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New U.S. Currency Oversight May Still Leave Manipulators At Large

Posted on 06 May 2016 by VRS  |  Email |Print

The U.S. Treasury Department’s latest currency report is supposed to ratchet up pressure on trade partners whose exchange-rate policies are giving exporters a leg up on American firms.
But the administration’s new metrics for calling out currency offenders still leave countries enough latitude to avoid triggering censure by Washington. Under the Treasury’s new guidelines, a country has to meet three criteria to start an official sanctions process. Its trade surplus with the U.S. has to be larger than $20 billion………………………………………..Full Article: Source

Yuan eases further after China devalues its currency to weakest in a month

Posted on 06 May 2016 by VRS  |  Email |Print

The yuan eased for a third session against the US dollar in Shanghai on Thursday morning, after the People’s Bank of China (PBOC) set the currency’s guidance rate at its weakest level since late March.
The PBOC lowered the yuan’s reference rate for a second straight day to 6.5128 per US dollar, softer by 185 pips from the previous fixing. On Wednesday, the central bank cut the fixing by most in more than eight months. The onshore rate softened by 0.13 per cent to 6.5029 per US dollar as of 11am, the weakest level since the end of March………………………………………..Full Article: Source

Dollar Declines Mean Go-Go Days for Commodities ETFs

Posted on 05 May 2016 by VRS  |  Email |Print

The inverse relationship between the U.S. dollar and commodities is on full display this year for exchange traded fund (ETF) investors. For example, the PowerShares DB U.S. Dollar Index Bullish Fund, which tracks the price movement of the U.S. dollar against a basket of currencies, including the euro, Japanese yen, British pound, Canadian dollar, Swedish krona and Swiss franc, is off nearly 6%.
On the other hand, the PowerShares DB Commodity Index Tracking Fund is higher by almost the exact same amount by which UUP is down. Supporting the commodities outlook, the China, the world’s top consumer of metals, grains and energy, is seeing its economy stabilize………………………………………..Full Article: Source

World’s Top Currency Trader Sees Dollar Judgment Day With Jobs

Posted on 05 May 2016 by VRS  |  Email |Print

A day of reckoning looms for the dollar, according to Citigroup Inc., the biggest trader in the $5.3 trillion-a-day currency market. The greenback gained a second day Wednesday, paring a recent selloff that saw the currency touch a one-year low.
Traders are girding for a payrolls report that may dictate whether the Federal Reserve raises interest rates in June, according to Steven Englander, Citigroup’s global head of Group-of-10 currency strategy. A private report showed U.S. employers added fewer workers last month than forecast, muddying the outlook for benchmark borrowing costs………………………………………..Full Article: Source

Jim Rickards says for gold prices will go higher as dollar weaken

Posted on 04 May 2016 by VRS  |  Email |Print

Gold prices, fresh from Monday’s 15-month high, look set for further gains as the dollar weakens, according to author and gold markets expert Jim Rickards. Spot gold hit $1,303.6 an ounce on Monday, its highest price since January 2015, and has since come off to trade around $1,295 an ounce on Tuesday morning in Asia.
But Rickards, who is the author of “The New Case for Gold,” published last month, as well as 2011 best-seller “Currency Wars: The Making of the Next Global Crisis,” said gold was “going to go a lot higher.”……………………………………….Full Article: Source

Is the rand a commodity currency?

Posted on 04 May 2016 by VRS  |  Email |Print

It is probably fair to say that the exchange rate of the rand, specifically against the US dollar, is the economic indicator that attracts the most interest among South Africans almost every day. Changes in the exchange rate tend to be simplistically ascribed to purely domestic factors, including political events.
The real world of foreign exchange, of course, looks rather different, with currencies continuously buffeted by a panoply of forces from across the globe, some of which some are of a short-term, passing nature, while others are more fundamental in nature and exert their influence over a long period of time………………………………………..Full Article: Source

Colombia’s Peso Leads Latin America Currency Tumble as Oil Falls

Posted on 04 May 2016 by VRS  |  Email |Print

Colombia’s peso posted the biggest drop in emerging markets as Latin American currencies tumbled amid a selloff in oil and riskier assets. The peso weakened 2.7 percent to 2,913.73 per dollar in Bogota trading, its first drop in six days after gaining to the highest since November.
A Bloomberg index of Latin American currencies, which reached a five-month high last week, sank the most since February as Mexico’s peso slid 2.1 percent and Brazil’s real lost 1.8 percent. Latin American currencies have rallied this year as oil surged 18 percent and sentiment toward emerging markets improved amid optimism that global growth will accelerate………………………………………..Full Article: Source

