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Commodities Briefing - Category | Currencies more

Currency Trade Drops From Tokyo to New York on Fed’s Reserve

Posted on 28 July 2015 by VRS  |  Email |Print

Foreign-exchange trading declined around the world in April amid speculation the Federal Reserve will raise interest rates only gradually. Daily trading in the U.K., the largest currency market, fell 8 percent to average $2.5 trillion, down from October’s record of $2.7 trillion, according to a Monday statement from the Bank of England’s Foreign Exchange Joint Standing Committee.
In the U.S., volumes dropped about 20 percent from last October to $881 billion, the Foreign Exchange Committee, which is sponsored by the Federal Reserve Bank of New York, said on its website. “You saw monetary policy stagnation in all the major central banks at that period in time,” said Thomas Averill, a managing director in Sydney at Rochford Capital, a currency and rates risk-management company………………………………………..Full Article: Source

9.4 trillion reasons why Europe needs a weak currency

Posted on 27 July 2015 by VRS  |  Email |Print

Continued ultraloose European Central Bank monetary policy, accompanied by a weak, or indeed weaker euro, must be an essential part of a euro zone policy toolkit being deployed to tackle a broader debt management issue than just that of Greece. That has major implications for Asia’s investors and manufacturers with euro zone exposure.
The currency bloc’s latest response to Greece’s problems illustrates the broader issues in a zone where government debt totalled €9.4 trillion (HK$79.9 trillion) at the end of the first quarter of this year. Greece had a debt to gross domestic product ratio of 177.1 per cent at the end of last year, according to Eurostat, the European Union’s statistics arm………………………………………..Full Article: Source

Ghana’s Cedi is world’s best performing currency - Economist

Posted on 27 July 2015 by VRS  |  Email |Print

Last year Ghana’s currency, the cedi, was the world’s worst-performing currency. Now, in a remarkable turn-around, it’s the world’s best-performing currency. But beware. The cedi’s 26% surge this month is based on misplaced optimism about the economy, according to both Morgan Stanley and Rand Merchant Bank, a unit of Africa’s biggest lender.
The median of five analyst forecasts compiled by Bloomberg suggests it could slide all the way back to a record low by the middle of next year, posting the biggest drop of any currency after Venezuela’s bolivar on its way………………………………………..Full Article: Source

Canada’s Currency Crisis

Posted on 24 July 2015 by VRS  |  Email |Print

On July 14, Canada’s central bank cut benchmark interest rates by 25bps for the second time this year, and slashed its growth forecast for 2015. The bank now expects GDP growth to be 1.1% Y/Y this year, down from its 1.9% forecast in April.
That could prove to be optimistic because first quarter growth slumped -0.6% Q/Q, and weak economic data in April sets up the distinct possibility of a technical recession. Why is that a problem? Over the last 50 years, Canada has not had two consecutive quarters of negative GDP growth without a recession in the US………………………………………..Full Article: Source

Venezuela’s currency is tanking so fast ‘everything is an obstacle’ for mothers

Posted on 24 July 2015 by VRS  |  Email |Print

Currency controls and flailing local production have fueled worsening scarcities that are now a blight of daily life for many Venezuelans — especially those expecting a child.
The shortages are compounded in places like Maracaibo, a western city near Colombia. Many here offset inflation and a depreciating currency by selling price-controlled goods across the border or on the local black market, leaving less on shelves………………………………………..Full Article: Source

Dollar Edges Higher on Rate Hopes

Posted on 23 July 2015 by VRS  |  Email |Print

The dollar firmed against a basket of currencies as investors continued to bet the U.S. currency will appreciate further once the Federal Reserve raises borrowing costs. On Wednesday, The Wall Street Journal Dollar Index, which compares the dollar with a basket of 16 widely traded currencies, rose 0.2% to 88.34, roughly 1.1% away from the 12-year high it reached on March 13.
Light trading on little U.S. data continued to hold the dollar to tight trading ranges against peers, said Fabian Eliasson, head of U.S. currency sales at Mizuho Bank. Investors are wagering that stronger U.S. economic data will move the Fed to raise interest rates from near zero before the end of the year, and possibly as early as September………………………………………..Full Article: Source

Commodity currencies: Who’s the ugliest of them all?

