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A weak yuan is a bigger threat to the global economy than Brexit

Posted on 26 August 2016 by VRS  |  Email |Print

Investors are ignoring a steadily weakening Chinese yuan. But they might be making a dangerous mistake, according to a top strategist at State Street Global Advisors. The managers of the world’s second-largest economy have taken advantage of the frenzied media coverage of Brexit, and other news events like the Rio Olympics and the U.S. election to slowly guide their currency, the yuan, lower against both the dollar and a trade-weighted basket of currencies without triggering a global financial panic.
That’s in contrast to the global market chaos that followed a devaluation of the yuan in August 2015 and a sharp drop by the currency in January………………………………………..Full Article: Source

A weak yuan is a bigger threat to the global economy than Brexit

Posted on 26 August 2016 by VRS  |  Email |Print

Investors are ignoring a steadily weakening Chinese yuan. But they might be making a dangerous mistake, according to a top strategist at State Street Global Advisors. The managers of the world’s second-largest economy have taken advantage of the frenzied media coverage of Brexit, and other news events like the Rio Olympics and the U.S. election to slowly guide their currency, the yuan, lower against both the dollar and a trade-weighted basket of currencies without triggering a global financial panic.
That’s in contrast to the global market chaos that followed a devaluation of the yuan in August 2015 and a sharp drop by the currency in January………………………………………..Full Article: Source

Trump Vows to Label China a Currency Manipulator

Posted on 26 August 2016 by VRS  |  Email |Print

In a speech in Tampa, Fla., Wednesday afternoon, Republican Presidential NomineeDonald Trump outlined a seven-point plan to bring millions of jobs to the U.S. that involved labeling China a currency manipulator.
He proposed renegotiating unconfirmed trade agreements such as the Trans-Pacific Partnership and told his audience he would pull the U.S. out of the North American Free Trade Agreement. In a first, Trump challenged China for “illegal activities” and vowed to label the country he did real estate business with a currency manipulator………………………………………..Full Article: Source

Solving the yen puzzle

Posted on 25 August 2016 by VRS  |  Email |Print

The Japanese yen has been a star performer in 2016, and after a 20 percent move in less than eight months, everyone is wondering where this currency goes next. It’s a question being asked far beyond foreign exchange desks.
A stronger yen is helping some American multinational companies, including technology players like HP Inc. and automakers like General Motors that have complained in the past about a weaker yen giving a lift to their Japanese competitors’ exports and an unfair competitive advantage………………………………………..Full Article: Source

How wise are currency pegs?

Posted on 25 August 2016 by VRS  |  Email |Print

Some currencies linked to the dollar came under attack in early 2016 from traders speculating that it’s becoming too expensive to continue defending them. Currency markets have been roiled since China cut the value of the yuan for the first time in two decades; the country burned through more than $500 billion of its reserves in 2015.
Both Egypt and Nigeria also effectively devalued last year, as did Argentina. Switzerland shocked traders by scrapping the franc’s three-year-old cap against the euro in early 2015, which forced the central bank in Denmark to defend the krone’s tie-up to the euro………………………………………..Full Article: Source

Euro currency doomed unless changes made, says Nobel-winner Joseph Stiglitz

Posted on 24 August 2016 by VRS  |  Email |Print

The structure of the euro zone has “doomed” the euro currency to “failure,” and if changes aren’t made, the region could suffer a break-up, Nobel prize–winning economist Joseph Stiglitz said Tuesday.
“Unless they put in place the kinds of institutions we have in the United States that do allow a single currency to work, they are going to face the real threat of some form of a break-up,” the Columbia University professor said……………………………………….Full Article: Source

World’s Worst Currency Slump Gleaning Rewards for Nigeria

Posted on 24 August 2016 by VRS  |  Email |Print

More than two months after Nigeria allowed its currency to devalue, the country is starting to reap some dividends. In the past two weeks, Exotix Partners LLP and Standard Bank Group Ltd. have told clients, most of whom fled after the country started imposing capital controls from late 2014, that they should start buying naira assets again.
The worst-performing currency this year among more than 150 globally has depreciated 37 percent against the dollar since the central bank abandoned its peg on June 20, while bond yields have jumped to more than 20 percent. The naira strengthened 4.6 percent to 315 per dollar on Tuesday after falling to a record 350.25 on Aug. 19………………………………………..Full Article: Source

