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Sterling Slump Means Costlier Commodities for Post-Brexit U.K.

Posted on 28 June 2016 by VRS  |  Email |Print

The collapse in the pound since U.K. voters chose to quit the European Union means more expensive imports of oil, natural gas and industrial metals, although some farmers and distillers may have cause to celebrate.
Global commodities, mostly denominated in dollars, had already entered a bull market this year as supply disruptions and production cuts whittled away the surpluses that caused the biggest price collapse in a generation. Currency swings will add to the pain for the U.K. economy, which imports a lot more raw materials than it exports………………………………………..Full Article: Source

Strengthening Currencies Bedevil Central Banks

Posted on 28 June 2016 by VRS  |  Email |Print

Britain’s vote to leave the European Union has set off a fresh round of currency pressures in the world’s largest economies, further complicating efforts by central banks to spur growth. The pound hit a three-decade low on Monday, and both Standard & Poor’s and Fitch Ratings cut their ratings on the U.K., saying that last week’s vote raises risks to the country’s economy.
Meanwhile, the Japanese yen, Swiss franc and U.S. dollar posted further gains, as market turmoil resumed after the weekend and sent investors in search of havens………………………………………..Full Article: Source

UK currency slide threatens global growth

Posted on 28 June 2016 by VRS  |  Email |Print

Britain’s currency is taking a pounding. As the global financial markets Monday tried to find a footing after U.K. voters Thursday — in late results that affected the market Friday — decided to sever decades of ties to the European Union, currency traders continued to dump the pound.
Sterling fell to a 31-year low against the dollar, extending losses to nearly 12 percent from levels before the Brexit results were announced. Assurances from British government officials that the economy is sound as well as central bank pledges to defend the currency did little to stem the slide. British bank stocks were also hammered………………………………………..Full Article: Source

Banks prepare for another day of currency mayhem

Posted on 27 June 2016 by VRS  |  Email |Print

Extra staff called in to man FX desks as investors digest a weekend of UK political instability. Banks have called in extra staff in case more currency market violence ensues when trading begins in Asia on Monday.
Shockwaves propagated through markets for sterling, yen, euros and dollars on Friday after Britons voted to leave the EU, and investors spent the weekend simply coming to terms with the questions they face amid growing political instability in the UK………………………………………..Full Article: Source

Will Brexit Trigger Currency Intervention? (Video)

Posted on 27 June 2016 by VRS  |  Email |Print

Richard Kelly, TD Bank’s head of global strategy, discusses the impact of Brexit on Fed policy and global markets. He speaks with Bloomberg’s Alix Steel and Scarlet Fu on “Bloomberg Markets.”.………………………………………Full Article: Source

Currency ETFs That Will Move Regardless of Brexit

Posted on 24 June 2016 by VRS  |  Email |Print

The day of decision is finally here for Brexit, the vote that will determine whether or not Great Britain remains part of the European Union. Regardless of the outcome of the Brexit vote, some market observers see big moves ahead for some currency exchange traded funds with an obvious candidate being the CurrencyShares British Pound Sterling Trust.
Polls show mixed results, with online surveys revealing a much closer result while phone calls have suggested a lead for a remain. Sterling has acted as a barometer of sentiment in the run-up to the June 23 referendum, hitting a seven-year low against the U.S. dollar in February after the date of the vote was announced………………………………………..Full Article: Source

The pound could have a ‘visceral reaction’ to a Brexit, currency expert says

Posted on 24 June 2016 by VRS  |  Email |Print

The currency markets have priced in a remain vote for the U.K.’s referendum on whether to leave the European Union, meaning Friday could be “very dramatic” if Britons vote to exit, currency investor Mark Astley said Thursday.
“The probability of remain has been factored into the pound to perhaps 85 or even 90 percent,” the CEO of Millennium Global said in an interview with CNBC’s “Power Lunch.” A Brexit vote “would be so unexpected that there could be a visceral reaction.”……………………………………….Full Article: Source

Currency exchanges see demand spike as Britons ‘panic buy’ foreign cash during EU referendum

Posted on 24 June 2016 by VRS  |  Email |Print

Currency exchange shops have been stocking up on foreign cash to cope with people “panic-buying” ahead of the EU referendum. Simon Phillips, retail director at No 1 Currency, said demand had rocketed for all foreign currencies, with euros and dollars proving especially popular.
“We’ve dramatically increased stock levels to cope with the surge in demand during the final hours before the result is announced,” Phillips said………………………………………..Full Article: Source