Posted on 22 July 2015 by VRS  |  Email |Print

The dollars of New Zealand, Australia and Canada are among the worst-performing major currencies this year and all face further losses, but the land of Hobbits may offer the best short.
Known as the Kiwi, Aussie, and Loonie, respectively, all three have tumbled to six-year lows in recent sessions, with year-to-date losses of 10-15 percent. “Despite the fact that they have already fallen a long way, we expect them to weaken further,” said Capital Economists in a recent note………………………………………..Full Article: Source

Oil-Sensitive Currencies Hit by Commodity Slump

Posted on 22 July 2015 by VRS  |  Email |Print

Tumbling oil prices are weakening the currencies of major oil-exporting countries for the second time in a year. Currencies in Norway, Canada, Russia and Nigeria have fallen sharply against the U.S. dollar this month on oil-price declines, after having already stumbled late last year.
In the past month, oil has slipped as a result of a strong U.S. dollar, slow global growth—especially in China—and a supply glut. “The market is awash with oil so it’s really hard to see oil prices rising any time soon,” said Piotr Matys, a strategist at Rabobank………………………………………..Full Article: Source

Ruble Volatility Drops on Bets Authorities Managing Currency

Posted on 22 July 2015 by VRS  |  Email |Print

The ruble’s volatility declined for the sixth day, reaching the level last seen before the Bank of Russia declared the currency free-floating in October, as investors bet the central bank is managing the exchange rate.
Price swings are stabilizing after the country’s monetary authorities effectively switched to a “dirty float” mechanism to keep the ruble in a “comfortable” range of 55-60 per dollar, Yury Tulinov, the head of research at PAO Rosbank, said. The currency strengthened 0.3 percent to 56.8570 per dollar by 5:52 p.m. in Moscow, extending the biggest advance among peers this year………………………………………..Full Article: Source

Latin American Currencies Hurt

Posted on 21 July 2015 by VRS  |  Email |Print

The prospect of higher U.S. interest rates and the decline in global commodities prices are proving to be a lethal combination for Latin American currencies, sending them to multiyear lows against the dollar.
Mexico’s peso was at an all-time low of 16.012 per dollar in late New York trading Monday, Colombia’s peso and the Brazilian real were at their weakest in more than a decade. The Peruvian sol and Chilean peso are taking hits from lower metals prices………………………………………..Full Article: Source

China’s currency Renminbi to become fourth most-used currency

Posted on 21 July 2015 by VRS  |  Email |Print

China’s currency Renminbi (RMB) has become the world’s second trade-finance currency after the dollar, and hopes to become the fourth most-used international currency replacing Japanese Yen, according to a report by a Chinese University.
RMB is now the world’s second trade-finance currency, fifth payment currency, and sixth foreign-exchange currency, said a report by Renmin University of China. Hopefully, it will become the world’s fourth international currency, replacing Japanese Yen, state-run People’s Daily reported citing the report. Chen Yulu, president of the university, said during the 2015 International Monetary Forum that RII (RMB Internationalisation Index) has raised from 0.02 in 2009 to 2.47 in 2014………………………………………..Full Article: Source

Euro currency is fatally flawed and its endgame has already started

Posted on 20 July 2015 by VRS  |  Email |Print

After act of self-preservation with Greece bailout that leaves the country facing years of austerity, it’s only a matter of time before the next disaster. The euro has been badly holed beneath the waterline in recent years thanks to the Greek crisis.
Euro zone policymakers might have temporarily plugged the leak with the latest Greek bailout package, but it is no more than rearranging deckchairs on the Titanic. The single currency has been fatally damaged and it risks sinking without trace over the future. Europe came very close to catastrophe last week as the talks between Greece and its creditors for a new bailout deal almost collapsed………………………………………..Full Article: Source

The euro – the ‘New’ Coke of currencies?

