chief Operating officer of Air Peace, Oluwatoyin Olajide said the airline is officially adding the continent of Asia to its network of continents, with the commencement of initial one-weekly flight to Guangzhou-China.

    She said the commencement of the direct flight from Lagos to China would strengthen the economic pact of both countries, adding that Nigerians would be available to get visas to travel to China.

    "If you look at what is happening today in Nigeria and if you look at the population of Chinese here and look at the projects Chinese are handling here, you can imagine the impact and now having a direct flight is going to strengthen the bond between the two countries and increase the revenue generated from the connections of these two countries.

    "This is something that Air Peace has finally been able to cement to make this union a huge benefit," she added.

    She airline also disclosed plans to partner Asian carriers to distribute passengers to other destinations outside Guangzhou, China.

    Olajide noted that the airline is not entirely new to the Chinese airspace as it has successfully operated several evacuation/special flights to the country at different times in the past, especially in 2020, during the COVID-19 lockdown

    She said, "So, we're going into China, not as newcomers, but as an airline that is technically and operationally acclimatised with the Chinese terrain.

    "The flying public, especially those that fly the Guangzhou route, should expect best-in-class flight experience, which is characteristic of the Air Peace brand. We're not stopping with Guangzhou- India is next and Israel is in the works," she said.

    She said the airline would soon launch Malabo in Equatorial Guinea and Kinshasa in the Democratic Republic of Congo, adding that Air Peace would continue to grow its route network as well as modernise its fleet strategically.

    She also hinted that the Consultant is now open for more people to travel to China from Nigeria, following the lift on travel restrictions put by Chinese government before now.

    "Air Peace currently boasts of a network of twenty domestic routes, seven regional routes and two international destinations, including Dubai and Johannesburg.

    "As we kick off the Guangzhou route today, we must appreciate the Nigerian Civil Aviation Authority, Federal Airports Authority of Nigeria, the Ministry of Aviation, the Chinese government, our partners, and other stakeholders for making this possible. We promise to work harmoniously with all relevant aviation actors to ensure this new route is maximised," she added.


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