Reduced Brexit fears lift European, commodity currencies

Posted on 23 June 2016 by VRS  |  Email |Print

The dollar was broadly weaker on Wednesday as risk appetite returned to markets, boosting higher-risk currencies, while sterling and the euro rose on the last day of campaigning before Britain’s referendum on European Union membership.
A swing in bookmaker odds toward Britain choosing to remain in the EU, following the murder of a British lawmaker last week, helped boost currencies like the Australian and New Zealand dollars, considered riskier investments because of their ties to commodity prices………………………………………..Full Article: Source

Britons are stocking up on currency before the EU referendum, Post Office says

Posted on 23 June 2016 by VRS  |  Email |Print

Britons have been rushing to get foreign currency ahead of the EU referendum, according to the Post Office. Sales of currency at the Post Office have surged 74 per cent since the weekend, compared to the same period last year.
Those going abroad are rushing to get cash to lock in exchange rates ahead of the vote, which some analysts have said could wipe more than 20 per cent of the value of the pound. Post Office Travel Money, which accounts for one in four foreign exchange transactions in the UK, told Reuters that branch sales of foreign currency were up 48.8 per cent on Tuesday, while online purchases of currency were up 381 per cent………………………………………..Full Article: Source

Does China Manipulate its Currency Like Donald Trump Says?

Posted on 23 June 2016 by VRS  |  Email |Print

After 20 years, the Chinese government must be used to being bashed by U.S. politicians and Congress for unfair trade practices or, as Trump has declared many times, being a “currency manipulator.”
Indeed, the exchange value of the yuan (also know as the renminbi or RMB) is fixed each morning by its central bank, the People’s Bank of China (PBoC), with a narrow band of only 2 percent allowed, up or down, within which market forces can have their say. In effect, it is an exchange rate set and controlled by the PBoC………………………………………..Full Article: Source

Nigeria’s naira extends losses after currency peg removed

Posted on 22 June 2016 by VRS  |  Email |Print

Nigeria’s naira weakened against the dollar for a second day on Tuesday after the central bank removed its currency peg in an effort to alleviate chronic foreign currency shortages choking growth.
The naira traded 1.1 percent weaker at 285 to the dollar at 1000 GMT, with $9 million traded. It had slumped 30 percent on Monday. The central bank caved into pressure to effectively devalue the naira in the wake of falling prices for oil, the country’s main export, announcing last week that it would abandon its 16-month-old peg at 197 to the dollar………………………………………..Full Article: Source

China’s ‘global’ currency is going local now

Posted on 22 June 2016 by VRS  |  Email |Print

Last week’s decision by MSCI not to include Chinese shares in its primary emerging-markets stock index has been viewed — widely and rightly — as a blow to China’s hopes of internationalising its financial sector.
There’s worse news, though: Even the progress China’s made thus far is in danger of going into reverse. MSCI’s choice is a sharp contrast to the one made by the International Monetary Fund last December, when it promised to begin including the Chinese yuan in its basket of “special drawing rights.”……………………………………….Full Article: Source

Hedge Funds Turn Most Bullish on Russian Ruble Since 2013

Posted on 21 June 2016 by VRS  |  Email |Print

Hedge funds boosted bullish bets on the ruble before the Federal Reserve meeting last week and after Russia’s central bank resumed monetary easing, data from the U.S. Commodity Futures Trading Commission show.
Speculators increased their long positions to 14,538 futures in the week ended June 14 from 8,086 contracts a week earlier. While they also doubled bets against the ruble, their net position representing the difference between the longs and the shorts reached the highest since February 2013………………………………………..Full Article: Source

Nigeria’s currency tanks against dollar on float

Posted on 21 June 2016 by VRS  |  Email |Print

Naira slides after central bank decision to engineer a devaluation to cope with low oil price. Nigeria’s long-awaited flexible foreign exchange rate regime got off to an explosive start on Monday as the naira slid by as much as 27 per cent to N254 to the US dollar.
The decision last week by the Central Bank of Nigeria to engineer a devaluation of the naira, adopting a “purely market-driven” system, comes as the oil-exporting country tries to withstand a rout in global oil prices………………………………………..Full Article: Source