Posted on 20 July 2015 by VRS  |  Email |Print

The eurozone should have learned from Coca-Cola’s mistake - if it aint broken, don’t fix it. And when it’s broken, get out of the fix, as quick as you can. The date 23 April 1985 was a momentous day in the life of the Coca-Cola corporation. For years, the company had been planning a new drink to see off the challenge from Pepsi. There was no expense spared for Project Kansas.
“New” Coke (as it was dubbed) bombed. The company responded with alacrity. It didn’t say consumers were wrong. It didn’t say that given time New Coke would be a success. It didn’t plough on simply because it had invested heavily in Project Kansas. Instead, it recognised that there was only one option: to go back to the traditional formula. This returned to the shelves on 11 July 1985, within three months of “New” Coke’s launch………………………………………..Full Article: Source

Gold falls as precious metals hit by stronger dollar

Posted on 17 July 2015 by VRS  |  Email |Print

Gold has fallen to an eight-month low as precious metals struggle in the face of a strengthening US dollar. As bullion declined to $1,142.9 a troy ounce on Thursday, platinum — used in jewellery and catalysts in diesel cars — hit a six-year low, while palladium touched levels last seen in late 2012.
Analysts say the weakness for gold is being driven by expectations of a US central bank interest rate increase, bolstering the dollar, while weak physical demand in China, the world’s largest consumer, has also hurt sentiment. Traditionally a haven investment, gold has also failed to react to uncertainty in Greece or the slump in China’s stock markets in the past month………………………………………..Full Article: Source

Bad news for Canada’s currency is good news for many

Posted on 17 July 2015 by VRS  |  Email |Print

Canadians’ overseas spending power has taken a hit, but the plunge in the Canadian dollar after the central bank cut interest rates on Wednesday to try to revive a sputtering economy is being cheered by a wide array of businesses.
The tourism sector, along with export-oriented manufacturers and resource companies were among those applauding the Canadian dollar’s six-year low on Thursday after the Bank of Canada’s 25-basis-point rate cut to 0.5 percent, which was triggered largely by last year’s collapse in the price of oil, a major Canadian export………………………………………..Full Article: Source

Currency-trading boost helps Icap

Posted on 16 July 2015 by VRS  |  Email |Print

The end of a dull spell in currencies is helping broker Icap, but the company is still holding out for more clarity on the path of US interest rates. In a trading statement covering April to June released on Wednesday, the London-based broker said its average daily volumes in currencies trading, through its EBS system, were up by 34 per cent to $98bn.
That’s still far behind EBS’s heyday, but still marks a recovery from historic lows. Non-deliverable currencies forwards and the offshore-traded renminbi showed particularly strong growth, it said………………………………………..Full Article: Source

Commodity currencies plunge, Wall St flat

Posted on 16 July 2015 by VRS  |  Email |Print

Australian and New Zealand currencies fell sharply on Federal Reserve chair Janet Yellen’s determination to lift US rates this year and a decision by the Bank of Canada to cut rates in a bid to bolster the country’s flagging commodity-based economy.
Policy divergences between the Fed and other global central banks is seen as putting downward pressure on the currencies of commodity-producing nations. The Aussie is trading at US73.78¢, compared with Wednesday’s local close of US74.72¢. The currency has had a tough 12 months; it was trading above US93¢ in July 2014………………………………………..Full Article: Source

Currency Trading Shifts to Multi-Dealer Systems, Greenwich Says

Posted on 15 July 2015 by VRS  |  Email |Print

Currency investors are increasingly using electronic systems connected to multiple dealers as the market comes under greater scrutiny by regulators, according to Greenwich Associates.
Institutional investors and large corporations executed 49 percent of their foreign-exchange trading volumes on multi-dealer platforms last year, up from 45 percent in 2013 and 38 percent in 2008, the Stamford, Connecticut-based consultant said in a report. The increase comes as trading by traditional methods, such as phone, instant messaging and single-dealer platforms, has fallen………………………………………..Full Article: Source

Britons in foreign currency dash

Posted on 15 July 2015 by VRS  |  Email |Print

Britons are expected to exchange more than £267 million in travel money collectively today as demand for foreign currency peaks among people gearing up for their summer holidays. Britons are expected to exchange more than £267 million in travel money collectively today as demand for foreign currency peaks among people gearing up for their summer holidays.
Foreign exchange provider Travelex predicts that today will be the busiest day of the year across the industry for people exchanging travel money, including both “walk ins” and online orders………………………………………..Full Article: Source