Gold Crosses $1,300 Threshold as Rates Outlook Undermines Dollar

Posted on 03 May 2016 by VRS  |  Email |Print

After three years of being scorned, gold’s making a powerful comeback. Prices have pushed above $1,300 an ounce on speculation that the U.S. central bank will be slow to tighten policy further, bolstering the metal’s appeal as the dollar sagged.
Bullion for immediate delivery traded at $1,291.90 an ounce at 8:51 a.m. in Singapore from $1,291.55 on Monday, when it rose to $1,303.82, according to Bloomberg generic pricing. The metal has gained 22 percent this year, rising to the highest since January 2015, as a gauge of the dollar lost 6.3 percent………………………………………..Full Article: Source

The US just dropped the hammer on currency manipulation

Posted on 03 May 2016 by VRS  |  Email |Print

The U.S. government is sending a message to countries it believes are manipulating their currencies: We’re watching you. A Treasury report targets five countries in particular: China, Japan, Korea, Taiwan and Germany.
Each meets at least two of the three criteria that “determine whether an economy may be pursuing foreign exchange policies that could give it an unfair competitive advantage against the United States.” At a time when currency devaluation has become a major tool used by multiple countries to stimulate growth, the U.S. is looking to protect its own interests………………………………………..Full Article: Source

Japan’s currency melt-up a warning for the RBA

Posted on 03 May 2016 by VRS  |  Email |Print

The yen’s mammoth move over recent days is a clear warning to the RBA: this is what happens when a central bank disappoints financial markets by withholding monetary stimulus.
Last Thursday the yen surged by more than 3 per cent – it’s biggest daily move since 2010 – and continued to climb on Friday to reach its strongest level in more than 18 months. It reversed course partially on Monday, with one US dollar buying 106.6 yen………………………………………..Full Article: Source

Aso Says Japan Will Take Action With Currency If Needed

Posted on 02 May 2016 by VRS  |  Email |Print

The recent jump in the yen is clearly a one-sided speculative move that is extremely concerning and Japan is ready to take action if needed, Japanese Finance Minister Taro Aso said on Saturday.
“A 5-yen move in two days is clearly a one-sided speculative move and is extremely concerning,” Aso told reporters at Haneda Airport late Saturday, according to a transcript obtained by Bloomberg. “So that these speculative moves don’t continue, we will watch foreign exchange market moves with a sense of vigilance, and will act if necessary.”……………………………………….Full Article: Source

Taiwan: Central bank denies currency intervention

Posted on 02 May 2016 by VRS  |  Email |Print

The central bank said that the figures stated in a US Treasury report regarding Taiwanese exports did not match those released by the Ministry of Finance. The central bank yesterday said that Taiwan did not carry out one-sided currency intervention as the US has claimed.
The nation’s monetary policymaker released a statement after the US Department of the Treasury submitted a report on foreign exchange policies of major trading partners to the US Congress on Friday, which put Taiwan, China, South Korea, Japan and Germany on a watch list for an “enhanced analysis” of the nations’ practices………………………………………..Full Article: Source

Maybe Currency Flash Crashes Don’t Matter

Posted on 29 April 2016 by VRS  |  Email |Print

The world’s biggest financial market may be destined for a flash-crash future.This sounds scary because the foreign-exchange market is crucial, determining the real-time worth of every nation’s currency. But violent moves there may not matter as much as they do in other markets, such as those for equities.
Rachel Evans of Bloomberg News wrote an article on Thursday highlighting how the $5 trillion-a-day currency market is undergoing a significant transformation. Trading has been slowing, perhaps because of a lack of investor conviction in the face of central bank intervention………………………………………..Full Article: Source

The currency correlations that matter

Posted on 29 April 2016 by VRS  |  Email |Print

Yen’s surge contributes to tremors across asset classes from commodities to S&P futures. This week provided further evidence of how sharp currency moves can have an impact on the broader market.
The Japanese yen’s surge early on Thursday whacked the exporter-sensitive Nikkei 225. Because the USD/JPY is seen by many a proxy of global risk appetite, the exchange rate’s plunge contributed to tremors across asset classes from commodities to S&P futures………………………………………..Full Article: Source