Big banks plan to coin new digital currency

Posted on 24 August 2016 by VRS  |  Email |Print

Four of the world’s biggest banks have teamed up to develop a new form of digital cash that they believe will become an industry standard to clear and settle financial trades over blockchain, the technology underpinning bitcoin.
UBS, the Swiss bank, pioneered the “utility settlement coin” and has now joined forces with Deutsche Bank, Santander and BNY Mellon — as well as the broker ICAP — to pitch the idea to central banks, aiming for its first commercial launch by early 2018………………………………………..Full Article: Source

The state of the Chinese currency proves money cannot be controlled

Posted on 23 August 2016 by VRS  |  Email |Print

Just over a year ago a 3 per cent devaluation of the Chinese yuan against the dollar triggered panic in global markets amid fears about a faltering Chinese economy and an escalating currency war. A similar episode occurred early this year.
Yet since April the yuan has fallen by about 3 per cent with barely a murmur, begging the question whether panic has been replaced by complacency. Some things have certainly changed………………………………………..Full Article: Source

Currency market struggles despite Brexit night bounce

Posted on 23 August 2016 by VRS  |  Email |Print

Traders have long been at the heart of the currency market, world’s biggest and whose capital is London. Their buying and selling of large amounts of currencies has helped to maintain a deep pool of liquidity, but a series of changes in financial regulations and banks’ business models means they are a dwindling breed.
Decades of largely uninterrupted growth in the currency business has stalled since it topped $5 trillion a day in 2013………………………………………..Full Article: Source

Dollar Disaster Looms? China and Russian Currencies Break Away

Posted on 22 August 2016 by VRS  |  Email |Print

Russia leaves the Dollar based monetary system and adopts a system of Sovereign Currency. The implications are phenomenal! “In 1990 the first priority of Washington and the IMF was to pressure Yeltsin and the Duma to “privatize” the State Bank of Russia, under a Constitutional amendment that mandated the new Central Bank of Russia, like the Federal Reserve or European Central Bank, be a purely monetarist entity whose only mandate is to control inflation and stabilize the Ruble.
In effect, money creation in Russia was removed from state sovereignty and tied to the US dollar.” 2016: “The Stolypin club report advises to increase the investment, pumping up the economy with money from the state budget and by the issue of the Bank of Russia”………………………………………..Full Article: Source

Former Treasury Official Collyns on China’s Currency

Posted on 22 August 2016 by VRS  |  Email |Print

A year ago, the People’s Bank of China jolted financial markets by devaluing the Chinese currency. Investors were rattled again when China’s yuan — also called the renminbi, or RMB — dropped last fall. They worried that China’s economy was weaker than anyone thought and that Beijing was driving down the currency to make the country’s exports more affordable overseas.
The currency fell again from April through July and is now down nearly 5 percent over the past year. But investors don’t seem so worried anymore. The Associated Press asked Charles Collyns, a former Treasury Department official who is chief economist at the Institute of International Finance, to explain………………………………………..Full Article: Source

Currency conversion: where to get more euros for your pound

Posted on 19 August 2016 by VRS  |  Email |Print

It’s emerged that some bureaux de change are now charging more than £1 for a euro. Currency exchange desks at two UK airports were offering just 99 cents for a pound this week, according to currency specialist Caxton FX. It is the first time the exchange rate has been this bad in three years.
MoneyCorp at Stansted was offering €0.9915 on Tuesday, while ICE’s rate at Luton was €0.99. The pound has fallen 12% against the euro since the UK voted to leave the EU back in June………………………………………..Full Article: Source

Mongolia lifts rates to halt currency slide

Posted on 19 August 2016 by VRS  |  Email |Print

Public spending cuts ordered after tugrik tumbles to record low against dollar. Mongolia raised interest rates to 15 per cent from 10.5 per cent and froze some public spending on Thursday after the tugrik hit a record low against the US dollar following 23 days of weakening.
The mining-dependent economy has been one of the worst hit by the global commodities downturn following a debt and construction bubble during the boom years………………………………………..Full Article: Source