Mr. Yen sees surge to ¥100 that may increase odds of intervention

Posted on 21 June 2016 by VRS  |  Email |Print

After correctly predicting the yen’s relentless march beyond ¥115, ¥110 and ¥105, former Finance Ministry official Eisuke Sakakibara now says the Japanese currency will gradually strengthen more than 4 percent toward ¥100 per dollar by the end of the year.
The currency’s value reflects the difference between monetary policy in the U.S. and Japan, Sakakibara, known as Mr. Yen for his ability to influence the exchange rate in the late 1990s, said in a Bloomberg Television interview………………………………………..Full Article: Source

Brexit Angst Leaves Almost No Currency Untouched With Days to Go

Posted on 20 June 2016 by VRS  |  Email |Print

Brexit stresses are seeping into virtually every corner of the global foreign-exchange market. Of 16 major currencies tracked by Bloomberg, all but three have seen a jump in the cost to hedge against big declines as Britain’s referendum on whether to stay in the European Union approaches.
The pound posted the biggest increase, closely followed by its continental neighbors amid speculation a vote on Thursday to leave would encourage other countries to reconsider their own membership………………………………………..Full Article: Source

Five ways Nigeria’s currency flotation will affect life

Posted on 20 June 2016 by VRS  |  Email |Print

Nigeria is allowing its struggling currency, the naira, to trade freely in a move to tackle the financial crisis in Africa’s most populous nation. Financial blogger Feyi Fawehinmi looks at how it will affect people’s lives.
1. Petrol prices will remain stable: Refined petrol is Nigeria’s single biggest import. The story of how an oil exporting nation has to import almost all of its refined products is well told. According to the National Bureau of Statistics, refined petrol imports in the first three months of 2016 amounted to 226bn naira ($1.1bn, £791m) or 15.6% of the total imports………………………………………..Full Article: Source

Nigeria floats its currency

Posted on 17 June 2016 by VRS  |  Email |Print

Bare shelves in supermarkets and soaring inflation would worry any central-bank governor. For Godwin Emefiele in Nigeria, the added twist is that both problems are partly his fault. The central bank’s policy of trying to maintain the value of the naira, Nigeria’s currency, in the face of a slump in the price of oil, which used to account for about 90% of the country’s export earnings, has failed miserably. Now it is being scrapped.
Emefiele tried heroically to conserve the country’s dwindling reserves of foreign exchange. In effect, he banned the import of a huge range of goods, from tinned fish to toothpicks; arbitrarily rationed the supply of dollars from the central bank to importers; and threatened to clamp down on people trading dollars on the black market………………………………………..Full Article: Source

Lew warns China not to weaken its currency

Posted on 17 June 2016 by VRS  |  Email |Print

Treasury Secretary Jacob Lew on Thursday warned China not to revert to past foreign-exchange policy in which it kept its currency artificially low to boost its exports.
“Any reversion to the foreign exchange policies and export-led growth model of the past, within the current context of weak global growth, would trigger a new round of tension between our two countries,” Lew said in a speech at the American Enterprise Institute after returning from talks with top Chinese officials in Beijing earlier in the month………………………………………..Full Article: Source

Currency Traders Flee Euro, Pound as Brexit Fear Fuels Haven Bid

Posted on 17 June 2016 by VRS  |  Email |Print

Currency traders in the $5.3-trillion-a-day market abandoned the euro and pound and piled into the dollar and yen, seeking safety before the U.K. votes on whether to leave the European Union.
The 19-nation euro dropped 2.8 percent against the yen, its worst day since 2010, as investors looked for refuge before the British referendum on June 23. The flight to haven currencies, including the yen, dollar and Swiss franc, follows decisions by the Bank of Japan to refrain from adding any stimulus and the Federal Reserve leaving interest rates unchanged Wednesday………………………………………..Full Article: Source

Currency-Hedged ETFs for an Uncertain Dollar Outlook

Posted on 16 June 2016 by VRS  |  Email |Print

When looking to international markets, traders have turned to both international stocks and even included some currency-hedged strategy to manage foreign exchange currency fluctuations. On the other hand, investors can consider partial currency-hedged exchange traded funds to diminish currency risks.
Currency traders are seeing wild swings, with the U.S. dollar oscillating on foreign market risks, global central bank policies, Federal Reserve speculation and economic data at home. The U.S. Dollar Index (DXY), which tracks the U.S. dollar’s movement against a basket of major foreign currencies, has declined 3.8% year-to-date. The dollar index, though, has bounced back off its May lows………………………………………..Full Article: Source