The Real Currency War

Posted on 29 April 2016 by VRS  |  Email |Print

Disagreement came to the global financial system when the control over reserve currency became a matter of privilege rather than responsibility. That struggle has since become a morass of monetary expansion and conflict as states have pursued their own, often incompatible currency goals.
The battle of the currencies has left widespread financial instability in its wake, weakening the state-centric currency model that ruled the monetary order for the past century. Now, a different type of money — digital currency — is making a play to become the new standard. If successful, the politics of money could radically change, and with it, the power of states themselves………………………………………..Full Article: Source

Why China Wants Yuan-Denominated Gold

Posted on 28 April 2016 by VRS  |  Email |Print

It’s crucial to understand the potential benefits for China of having yuan-denominated gold. Besides internationalization, the fix may also increase the liquidity and efficiency of the gold markets. Yuan-denominated gold may also reduce the dependency of gold on the US dollar, though this may not hold true in the short run. In the longer run, gold may untangle from the US dollar.
According to the World Gold Council, in 2015, China’s gold demand hit 984.5 tons. The initiation of the yuan benchmark for gold is aimed at increasing the usage of the yuan as a global currency………………………………………..Full Article: Source

Sweden Declares Truce in Currency War

Posted on 28 April 2016 by VRS  |  Email |Print

Sweden’s central bank is calling a truce in the currency war. As policy makers in Stockholm last week announced they would reduce the pace of their quantitative easing program in the second half of this year, they also signaled they are now willing to accept a stronger krona.
And traders took them at their word. The trade-weighted KIX index this week broke through a level that just as recently as December triggered warnings of a currency intervention………………………………………..Full Article: Source

Investors Put Their Chips on the Yen

Posted on 28 April 2016 by VRS  |  Email |Print

As Japan’s central bank again ponders steps to rouse the country’s sluggish economy, an array of market forces is betting against it. Asset managers are trimming bets the yen will weaken against the U.S. dollar and increasingly betting it will strengthen instead.
That has supported a steady increase in yen buying that is the opposite of what the Bank of Japan had expected to happen through its monetary easing. Speculative buyers, including some hedge funds, have also been piling on bets since early this year that the yen would appreciate………………………………………..Full Article: Source

Why negative rates are meaningless to currency traders

Posted on 27 April 2016 by VRS  |  Email |Print

Economic theory suggests low interest rates should decrease the value of a country’s currency — but one veteran strategist told CNBC that central banks’ adoption of negative rates was “meaningless” for the foreign exchange markets.
Several major central banks have introduced negative rates in a bid to stimulate the economy and persuade businesses and households to spend and invest rather than save. Notably, the European Central Bank now has a deposit rate of -0.4 percent, while the Bank of Japan has a deposit rate of -0.1 percent for some reserves………………………………………..Full Article: Source

Dollar stirs in currency jungle ready for a sustained run

Posted on 27 April 2016 by VRS  |  Email |Print

The Fed has the ability to reignite the dollar rally, but few expect them to use it this week. Something is stirring in the currency jungle, and those who know its terrain best wonder whether it’s the mighty beast — the dollar.
After weeks of lying low after a sustained period of weakness, rumblings of its familiar growl are starting to be heard, distant though the sound may be. The index that measures the dollar against a basket of its major peers picked up last week, while 10-year Treasury yields are also rising………………………………………..Full Article: Source

African Tale of Two Currencies Puts Euro on Top

Posted on 26 April 2016 by VRS  |  Email |Print

The success of Jean-Louis Menudier’s business in Ivory Coast is tied to the European Central Bank but for Funsho Peters in Nigeria, the U.S. Federal Reserve is key. At the moment, it is Mr. Menudier who is doing best from the ties.
Many African countries are affected by the monetary policy of central banks thousands of miles away because their currencies are pegged to either the euro or the dollar. Economists believe that the Fed will raise rates and the ECB will continue to cut its, in moves that could boost the dollar and hit the euro respectively. Many African businesses are waiting to see what the central banks will do this year………………………………………..Full Article: Source