East Africa Fights Currency Rout With Aggressive Rate Action

Posted on 14 July 2015 by VRS  |  Email |Print

East African central banks are having little success in stemming a rout in their currencies despite taking ever-more aggressive monetary policy action. The Bank of Uganda raised its benchmark interest rate by 150 basis points at an unscheduled meeting on Monday, the third increase this year.
That follows the decision by the Central Bank of Kenya to raise its key rate by a total of 300 basis points in two consecutive meetings. Uganda, Kenya and Tanzania are among the worst hit currencies in Africa this year as heightened risk aversion prompts investors to move money out of emerging markets………………………………………..Full Article: Source

All you wanted to know about currency devaluation

Posted on 14 July 2015 by VRS  |  Email |Print

There’s no light at the end of the tunnel yet on Greece’s debt problem. With the referendum over, the issue is back to square one — How will Greece repay its mountain of debt? One opinion is that Greece must exit the Euro, adopt its earlier currency — drachma and ‘devalue’ itself out of trouble.
What is it? Devaluation refers to the act of a country voluntarily reducing the value of its currency vis-à-vis a basket of other international currencies. Therefore, if the rupee were to devalue, it would get cheaper against the dollar, pound sterling or the euro. If Greece returns to the drachma, the currency would have to be devalued by as much as 40-45 per cent against the Euro………………………………………..Full Article: Source

Why BRICS trade in local currency doesn’t work for India

Posted on 13 July 2015 by VRS  |  Email |Print

The BRICS countries are keen to start using their local currencies for mutual settlements. At the seventh BRICS Summit in Ufa, Russia, there were suggestions from the host that almost 50 per cent of intra-BRICS trading could be invoiced in yuan, the leading currency in the group.
The idea has been discussed at BRICS Summits for at least four years now. It is definitely a great political statement, particularly at a time when the Bretton Woods institutions — International Monetary Fund (IMF, or just the ‘Fund’) and International Bank for Reconstruction and Development (World Bank, or just the ‘Bank’) — have failed to react to the increasingly louder voices of developing countries in a rapidly changing global economic order. ……………………………………….Full Article: Source

Earnings hit ahead if commodities fail to recover

Posted on 10 July 2015 by VRS  |  Email |Print

The widespread rout in ­commodity prices threatens to slash BHP Billiton’s earnings if there is no rebound, according to new research. Investment bank UBS says earnings this year at the ­nation’s biggest company will come in 30 per cent below the bank’s original forecast if commodity prices stay at current levels.
Iron ore suffered its biggest one-day price fall on record overnight Wednesday, plunging a head-spinning 10.1 per cent to $US44.59 a tonne. The key steelmaking ingredient — Australia’s biggest export earner — is at its lowest price since the daily spot price began being tracked in mid-2009………………………………………..Full Article: Source

Bulgarian leva, Turkish lira are gaining currency in Greece

Posted on 10 July 2015 by VRS  |  Email |Print

Many Greek businesses are accepting the Bulgarian leva and Turkish lira as tourism plummets and capital controls limit businesses’ access to euros, the Financial Times reported Thursday. Acceptance of neighbors’ currencies has become common, especially in the retail and tourism industry.
Last-minute bookings have fallen between 30% and 40% compared with the same period last year, according to Greece’s tourism confederation. “There is nothing bad in accepting Bulgarian leva because it is stable and pegged to the euro so why not accept to do business with it? It is legal. There is no reason not to accept,” said supermarket owner Athanasos Kritsinis, according to the FT. ……………………………………….Full Article: Source

Greece currency swap faces rocky road

Posted on 10 July 2015 by VRS  |  Email |Print

As the stand-off between Greece and its international creditors approaches its likely end on Sunday, eurozone officials are openly discussing the possibility that Greece may leave the monetary union and introduce a new currency.
However, even if “Grexit” were to occur, economists warn the transition would not be a clear-cut process. Given the technical challenges involved in setting up a new tender, Greece could face a period where a new parallel currency — under the form of IOUs — circulates alongside the euro………………………………………..Full Article: Source