The Losing Battle Against the World’s Most Powerful Currency

Posted on 16 June 2016 by VRS  |  Email |Print

The Swiss franc’s persistent strength has posed challenges for export-dependent Switzerland. The undisputed king of currencies is Switzerland’s franc. And these days no one is more disappointed by that fact than the Swiss.
Peter Kugler, a professor at the University of Basel, reckons the franc has appreciated at a rate of 1% a year against the dollar and pound—for the past century. The next move higher, which would put further pressure on the country’s exporters and the central bank, could come with the U.K. referendum on an exit from the European Union looming on June 23………………………………………..Full Article: Source

Has Janet Yellen raised the risk of a currency war?

Posted on 16 June 2016 by VRS  |  Email |Print

Will Janet Yellen’s decision to keep US interest rates steady trigger a fresh round of currency wars? Central bankers in Europe and Japan will be gnashing their teeth as their currencies continue to gain ground against the weakening US dollar. The stronger yen and euro puts pressure on European and Japanese exporters, and fuels deflationary pressures by cutting the cost of imports.
The US dollar moved lower overnight after Yellen and her fellow policy-makers at the US Federal Reserve lowered their estimates for future rate rises. Lower interest rates weigh on the US dollar because they discourage investors who are chasing higher returns………………………………………..Full Article: Source

China’s Yuan Shudders Despite Beijing’s Campaign to Steady the Currency

Posted on 16 June 2016 by VRS  |  Email |Print

The yuan touched its weakest level against the dollar in more than five years after MSCI decision. Anxiety is building around the yuan, as the Chinese currency briefly fell to its weakest level against the dollar in more than five years on Wednesday.
The yuan’s tumble early in the day was partly driven by MSCI Inc.’s decision not to include mainland shares in its indexes. It was the third time MSCI had turned down China’s push to be included and meant sudden death to prospects of what had been estimated to be hundreds of billions of dollars of capital inflows………………………………………..Full Article: Source

Nigeria Central Bank to Announce New Currency Policy Wednesday

Posted on 15 June 2016 by VRS  |  Email |Print

Nigeria’s central bank Governor Godwin Emefiele will unveil a new currency policy on Wednesday afternoon in Abuja, the capital, according to a spokesman. The governor’s announcement will be televised, Isaac Okorafor said by phone from Abuja.
Emefiele has faced calls for more than a year to devalue the currency, as other oil exporters from Russia to Kazakhstan and Angola have done, amid a rout in crude prices since mid-2014 to around $50 a barrel………………………………………..Full Article: Source

MSCI Delays Adding China’s Local Currency Shares to Emerging-Market Index

Posted on 15 June 2016 by VRS  |  Email |Print

MSCI Inc., a widely-followed global index provider, said on Tuesday it wasn’t adding China’s local-currency shares to its benchmark emerging markets index, a fresh setback for China’s efforts to join international markets.
The inclusion of China’s local-currency shares, known as A shares, had been widely anticipated by global investors and Wall Street. It was expected to bring tens of billions of dollars into China’s stock market at a time when its economy is cooling and capital is fleeing. The MSCI Emerging Markets Index is tracked by money managers with some $1.5 trillion of assets………………………………………..Full Article: Source

Does China manipulate its currency as Donald Trump claims?

Posted on 14 June 2016 by VRS  |  Email |Print

After 20 years, the Chinese government must be used to being bashed by U.S. politicians and Congress for unfair trade practices or, as Trump has declared many times, being a “currency manipulator.”
Indeed, the exchange value of the yuan (also know as the renminbi or RMB) is fixed each morning by its central bank, the People’s Bank of China (PBoC), with a narrow band of only 2 percent allowed, up or down, within which market forces can have their say. In effect, it is an exchange rate set and controlled by the PBoC………………………………………..Full Article: Source

China Sows Confusion Over Currency Policy

Posted on 14 June 2016 by VRS  |  Email |Print

China’s conflicts with foreign news reporting have added to doubts about its currency policies as it tries to maintain confidence in the economy and control over capital flows.
Last month, The Wall Street Journal reported that the People’s Bank of China (PBOC) had effectively abandoned a reform of exchange rate policy announced last August to make the value of the yuan more market oriented, putting daily rate setting decisions “back under tight government control.”……………………………………….Full Article: Source

Should You Hedge Currency Risk?