It’s Déjà vu Again for the European Currency Markets

Posted on 26 April 2016 by VRS  |  Email |Print

It’s Deja vu all over again, with Eurozone spreads widening amid difficult talks over Greece, stock markets under pressure and the euro stubbornly high despite a dovish ECB and a weak economy. So far Draghi’s latest easing package clearly hasn’t had the desired effect and the sharp rise in Portuguese yields amid the flaring up of fresh Grexit fears has highlighted that the Eurozone still remains vulnerable to speculative attacks.
What the last year has also shown, however, that heightened activism from the ECB is not the answer, and for now, a calm approach and focus on implementing that which has already been announced, may be the best Draghi can do to stabilize markets………………………………………..Full Article: Source

China needs a Plan B for its currency

Posted on 25 April 2016 by VRS  |  Email |Print

As Chinese policymakers attempt to address what ails their country’s economy, they are pursuing two goals that will almost certainly turn out to be incompatible. Very seldom have central banks been able to maintain a fixed exchange rate over an extended period of time while providing liquidity to troubled banks and an ailing economy.
Indeed, the task becomes especially difficult as the monetary stringency needed to prop up the currency intensifies strains on domestic banks and the real economy. Those looking for a rough outline of the Chinese economy’s future would be wise to revisit what happened in Thailand in 1997, when the collapse of the baht precipitated the Asian financial crisis………………………………………..Full Article: Source

Zambia’s currency boosted after ‘prayer’ but risks still linger

Posted on 25 April 2016 by VRS  |  Email |Print

Who says there’s no such thing as miracles from Heaven? Six months ago, Zambia appealed to a higher power to intervene in lifting its flailing currency, the kwacha. Now, the unit has seen a head-spinning reversal of its fortunes, becoming one of the world’s best performing currencies.
Over the last six weeks, the kwacha has become the top performing frontier currency, soaring by nearly 23 percent, according to data from Rhombus Advisors, an emerging markets advisory firm. Whether divine intervention is the proximate cause, the kwacha’s recovery has surprised some of even the most jaded observers of the fast-moving foreign exchange market, which sees $5.3 trillion in average daily turnover………………………………………..Full Article: Source

Currency Hedged ETFs Offer a Smoother Long-Term Ride

Posted on 22 April 2016 by VRS  |  Email |Print

When investing in overseas markets, investors should consider a currency-hedged international stock exchange traded fund to help diminish volatility associated with foreign exchange risks.
“Since 1978, currencies have increased volatility 91% of the time over five-year rolling periods, contributing 2.7% more volatility on average each year,” Robert Bush, ETF Strategist at Deutsche Asset Management, said on the recent webcast, Currency - Hedging Matters: Simple ETF Strategies………………………………………..Full Article: Source

Currency Manipulation, American Style

Posted on 22 April 2016 by VRS  |  Email |Print

I realize I’m tiptoeing on the slippery slope of political incorrectness here, but I must have my 2 cents worth on the monumental goings on with our currency. It’s a classic case of a solution in search of a problem. First, it was announced that a woman would be replacing Alexander Hamilton on the $10 bill (actually the $10 note).
Alexander Hamilton was the first and greatest Secretary of the Treasury ever, and I wondered whom he had offended in the current administration so long after his untimely death. But what got me even more was that he was not to be replaced by a particular woman, but by a woman to be determined later. Maybe a first draft choice………………………………………..Full Article: Source

Egypt’s currency is plunging to new lows

Posted on 22 April 2016 by VRS  |  Email |Print

Egypt’s currency fell to new lows on the black market this week, with traders selling it on Thursday from between 11 and 11.15 Egyptian pounds to the dollar amid speculation it will be officially devalued further.
Newspaper headlines said it had fallen to a level as weak as 11.50 against the dollar the previous day, while some exchange bureaus put it closer to the official level of 8.88. The Associated Press noted the 11 to 11.15 range at three different currency traders………………………………………..Full Article: Source

Commodity currencies pull back from highs as crude oil surge stalls

Posted on 21 April 2016 by VRS  |  Email |Print

Commodity-linked currencies like the Australian and Canadian dollars pulled back from recent peaks on Wednesday as a rally in crude oil prices stalled after a oil workers’ strike in Kuwait ended.
The Aussie was down 0.3 per cent at $0.7791. It had climbed on Tuesday to $0.7827, a high not seen since June, as global risk appetite had improved thanks to an earlier sharp bounce in crude oil and equities, with US stocks coming within reach of a record high. The US Federal Reserve’s caution over raising interest rates, coupled with ultra-loose monetary policies in Japan and Europe, has boosted the appeal of the higher-yielding Aussie this year………………………………………..Full Article: Source