Look out: Currency hedging is on the loose in ETF world

Posted on 09 July 2015 by VRS  |  Email |Print

That stampeding sound you hear is coming from fund managers scurrying to get into the currency-hedging trade. In recent weeks firms have brought more than a dozen new offerings in that category to the exchange-traded fund universe. ETFs looking to hedge exposure to currency issues across Europe, South America and Asia have blossomed as investor money pours into the strategy.
As is often the case on Wall Street, the natural worry is whether the rush might come too late. Foreign exchange dynamics present earlier this year have abated somewhat, making the need to protect against currency movements less urgent for the moment………………………………………..Full Article: Source

Euro, drachma, bitcoin? Greece’s currency options

Posted on 09 July 2015 by VRS  |  Email |Print

European leaders have given Greece until the weekend to reach an aid-for-reforms deal with its creditors or risk bankruptcy and banking collapse. Here, we outline the currency options available to Greece if it leaves the single currency.
Keep the euro - Greece could unilaterally “adopt” the euro, even if it left the euro zone. This option would see it join countries like Monaco, Andorra, San Marino and Vatican City which all use the euro as their national currency, despite not being euro zone member states………………………………………..Full Article: Source

BRICS to switch to national currency settlement soon - VTB head

Posted on 09 July 2015 by VRS  |  Email |Print

BRICS countries will definitely start using their local currencies for mutual settlements quite soon, the head of Russia’s VTB bank Andrey Kostin told RT Wednesday at the BRICS summit in Ufa.
“We definitely see a growing interest from the countries to make settlements in local currencies,” the CEO of Russia’s second biggest bank said. 40-50 percent of all the mutual settlements among the BRICS countries can be performed in domestic currencies, Kostin estimated, RIA reported………………………………………..Full Article: Source

IOU-currency would put Greece in line to quit euro

Posted on 08 July 2015 by VRS  |  Email |Print

The thinning oxygen supply to Greek banks could leave Athens with little choice but to introduce a form of second currency, European officials believe, a temporary means of freezing its membership of the bloc but one that risks its ultimate exit. The idea of putting Greece’s euro membership on hold - a temporary ‘Grexit’ - was recently raised by Germany’s finance minister Wolfgang Schaeuble.
Greeks say they have no intention of leaving the currency zone, temporarily or otherwise. But a suggestion by Yannis Varoufakis, who quit on Monday as Greece’s finance minister, that Athens might issue IOUs like the state of California did during a budget impasse in 2009, could amount to the same thing………………………………………..Full Article: Source

Citibank Is Working On Its Own Digital Currency, Citicoin

Posted on 08 July 2015 by VRS  |  Email |Print

In a move that should be of no surprise to anyone familiar with the space, Citibank has admitted to running a test platform for digital currencies and is pondering its own solution, CitiCoin.
According to the International Business Times, Citigroup has built its own digital currency based on bitcoin and the blockchain. This, in itself, isn’t very difficult – anyone can create a cryptocurrency in a few seconds with a bit of programming knowledge. But the fact that Citibank, at least in its R&D arm, is looking into the technology is promising………………………………………..Full Article: Source

Fail: Gold can’t even rally on a currency crisis

Posted on 07 July 2015 by VRS  |  Email |Print

Gold, the world’s oldest currency and the most basic store of wealth, used to be where the world turned when times got rough. But after a Greek referendum that put the future of the euro in question and an equity bear market in China, bullion has barely budged.
Gold futures was little changed through midday Monday after jumping immediately after the Greek “no” vote in overnight trading. Gold is now down almost 2 percent for 2015 and virtually unchanged over the last one month amid these financial shocks. In the past, when a country got ready to abandon a currency, gold typically would fill that void………………………………………..Full Article: Source

Markets prepare for new Greek currency as Grexit prospect grows

Posted on 07 July 2015 by VRS  |  Email |Print

For months “Grexit” has been a regular topic for speculation among foreign currency specialists. But the working assumption has been that all parties in Greece’s drawn-out saga would find a way of resolving their differences and keep the country in the eurozone.
That is no longer the case following the resounding “No” vote in the Greek referendum. As the financial markets digested the referendum outcome, foreign exchange strategists began to factor in the increased probability, instead of mere possibility, of Grexit. Barclays described that outcome as a “now high probability”, while JP Morgan said Grexit “appears more likely than not”………………………………………..Full Article: Source