A split euro is the solution for Europe’s single currency

Posted on 18 August 2016 by VRS  |  Email |Print

The problems with the structure of the eurozone may be insurmountable. That Europe, and especially the eurozone, has not been doing well since the 2008 crisis is beyond dispute. The single currency was supposed to bring prosperity and enhance European solidarity. It has done just the opposite, with depressions in some countries greater than the Great Depression.
To answer the question about what is to be done, one has to answer another: what went wrong. Some claim that policymakers made a set of mistakes — excessive austerity and poorly designed structural reforms………………………………………..Full Article: Source

Who Would Win a Currency War? No One

Posted on 18 August 2016 by VRS  |  Email |Print

It’s been a year since a sudden, 1.9 percent decline in the Chinese yuan rattled global markets and prompted fears of a global currency war. China has mostly soothed nerves by moderating the renminbi’s swoon since then. But what should really put minds to rest is the knowledge that no one - not even China, which arguably did power its rise, at least in part, on the back of an artificially depressed yuan - could win a true currency war today.
The temptation to gain an advantage over competitors with a cheaper currency hasn’t diminished, of course. First and foremost, devaluation holds out the promise of boosting exports by making them less expensive.https://www.bloomberg.com/view/articles/2016-08-17/no-one-can-win-a-global-currency-war” target=”_blank”>Source

The world’s worst performing currency right now is Mongolia’s

Posted on 18 August 2016 by VRS  |  Email |Print

Even Genghis Khan himself might find it hard to conquer this battle. Mongolia’s currency is on its longest losing streak on record as the government grapples to contain an economic crisis.
Back in 2011, a mining boom helped make it the world’s fastest-growing economy with growth in gross domestic product of around 17.5%. But the tugrik lost about 7.8% of its value this month, making it the world’s worst-performing currency, says Bloomberg data………………………………………..Full Article: Source

Iceland prepares to end currency controls

Posted on 17 August 2016 by VRS  |  Email |Print

Iceland plans to significantly ease capital controls for individuals and companies, marking the end of a regime that was described as the crutch for the Icelandic economy following the 2008 crisis.
The Finance Ministry plans to put forward legislation on Wednesday to pave the way for the removal of capital controls for Icelanders who have been living with the restriction for eight years. The recommendations will mean that outward foreign direct investment will be unrestricted, but still subject to confirmation by the central bank………………………………………..Full Article: Source

Nash and Wray - China must act boldly on currency

Posted on 17 August 2016 by VRS  |  Email |Print

It has been a year since China unexpectedly devalued the yuan, setting off weeks of alarm in global financial markets. Companies scurried to repay foreign currency debts, residents moved to diversify their savings abroad and traders struggled to figure out how the currency should be valued.
Beijing supposedly made the adjustment to accommodate the yuan’s inclusion in the International Monetary Fund’s Special Drawing Rights basket of reserve currencies. Officials later announced the yuan would be managed around a basket of currencies as opposed to the previous peg to the U.S. dollar………………………………………..Full Article: Source

Bitcoin trading booms, lures currency traders

Posted on 16 August 2016 by VRS  |  Email |Print

Bitcoin trading volume is soaring in Japan as wild price movements spur an increasing number of currency speculators to shift into the digital-money market. Japan’s leading bitcoin exchange operator said Monday that it surpassed 200,000 customers this month, rising tenfold from a year ago.
“Since this spring, the trading volume has been growing at a pace that we have never seen before,” said Yuzo Kano, CEO of bitFlyer, which handles some 40% of bitcoin trading in Japan………………………………………..Full Article: Source

Hedge Funds Make Record Bearish Pound Bets on Brexit Pessimism

Posted on 15 August 2016 by VRS  |  Email |Print

Hedge funds have made their biggest bearish bet on the pound before U.K. data due this week that will show the early effects of the nation’s decision to leave the European Union. Sterling reached a one-month low Monday ahead of reports on inflation, retail sales and unemployment benefit claims for July, which will provide more detail on how the economy is faring after the June 23 referendum.
The pound had its worst day on record when the vote for Brexit became clear, while losses deepened this month following the Bank of England’s decision to cut interest rates and boost its stimulus plan………………………………………..Full Article: Source