Currency war is over, give growth a chance

Posted on 21 April 2016 by VRS  |  Email |Print

European equity markets stuttered initially on the news of the European Central Bank’s (ECB’s) latest stimulus programme but once digested, the measures were given a firm thumps-up.
While ECB president Mario Draghi took the headlines for announcing the central bank would expand its bond purchases to investment-grade corporate debt, the underlying stability of the euro over the past 12 months or so remains the greatest tailwind for the region and its economic growth prospects………………………………………..Full Article: Source

Norway’s currency stronger than projected -central bank governor

Posted on 21 April 2016 by VRS  |  Email |Print

Norway’s crown currency is now stronger than the central bank predicted in its latest monetary policy report, which was released in March, Governor Oeystein Olsen told Reuters on Wednesday.
“The crown has been a little bit stronger than we had predicted,” Olsen said on the sidelines of a conference. “It’s not a dramatic development, one must be prepared for currency swings,” he added………………………………………..Full Article: Source

Commodity currencies rise, yen slips as oil tries to stabilise

Posted on 20 April 2016 by VRS  |  Email |Print

Commodity currencies rose on Tuesday with the Australian dollar hitting a 10-month high, while the yen edged lower after oil prices appeared to stabilise from a sharp slide, underpinning risk sentiment. The Australian dollar touched a high of $0.7784 at one point, its best level since last June. It last stood at $0.7773, up 0.3 per cent from late US levels on Monday.
The Aussie and other commodity currencies benefited from oil’s bounce off lows touched on Monday, when they came under pressure after major oil producing countries failed to agree on an output freeze on Sunday………………………………………..Full Article: Source

Money making: A brief history of currency from the British Museum

Posted on 20 April 2016 by VRS  |  Email |Print

Banknotes are changing - with the look and feel of the cash in our pockets going through significant changes in the coming years. The Bank of England’s first plastic banknote will enter circulation in September, when the new £5 note featuring Sir Winston Churchill is issued.
A plastic £10 note will be issued in 2017 and the £20 plastic note will be in circulation by 2020, the Bank says. They will eventually replace cotton paper notes, which have been used for more than 100 years………………………………………..Full Article: Source

Commodity Currencies Rise

Posted on 19 April 2016 by VRS  |  Email |Print

Failure by oil producers to reach production deal had triggered selloffs in currencies of commodity exporters. The currencies of several commodity-exporting nations rose Monday even though oil producers failed to reach an agreement on curbing output over the weekend.
The dollar was recently down 0.2% against the Canadian dollar at C$1.28 after being up as much as 1.3% earlier in the day. The Australian dollar rose 0.3% to $0.7745. On Sunday, oil producers that supply almost half the world’s crude met to negotiate a production freeze intended to strengthen prices………………………………………..Full Article: Source

Meet the Norwegian Currency’s Oil Buffer

Posted on 19 April 2016 by VRS  |  Email |Print

Norway’s sovereign wealth fund has shielded the krone from the steeper falls suffered by the Russian ruble. When oil price gyrations hit currencies, it’s good to have a cushion to soften the blows. Norway has a big cushion, a 7.5 trillion kroner ($906 billion) sovereign fund.
After this Sunday’s summit in Doha failed to secure an agreement among oil-producers to curb crude supply, the oil price fell and the currencies of the big crude exporters fell with it. When crude later rebounded, these currencies followed suit………………………………………..Full Article: Source

Commodity currencies hit hard, yen rallies after Doha disappoints

Posted on 18 April 2016 by VRS  |  Email |Print

Commodity currencies slumped early on Monday while the safe-haven yen soared after global oil producers failed to agree on an output freeze, sending oil prices tumbling anew. The Canadian dollar and its Australian counterpart were both marked more than 1 percent lower to as low as C$1.2957 per USD CAD=D4 and $0.7594 AUD=D4 in early trade.
The loonie last stood at C$1.2952 per USD, while the Aussie was at $0.7663, both down about 1 percent. A deal to freeze oil production by OPEC and non-OPEC producers fell apart on Sunday after Saudi Arabia demanded that Iran join in despite calls on Riyadh to save the agreement and help prop up crude prices………………………………………..Full Article: Source