Posted on 13 June 2016 by VRS  |  Email |Print

Currency prices go up, they go down, and sometimes they crash. And just like other financial markets, currency prices are not immune to volatility. Should you be hedging your portfolio against currency volatility?
The first argument in favor of currency hedged investments is that chaos happens. It can occur at any time in any place and although there’s sometimes clues, nobody knows when it will exactly strike. Argentina, China (CYB), and Venezuela are recent examples of nations that have suffered severe economic setbacks because of falling currencies………………………………………..Full Article: Source

Yuan step gives London lead role on currency’s global stage

Posted on 13 June 2016 by VRS  |  Email |Print

George Osborne’s ambition to make London the go-to option for global trading in the yuan came a step closer to being realised last night when China’s state-owned currency marketplace revealed that it intends to open branches in the capital and in New York.
The China Foreign Exchange Trade System said that the expansion of its network beyond national borders would allow it to serve more overseas institutions and become a “main trading platform and pricing centre” for the yuan globally………………………………………..Full Article: Source

Kazakhstan forecasts strengthening of national currency

Posted on 13 June 2016 by VRS  |  Email |Print

It is worth expecting strengthening of the national currency in Kazakhstan by late 2016, said the forecast of Kazakhstan’s Kazkommerts Securities investment company.
“Despite the situation greatly improved on the foreign markets and the internal factors normalized, we have not seen real strengthening of the national currency,” the company’s forecast said. “In other words, the potential of the currency has not been exhausted, and the exchange rate may hit 310-320 tenge per dollar by late 2016,” the forecast said………………………………………..Full Article: Source

South Korea’s currency slides on surprise rate cut

Posted on 10 June 2016 by VRS  |  Email |Print

South Korea’s currency slipped in value after the country’s central bank unexpectedly cut its benchmark interest rate to a new record low. The won fell 0.3% against the US dollar after the Bank of Korea cut the seven-day repurchase rate by 25 basis points to 1.25%.
The Kospi stock index fell 0.14% to close at 2,024.17 points. Analysts say that there could be further rate cuts in the coming months as the economy is in a weak state. “As things stand, the economy is already in a fragile state and could certainly use more support,” said Krystal Tan from Capital Economics………………………………………..Full Article: Source

Zimbabwe’s Mugabe says ’surrogate currency’ will prevent dollar outflow

Posted on 10 June 2016 by VRS  |  Email |Print

Zimbabwean President Robert Mugabe said on Thursday the introduction of local bank notes by the central bank later this year, which he called a “surrogate currency”, would help prevent foreigners taking greenbacks out of the country.
He also said the shortage of U.S. dollars in the economy would be overcome soon, although he did not elaborate. In the grip of its worst drought in a quarter century that has left 4 million people facing food shortages, the southern African nation is also running out of cash, forcing the central bank to impose limits on imports and withdrawals from banks………………………………………..Full Article: Source

Brexit Beats Interventions as Danish Currency Hits Crisis Levels

Posted on 09 June 2016 by VRS  |  Email |Print

Less than a week after Denmark said it resorted to currency interventions for the first time in 16 months, the krone is again trading at critically strong levels. The culprit is Britain’s June 23 referendum on its European Union membership, with fears of a so-called Brexit driving investors into the safest markets, such as AAA-rated Denmark’s krone assets.
“The krone is now trading at levels that the central bank in the past has deemed too strong,” said Jan Stoerup Nielsen, senior analyst at Nordea Markets in Copenhagen. “As we get closer to the Brexit referendum, the central bank will rely on interventions to fight any krone strength.”……………………………………….Full Article: Source

Premier Li: No currency or trade war to stimulate exports

Posted on 09 June 2016 by VRS  |  Email |Print

China is willing to maintain high-level interaction with the United States to promote the sustainable, healthy and stable development of bilateral ties, Premier Li Keqiang said on Tuesday.
China and the United States should jointly strive to deepen mutual trust and expand cooperation, Li said when meeting with US Secretary of State John Kerry and Treasury Secretary Jacob Lew, who attended the eighth round of China-US Strategic and Economic Dialogues and the seventh round of China-US High-Level Consultation on People-to-People Exchange in Beijing………………………………………..Full Article: Source