The currency question

Posted on 15 August 2016 by VRS  |  Email |Print

The question for India would be whether in the current global non-system, inflation targeting is the best choice. As the tenure of Reserve Bank of India (RBI) governor Raghuram Rajan draws to a close, appreciations and encomia have been pouring in. An editorial in this newspaper argued that, if one had to sift all of Rajan’s accomplishments, the adoption of inflation targeting as India’s new monetary policy paradigm “is undoubtedly Rajan’s most defining contribution to policymaking as governor”.
This is most certainly true—whether one applauds the move or is critical of it, it represents an important structural shift in one of the two pillars of conventional macroeconomic policy (the other, of course, being fiscal policy)………………………………………..Full Article: Source

Bitcoin pioneer Jered Kenna and TradeZero offer digital currency dark pool trading

Posted on 12 August 2016 by VRS  |  Email |Print

Bitcoin pioneer Jered Kenna has teamed up with online broker dealer TradeZero to create the world’s first dark pool exchange for Bitcoin and eventually other digital currencies. Dark pools are the name given to private exchanges or forums for trading securities, which facilitate very large orders without impacting the market and creating adverse price movements.
The Bitcoin market is less liquid than traditional FX and hence more volatile.Dark pool trading in Bitcoin would be useful to mainstream investors who may want to make large trades in Bitcoin, or use it as a currency hedge without alerting the market to their positions………………………………………..Full Article: Source

Yuan’s Volatile Year Has Magnus Doubting Global Currency Push

Posted on 11 August 2016 by VRS  |  Email |Print

The foremost watchers of China’s yuan say stability is coming at a cost. After a year defined by last August’s shock devaluation and a string of surprise yuan fixings in January, officials have reined in volatility by tightening capital controls and increasing intervention.
While the measures eased outflow pressures, they also showed policy makers are willing to push back ambitions for the yuan to be an international currency. With the yuan just weeks away from inclusion in the International Monetary Fund’s basket of reserve currencies, Royal Bank of Canada says China has slowed the pace of reforms needed to make it more freely traded. ……………………………………….Full Article: Source

China’s currency war? (Video)

Posted on 11 August 2016 by VRS  |  Email |Print

CNBC’s Seema Mody reports on the next steps for the value of the Chinese yuan. The “FMHR” traders and Kevin O’Leary, O’Shares Investments Chairman, weigh in.……………………………………….Full Article: Source

Central banks are printing money as though the global economy is in freefall

Posted on 11 August 2016 by VRS  |  Email |Print

Central banks around the world are now spending $200 billion a month on emergency economic stimulus measures, pumping this money into their economies by buying bonds. The current pace of purchases is higher than ever before, even during the depths of the financial crisis in 2009.
And yet, despite the extraordinary support of so-called quantitative easing (QE), the global economy is not in great shape. What was supposed to bolster economies temporarily during times of crisis has become a routine tool for policymakers, who long ago cut interest rates to zero (or below) but haven’t seen the pick-up in activity they would have hoped………………………………………..Full Article: Source

Renminbi shock a distant memory for currency markets

Posted on 10 August 2016 by VRS  |  Email |Print

This time last year, the biggest early-day news about the renminbi appeared to be an announcement of a new, improved Rmb100 note to fight counterfeiting. It was until China’s central bank fixed the currency 1.9 per cent weaker than it had the previous day.
Traders were so stunned they initially thought there was something wrong with their hearing. That change in the daily fix, around which the onshore renminbi trades 2 per cent either side, was five times the size of any fix move by the People’s Bank of China before then, and is still twice the size of any change since the turmoil it triggered………………………………………..Full Article: Source