No Basis for Further Currency Depreciation: China Central Bank

Posted on 18 April 2016 by VRS  |  Email |Print

China’s central bank has said there is no basis for “further depreciation” of its currency but asserted that it would continue to pursue market-based exchange rate reform.
“There is no basis for persistent RMB depreciation. China will continue to pursue market-based exchange rate reform and maintain the RMB exchange rate basically stable at a reasonable and equilibrium level,” Xiaochuan Zhou, Governor People’s Bank of China, said in his address to the International Monetary Financial Committee………………………………………..Full Article: Source

The day the renminbi becomes a truly ‘normal’ currency isn’t so far off now

Posted on 18 April 2016 by VRS  |  Email |Print

The renminbi is approaching its final frontier: full convertibility and transformation into a “normal” currency used by companies and individuals worldwide in the same way the US dollar is today.
The renminbi’s journey as a trade and investment currency over the past decade has been rapid and remarkable – and with reforms and international usage continuing to grow apace, full convertibility is now in sight. Just last December, China began publishing a new index measuring the renminbi’s performance against a basket of trade-weighted currencies, highlighting that it was no longer “pegged” to the dollar………………………………………..Full Article: Source

China, weaker dollar behind copper price rise

Posted on 15 April 2016 by VRS  |  Email |Print

A combination of positive signals on the Chinese economy and the fall in the dollar explain rising copper prices over recent days, the head of the Chilean Copper Commission said Thursday. Copper prices have risen almost 4% this week to around $2.19/lb.
Speaking in Santiago, Sergio Hernandez, executive vice-president of the commission, or Cochilco, said a key factor were most positive numbers on the performance of the Chinese economy, which consumes approximately half of the world’s copper………………………………………..Full Article: Source

Brexit marks pound as currency to avoid

Posted on 15 April 2016 by VRS  |  Email |Print

The market’s version of the naughty step was a crowded place at the start of the year. Areas behaving badly and causing investors no end of worry included the oil price, China, the US economy and Brexit fears.
Three months on, Brexit has been abandoned by its fellow troublemakers, now that their behaviour has improved of late. China jitters and volatile oil may yet return to keep it company, but for now the second quarter looks like being all about the UK referendum on EU membership………………………………………..Full Article: Source

Currencies Across Asia Fall Sharply Against U.S. Dollar

Posted on 15 April 2016 by VRS  |  Email |Print

Yuan’s depreciation is largest since January; Singapore central bank eases policy to spur growth. Currencies across Asia including the Chinese yuan dropped sharply against the U.S. dollar Thursday, with markets caught off-guard as the Singapore central bank restrained the appreciation of its currency to stoke growth.
The yuan saw its biggest one-day depreciation since January, and the Singapore dollar fell by the most within a day this year. Meanwhile, the South Korean won weakened after the ruling party lost its parliamentary majority………………………………………..Full Article: Source

Nigeria agrees currency swap with China to shore up naira, help fund deficit

Posted on 14 April 2016 by VRS  |  Email |Print

Nigeria on Tuesday agreed a currency swap deal with China, officials said, as it looks for ways to shore up its ailing currency and fund a record budget deficit, possibly by issuing yuan-denominated bonds in China.
The West African nation is facing its worst economic crisis in decades as sinking oil prices eat into its foreign reserves and the naira weakens against other currencies. Nigeria has been for months looking for sources to help plug a projected 2016 deficit of 2.2 trillion naira ($11.1 billion) as President Muhammadu Buhari plans to triple capital spending………………………………………..Full Article: Source

Commodity Currencies Lifted By Strengthening Oil and Ore

Posted on 13 April 2016 by VRS  |  Email |Print

Signs of strength in commodities are lifting currencies from Australia to Canada. Crude oil futures rose 2.2% on Tuesday morning, pushing further above $40 per barrel. Iron ore jumped 4.6% to $59.22 per dry metric ton, based on ore fines with 62% iron, according to Metal Bulletin.
“Oil in general continues to be a key driver of broader financial markets,” said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange. “With crude above $40 a barrel, we’re seeing that playing out in firmer commodity currencies.”……………………………………….Full Article: Source

US on wrong track on Chinese currency

Posted on 13 April 2016 by VRS  |  Email |Print

Donald Trump is his usual bombastic self in accusing China of being a currency manipulator, blaming it for destroying millions of American jobs and promising to dramatically increase tariffs on Chinese imports.
Despite Trump’s trademark economic paranoia, the US presidential candidate is not alone in voicing suspicion about just what China is doing with the renminbi, particularly given China doesn’t have a free floating exchange rate or a fully open capital account………………………………………..Full Article: Source