Malaysia currency hits 16-year low amid political crisis

Posted on 07 July 2015 by VRS  |  Email |Print

Malaysia’s ringgit hit a 16-year low on Monday (Jul 6) on growing political uncertainty following allegations that a probe into a state investment fund found hundreds of millions of dollars were transferred into the prime minister’s personal accounts. The currency dropped 0.8 percent to 3.8088 against the greenback in Kuala Lumpur, the lowest level since May 1999.
The currency was fixed at 3.8 to the US dollar in 1998 during the Asian financial crisis after it slumped 35 percent the previous year. The peg was dropped in 2005. Malaysian stocks were also down 1.3 percent, in line with regional markets that have been roiled by the Greek debt negotiation saga………………………………………..Full Article: Source

Greek Economic Crisis: Is A ‘Parallel’ Currency The Answer?

Posted on 06 July 2015 by VRS  |  Email |Print

With Greek banks reported to be preparing contingency plans for a potential ‘bail-in’ of depositors as fears grow that Greece is heading for an economic collapse, some urgent measures now need to be found. Could then a parallel currency provide an answer and be an alternative for Greece?
The latest bail-in development, which apparently calls for a haircut of 30% on bank deposits over €8,000 (c.US$8,880), comes just after the International Monetary Fund (IMF) warned last week that the country required a massive further €60 billion (c.US$66bn) in funds to stabilize the economy over the next three years until the end of 2018………………………………………..Full Article: Source

Egypt’s currency drops to new low against the dollar

Posted on 06 July 2015 by VRS  |  Email |Print

The Egyptian pound has fallen to a new low against the U.S. dollar, the second such drop in days, the country’s central bank said Sunday, in a move that could help boost much-needed foreign investment.
The central bank set a cutoff rate of 7.73 Egyptian pounds per dollar in an auction that sold $39.6 million on Sunday, compared to a previous low of 7.63 on Thursday. Before that, the pound had held at 7.53 since February. The new rate was the lowest level since the Egyptian government introduced an auction system in December 2012 aimed at regulating the pound’s devaluation………………………………………..Full Article: Source

Brazil probes currency market activity of 15 global banks

Posted on 03 July 2015 by VRS  |  Email |Print

Fifteen of the world’s largest banks are under investigation on suspicion of rigging the Brazilian currency, antitrust watchdog Cade said on Thursday, the first such probe in one of the busiest foreign exchange markets globally.
In a document, Cade alleged that the banks colluded to influence benchmark currency rates in Brazil by aligning positions and pushing transactions in a way that deterred competitors from the market between 2007 and 2013, at least. Foreign exchange trading in Brazil is estimated at about $3 trillion a year, excluding swaps and derivative transactions………………………………………..Full Article: Source

Switzerland’s Currency Conundrum

Posted on 03 July 2015 by VRS  |  Email |Print

One topic currently dominates Swiss financial circles: Having abandoned its efforts to prevent the franc from appreciating beyond 1.20 to the euro, what does the Swiss central bank have left in its toolbox to prevent an economy-crushing drift toward parity for its currency?
The big worry in the financial community is that the franc is a one-way bet in the direction that will trash the country’s exports. The Greek drama in the euro zone, combined with the global currency war among countries seeking to devalue their way to greater prosperity, amplifies the Swiss currency’s haven status………………………………………..Full Article: Source

How About a Global Currency?