Swiss Foreign-Currency Reserves Jumped in May

Posted on 08 June 2016 by VRS  |  Email |Print

Figures suggest central bank intervened in currency markets as part of effort to bring down value of franc. The Swiss central bank’s foreign-currency reserves jumped in May, data showed Tuesday, suggesting that it intervened in currency markets last month in an effort to weaken the persistently strong franc.
The Swiss National Bank’s foreign-currency reserves rose to 602.1 billion Swiss francs ($620.34 billion) in May, from 587.9 billion francs in April, according to the SNB’s monthly report. The figures can fluctuate depending on changes in the franc’s exchange rate against other currencies such as the euro and dollar………………………………………..Full Article: Source

Why Currency Wars Are So Destructive

Posted on 07 June 2016 by VRS  |  Email |Print

When a country devalues its currency, a trading partner may retaliate, leaving both countries worse off. When economies start to flag, governments will occasionally start what is known as a currency war. It is important that investors understand what the term means and why it can be so destructive to the countries involved.
Such conflicts start when one country decides to lower the value of its currency to increase its exports. Exports become cheaper for foreign buyers whose currency doesn’t deflate………………………………………..Full Article: Source

Europe’s Worst Currency Lures NN Manager Undaunted by Politics

Posted on 07 June 2016 by VRS  |  Email |Print

Poland’s new leaders will probably soften a proposal to force banks to convert $35 billion of Swiss franc mortgages into zloty, according to a money manager whose contrarian bet calls for a rebound in eastern Europe’s worst-performing currency.
Marcin Adamczyk, who helps oversee about $7 billion of emerging-market debt as a fund manager at NN Investment Partners in the Hague, is buying the zloty on the view that it will strengthen once the government clarifies details of a home-loan swap that the central bank deemed as “pure evil” in February………………………………………..Full Article: Source

Dollar gold price jumps on poor jobs data, physical demand remains dire

Posted on 06 June 2016 by VRS  |  Email |Print

The dollar gold price posted a significant jump Friday afternoon following the release of much weaker-than-expected US employment data, pushing the paper market even further from physical fundamentals.
In total 38,000 new jobs where created, according to US non-farm payroll data, falling far short of market expectations of 160,000 and easing the possibility of an interest rate hike by the Federal Reserve at its next meeting mid-June. The London Bullion Market Association Gold Price posted a $29.5 increase between the morning and afternoon settlements, jumping from $1,211/troy oz to $1,240.50/tr oz………………………………………..Full Article: Source

U.S., China Make Great Progress in Currency Talks, Lew Says

Posted on 06 June 2016 by VRS  |  Email |Print

The U.S. and China have made progress on their exchange-rate debate over the years while the Asian nation’s ability to control excess capacity will be central for expanding its economy, Treasury Secretary Jacob J. Lew said Sunday in Beijing.
Lew, speaking to students at Tsinghua University, said China’s government is moving in the right direction on its currency. He, however, added that the People’s Bank of China in August “was not clear” in its communication about the currency………………………………………..Full Article: Source

Morocco aims for flexible currency system in early 2017

Posted on 06 June 2016 by VRS  |  Email |Print

Morocco is aiming to introduce a flexible exchange rate system in the early part of 2017, its central bank governor said on Sunday. “We are considering the move currently from fixed exchange rate to a flexible exchange rate,” Abdellatif Jouahri said.
Jouahri said the country would work with a technical mission from the International Monetary Fund during the second half of this year as part of introducing the currency move. He did not give details of the new system, but the IMF has identified “introducing greater exchange rate flexibility” as an important step which it said would increase the ability of Morocco’s economy to absorb shocks and diversify………………………………………..Full Article: Source

China’s Currency Black Box Cracked, But Pressures Remain

Posted on 03 June 2016 by VRS  |  Email |Print

Janet Yellen arguably has more influence over Chinese policy right now than her colleagues in Beijing. China’s currency traded at its weakest level against the U.S. dollar in more than five years this week, and no global panic has ensued. One reason: Beijing has put the yuan quite literally on a predictable path. But this can only continue so long as markets move in a way Beijing can tolerate.
China has jerked back and forth on its currency policy since last August, when a surprise change on how it manages the yuan sent markets haywire. The long-term intent seems to be to push through changes that will eventually have the yuan largely dependent on markets………………………………………..Full Article: Source