Currency crash adds to Syrians’ woes

Posted on 13 April 2016 by VRS  |  Email |Print

An unprecedented plummet in the Syrian pound’s value against foreign currencies is contributing to skyrocketing food prices and compounding Syrians’ already-dire economic situation as the war here enters its fifth year.
The pound’s exchange rate against the US dollar exceeded 500 in early April. Markets in the Syrian opposition-controlled areas in Aleppo have been plagued with a semi-recession due to the rising prices of food and other commodities, the declining local currency and weak purchasing power. This comes amid a lack of job opportunities and low revenues………………………………………..Full Article: Source

Did the G20 agree a currency accord and does it matter?

Posted on 13 April 2016 by VRS  |  Email |Print

The first question is whether there was a lovely new, but secret, currency accord agreed at the G20 in Shanghai in February. The answer is: Probably not. Here’s SocGen with what is a consensus opinion, with our emphasis:
Central bank behaviour is often cited as evidence that the answer is yes; the PBoC has stemmed the RMB slide against the USD and while the ECB cut rates in March, the signal was that deposit rates would go no lower………………………………………..Full Article: Source

Currency-Hedged Funds—Safer or Riskier Thanks to Derivatives?

Posted on 12 April 2016 by VRS  |  Email |Print

A government proposal meant to limit the use of risky derivatives could hamper an increasingly popular breed of mutual funds that hedge against currency risks. Individual investors in recent years have flocked to mutual funds and exchange-traded funds that try to minimize the impact of currency moves on their investments in foreign assets.
Now, rules being considered by the Securities and Exchange Commission to limit mutual funds’ use of derivatives broadly could make it harder, or more expensive, for the currency-hedging funds to hedge their risk………………………………………..Full Article: Source

Mr. Yen Says Japan’s Currency May Rise Beyond 100 by Year-End

Posted on 12 April 2016 by VRS  |  Email |Print

After correctly predicting the yen’s advance beyond 115 and then 110 per dollar, Eisuke Sakakibara now says Japan’s currency may strengthen to 100 by year-end. The former Finance Ministry official in charge of currency intervention in Japan, who was dubbed Mr. Yen for his ability to influence the exchange rate in the 1990s, said it may advance to 105 in the next few months.
The yen has surprised analysts this year, surging from around 120 per dollar to reach 107.63 Monday, the strongest since before the central bank expanded its quantitative easing program in October 2014………………………………………..Full Article: Source

G20 pact does not rule out currency intervention by Japan

Posted on 12 April 2016 by VRS  |  Email |Print

Japan’s top government spokesman says the Group of 20’s agreement to avoid competitive currency devaluation does not mean Japan cannot intervene in response to one-sided currency moves.
The Bank of Japan and the government are tensely watching currency markets and the government is prepared to take appropriate steps as needed, Chief Cabinet Secretary Yoshihide Suga told Reuters, but declined to comment on what steps the government was considering………………………………………..Full Article: Source

World’s poorest countries rocked by commodity slump and strong dollar

Posted on 11 April 2016 by VRS  |  Email |Print

Jubilee Debt Campaign warns that developing countries are struggling to make debt payments as revenues deteriorate. The collapse in global commodity prices and a stronger US dollar have depleted the public coffers of some of the world’s poorest countries and will leave them as much as $61bn (£43bn) worse off this year, a report has warned.
The Jubilee Debt Campaign said that countries that relied on exports of commodities such as metals and oil had seen government revenues hit by a global markets rout last year that knocked the prices of crude oil, iron ore, copper and other raw materials to multi-year lows………………………………………..Full Article: Source

Why Hedge Funds Are Loading Up on Rubles

Posted on 11 April 2016 by VRS  |  Email |Print

Managers of some of the best-performing funds from from Berlin to New York are buying Russian ruble assets as the currency has rebounded 23 percent from a record low.
Stuart Sclater-Booth, who helps oversee more than $40 billion at Stone Harbor Investment Partners, turned overweight on the ruble in mid-February and is betting it will appreciate to as much as 63 per dollar, which would be a 6.2 percent gain from Friday’s closing level. Lutz Roehmyer, who helps manage $12 billion at Landesbank Berlin Investment GmbH, said he adds ruble assets to his portfolio almost every day………………………………………..Full Article: Source

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