Posted on 02 July 2015 by VRS  |  Email |Print

It’s almost a truism to say that membership in the euro exacerbated the Greek crisis. The thinking goes like this: Because Greece doesn’t have its own currency, it couldn’t increase its competitiveness and boost growth through devaluation. Although devaluation is a valuable instrument, I think most countries and companies would benefit if the world, not just Europe, used a single currency.
Today’s fragmented financial world is unfair. On the one hand, there’s Denmark with such a glut of currency, local and foreign, that its central bank’s key deposit rate is minus 0.75 percent and companies are considering overpaying their taxes because the Tax Ministry pays 1 percent interest on the excess………………………………………..Full Article: Source

Bitcoin’s price surges as Greeks rush to buy in

Posted on 02 July 2015 by VRS  |  Email |Print

Greeks have rushed to Bitcoin as the country’s financial future hangs in the balance. The digital currency has risen seven per cent since Friday and, at £262, is at its highest level since March. Interestingly, gold – which has long been relied on as a store of wealth during crises – has actually fallen in value. The precious metal is priced 1 per cent lower than on Friday, at $1,168 a troy ounce.
Bitcoin exchanges are reporting increased interest from Greek investors, and with people desperate to store their cash outside the country’s nearly-empty banks, the digital currency may seem like a viable alternative………………………………………..Full Article: Source

Would Grexit spell disaster for Europe’s single currency?

Posted on 02 July 2015 by VRS  |  Email |Print

The prospect of Greece leaving the euro has sent shock waves, not just through Greece, but also the eurozone. Greeks can look to the examples of Argentina and Iceland to see what experience may await them after default and devaluation. But the fate of the eurozone is more complex and uncertain.
With Greece making up less than 2% of the eurozone’s gross domestic product (GDP), its exit might not have much of an immediate impact. Most economists expect the European Central Bank (ECB) would step in to support bond prices against market speculation targeting the weaker euro members………………………………………..Full Article: Source

China targets counterweight in gold trade with yuan fix

Posted on 01 July 2015 by VRS  |  Email |Print

A decade after China kicked off a series of gold market reforms, plans to establish a yuan price fix mark one of Beijing’s biggest step so far to capitalise on the country’s position as the world’s top producer and a leading consumer.
While no immediate threat to the gold pricing dominance of London and New York, the benchmark could ultimately give Asia more power over bullion trade, particularly if the yuan becomes fully convertible, industry sources say. The yuan fix is due to launch by the end of 2015 via the Shanghai Gold Exchange (SGE), which last year allowed foreign players to trade gold using offshore yuan………………………………………..Full Article: Source

With Greek Uncertainty, Investors Seek Safety in Gold and Bitcoin

Posted on 01 July 2015 by VRS  |  Email |Print

As Greece descends into financial crisis, its citizens and investors globally are turning to hedges old and new. European demand for the age-old safe haven of gold coins has risen in recent weeks, as has the relatively new concept of investments in digital bitcoins, market participants say.
As the situation in Europe grows more precarious, the price of both have risen in recent weeks as concerns have grown about the threat to banks in Greece and the risk that turmoil could spread to other countries in the eurozone and elsewhere………………………………………..Full Article: Source

How do you change a currency – fast?

Posted on 01 July 2015 by VRS  |  Email |Print

With Grexit looming for Greece, how would the country bring a new currency into circulation as quickly as possible? The drachma was the world’s oldest existing currency before it was replaced by the euro on January 1, 2001. And it may be about to make a comeback. This Sunday’s referendum is described by European leaders as a vote for or against the euro. If Greece votes “oxi”, the country may soon be looking for a new currency.
Haris Theoharis, a politician in the centrist party To Potami, said: “There’s already a team within the prime minister’s office, with staff from the general accounting office, right now working on the drachma.”……………………………………….Full Article: Source

Greece’s Five Possible Future Currency Arrangements

Posted on 01 July 2015 by VRS  |  Email |Print

Greece is poised between remaining a member of the eurozone or leaving it. In fact, there are five possible future currency arrangements for Greece. Here they are: Greece stays in the eurozone: This is the option likely to cause the smallest short-term disruption to the Greek economy. The Greek central bank would retain access to liquidity from the European Central Bank, and the Greek banks would stay on life support.
This looks increasingly likely to be accompanied by some kind of further negotiated debt relief. To get it, Greece would almost certainly have to agree to more conditions of the sort successive Greek governments have found it hard to accept. Greece keeps the euro, but sits outside the eurozone: Jacob Funk Kierkegaard of the Peterson Institute for International Economics in Washington calls this the “Montenegro option” and argues this is the most likely outcome should Greece exit the eurozone………………………………………..Full Article: Source