Currency Trader, Police Thyself

Posted on 03 June 2016 by VRS  |  Email |Print

Last week, a working group at the Bank of International Settlements issued a new code of conduct governing global currency trading, a response to the most recent price-fixing scandal in the foreign-exchange markets.
The document contains non-binding “principles” that are entirely voluntary — general guidelines for good behavior. Cynics could be forgiven for dismissing this as an empty gesture that lacks the coercive rules and punishments required to make global standards stick………………………………………..Full Article: Source

Is China The World’s Biggest Currency Manipulator? No, The U.S. Is

Posted on 02 June 2016 by VRS  |  Email |Print

The bankruptcy of economic policy was on display with the U.S. Treasury’s recent release of its “watch list” of potential currency manipulators. Conspicuously absent was the biggest manipulator of the 21st century: Uncle Sam himself.
Washington’s decision in the early part of the last decade to “gradually” weaken the dollar to stimulate the economy and boost exports led to the economic disaster of 2007–09, which, in turn, led to the disastrous election of Barack Obama. Countries that are fooling around with their money are only following our dreadful example………………………………………..Full Article: Source

What You Need to Know About Investing in Currency-Hedged ETFs

Posted on 01 June 2016 by VRS  |  Email |Print

Currencies that just won’t stay still are causing havoc for investors who ventured to buy foreign stocks and bonds. It’s not a new problem, but over the past few years there has been a surge in products designed to eliminate that risk – so-called currency-hedged exchange-traded funds.
But should you consider them as part of your portfolio? “The change in currency prices explains a significant amount of the volatility when investing in international funds,” says Bob Stammers, director of investor education at the CFA Institute in New York………………………………………..Full Article: Source

China rebuts currency criticism as renminbi takes big fall

Posted on 01 June 2016 by VRS  |  Email |Print

Normally tight-lipped central bank speaks out against claims it has abandoned market liberalisation. China’s currency suffered its largest monthly depreciation since its devaluation last August as the central bank pushed back against claims it has abandoned market-orientated exchange rate reform.
The renminbi fell 1.6 per cent against the dollar in May, after the People’s Bank of China reformed the way it sets its daily guidance rate for the currency, known as the midpoint price. The currency fell 2.6 per cent in August………………………………………..Full Article: Source

Asia’s Best Currency Gain Marks Myanmar Escape From Dictatorship

Posted on 01 June 2016 by VRS  |  Email |Print

Myanmar’s kyat has become Asia’s top currency of 2016, a clear sign the nation is starting to emerge from decades of isolation. Spurred by Aung San Suu Kyi’s victory in the country’s first open elections since 1990, the kyat is up more than 10 percent, finally on track for an annual gain after falling every year since a managed float in 2012.
A series of reforms has revitalized Myanmar’s economy and society since the military junta was officially dissolved in 2011, and the nation’s opening-up has accelerated since Suu Kyi’s National League for Democracy party won elections in November. Cash is pouring in now, laying the foundations for further appreciation………………………………………..Full Article: Source

Buhari Leaves Traders Guessing on Path for Nigerian Currency

Posted on 31 May 2016 by VRS  |  Email |Print

Nigerian President Muhammadu Buhari’s Sunday speech has left foreign-exchange traders with little clue as to the fate of the naira. Far from clarifying the government’s approach on the currency, following central bank Governor Godwin Emefiele’s pledge last week to adopt a more flexible exchange-rate policy, Buhari’s words have left the market as confused as ever.
While some, including Standard Chartered Plc, said a looming recession had forced Buhari to change tack and allow the naira to depreciate, others said the president — who once likened letting the currency weaken to “murder” — had signaled continued resistance to reducing its value………………………………………..Full Article: Source

Chinese currency falls to three-month low

Posted on 31 May 2016 by VRS  |  Email |Print

The Chinese currency fell yesterday, heading for the steepest monthly decline since it was devalued last August, after the US Federal Reserve chief said an interest rate increase could come in the next few months.
Onshore yuan declined 0.24 per cent to a three-month low of 6.5814, extending losses this month to 1.55 per cent. The People’s Bank of China (PBOC) had set the mid-point rate at 6.5784 per US dollar before the market opened, 0.45 per cent weaker than the previous fix of 6.549 and the currency’s softest fixing since February 2011………………………………………..Full Article: Source

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