Euro currency calm counters Greece fears

Posted on 30 June 2015 by VRS  |  Email |Print

Queues at cash machines, emergency bank holidays, introduction of capital controls and a hastily convened referendum — a cocktail of events that would normally be guaranteed to induce market heatstroke. And yet the way the euro reacted to these seemingly seismic events in Greece on Monday suggested the market was displaying a rare outbreak of cool maturity.
True, the start of the Asian trading session saw the euro drop 1.5 per cent against the dollar and much more against the yen. But when the European markets awoke, the euro was repairing much of those losses and that trend extended into the New York trading day, surprising plenty who had expected a lot more volatility from a market renowned for explosive reactions………………………………………..Full Article: Source

Swiss Sell Francs to Stabilize Currency After Greek Flare-Up

Posted on 30 June 2015 by VRS  |  Email |Print

Swiss National Bank President Thomas Jordan said the central bank intervened to stabilize the franc, which surged after Greek Prime Minister Alexis Tsipras called a referendum on bailout terms. “Yesterday and overnight there was an increased demand for francs,” Jordan told a conference of Swiss executives in Bern on Monday. “The euro was under selling pressure and the SNB intervened in the market.”
Tsipras’s decision to call what is effectively a public vote on Greece’s euro-area membership is also a blow for Switzerland, where the currency’s appreciation is pushing the economy toward a recession………………………………………..Full Article: Source

Currency brokers tighten trading rules on Greek fears

Posted on 29 June 2015 by VRS  |  Email |Print

Online currency trading platforms braced on Sunday for extreme market moves due to events around Greece, imposing higher margins on much trading of the euro and in some cases preventing traders taking up new speculative positions. Retail platforms FXPro, Mayzus, Alpari and U.S.-based FXCM were among those tweaking the terms of trade in a market that in theory trades all day every day but should only see volumes rise when Asian investors and traders return to their desks on Sunday evening.
“Depending on the severity of market conditions come Sunday night/Monday morning, we reserve the right to limit EUR trading to the closing of existing positions only,” FXPro said in a statement on its website on Saturday evening………………………………………..Full Article: Source

If Greece leaves the euro

Posted on 29 June 2015 by VRS  |  Email |Print

What happens once a country leaves the euro? On financial markets a new currency first needs a new currency code that can be identified by computers for trading and payments. They are issued by the Swiss-based International Standards Organisation, a worldwide federation of national standards.
It provides an alphabetic three-character code, with the first two letters representing the country and the third the name of the currency. In Greece’s case it could not go back to its old code for drachma, GRD, because there are still some outstanding payments to be made. It would require a new code, most likely GRN………………………………………..Full Article: Source

Price War Rages in Currency-Hedged ETFs; ProShares Fires Salvo

Posted on 26 June 2015 by VRS  |  Email |Print

A price war is raging in the white-hot market for currency-hedged exchange-traded funds. ProShares, an ETF company best known for fast-moving leveraged products, unveiled its iterations of currency-hedged European and Japanese stock ETFs on Thursday. They appear boast lowest management fees on the market. So far.
The ProShares Hedged FTSE Europe ETF (HGEU) sports an 0.27% in annual expenses, while the ProShares Hedged FTSE Japan ETF (HGJP) cost s 0.23%. ProShares reckons that the asset-weighted average expense ratio for currency-hedged European stock ETFs was 0.56%; it’s 0.48% for currency-hedged Japan ETFs was 0.48%………………………………………..Full Article: Source

India’s RBI extends deadline to exchange pre-2005 currency notes

Posted on 26 June 2015 by VRS  |  Email |Print

Reserve Bank of India on Thursday extended the deadline for exchanging pre-2005 currency notes of various denominations, including of Rs 500 and Rs 1,000, by six months till December 31, 2015. The earlier deadline was expiring on June 30. “The Reserve Bank of India has extended the date for the public to exchange their pre-2005 banknotes till December 31, 2015,” it said in a press release.
RBI had, in December 2014, set the last date for public to exchange these notes as June end. It is easy to identify pre-2005 notes. The currency notes issued before 2005 do not have the year of printing on the reverse side. In notes issued post 2005, the year of printing is visible at the bottom on the reverse………………………………………..Full Article: Source

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