Currency Markets Are Dead Right Now

Posted on 10 August 2016 by VRS  |  Email |Print

Foreign-exchange markets haven’t been this calm in a year and a half, thanks to the efforts of major central banks. A J.P. Morgan index that tracks volatility in major currencies this week fell to its lowest level since early January 2015, according to data from Thomson Reuters.
That means it’s as calm in the currency market since before foreign-exchange traderswere rocked by the Swiss National Bank’s move to unexpectedly lift the cap on its currency, the franc, in the middle of January of last year. A similar index tracking expected swings in emerging-market currencies is only slightly higher………………………………………..Full Article: Source

The Russian ruble is in rally mode as oil prices climb

Posted on 09 August 2016 by VRS  |  Email |Print

Russia’s currency has the heaviest correlation with oil among major emerging- and developed-market currencies. Russia’s currency was on track Monday for its largest daily gain against the U.S. dollar in three weeks, largely thanks to a recovery in oil prices.
The currency has been extremely volatile lately as concerns about rising oil supplies have sent prices of the commodity tumbling below $50 a barrel, ending a period of stability that saw prices creep higher for most of the first half of 2016. Swings in the price of oil have a wide-ranging impact across financial markets. Moves in energy and materials shares are often correlated with the commodity. As are the currencies of large oil exporters………………………………………..Full Article: Source

The pound has not been so sterling after Brexit

Posted on 09 August 2016 by VRS  |  Email |Print

The pound has been steadily falling as the Brexit referendum and Bank of England’s moves to shore up the economy have pushed investors into selling the pound. Its downward slide over the last 12 months means sterling is now worth 16 per cent less against the dollar, at £1/$1.31, compared to £1/$1.56 previously. It’s even weaker against the euro, having fallen 18 per cent in the last year, down to £1/€1.18.
The pound fell again as the Bank of England announced a batch of measures to prevent the emergence of a post-Brexit crisis. Everyone’s agog at the impact of the rate cuts, but the relative strength of sterling has a considerable effect on our economy too………………………………………..Full Article: Source

China’s Foreign Currency Reserves Fall But It’s Still A Currency Manipulator

Posted on 08 August 2016 by VRS  |  Email |Print

China’s foreign currency reserves have fallen slightly in the latest figures. Which might be showing that the country is still a currency manipulator as charged by Donald Trump and others even if a little bit less of one.
Sadly though for that theory of economic war and the necessary protectionism to win it while China is still indeed a currency manipulator it manipulates the value of the yuan up, not down. Thus producing exactly the opposite to the effect alleged. This makes exports from China more expensive for us and our imports to there cheaper for them………………………………………..Full Article: Source

Get more foreign currency for your Brexit-hit pounds

Posted on 08 August 2016 by VRS  |  Email |Print

The plunging pound is a painful consequence for holidaymakers of the Brexit vote, with sterling falling just as millions head off for their long-awaited summer break. With the pound buying much less foreign currency than before June 23, it has never been more important to hunt down the best deal.
Luckily, there are now many ways to convert pounds into foreign money, from apps to “swapping” online with other holidaymakers, which offer more competitive options for anyone going abroad this summer………………………………………..Full Article: Source

No Break for Worst Asian Currency as Clouds Gather Over Malaysia

Posted on 05 August 2016 by VRS  |  Email |Print

The bad news just doesn’t stop for Asia’s worst-performing currency. Already reeling from a renewed slump in oil prices and a political scandal that just won’t go away, the Malaysian ringgit is now facing the prospect of another cut in interest rates.
It’s the region’s biggest loser in the past month and analysts still see scope for it to drop more than 2 percent by year-end. The currency’s slide highlights all is not well as the nation’s economy heads for its worst performance this decade………………………………………..Full Article: Source

Economics: Singular currency

Posted on 04 August 2016 by VRS  |  Email |Print

Who killed the euro? With the spotlight now on Britain’s relationship with the currency’s crucible, the European Union, that question has an edge. Were the culprits the visionary politicians who ignored structural differences between European economies when they conceived the euro in the 1980s — most notably Jacques Delors, president of the European Commission at the time?
Was it the neoliberal international economic and financial establishment, in Washington DC, New York and London as well as Frankfurt and Brussels, that thought markets (even financial ones) were rational and self-correcting?……………………………………….Full Article: Source

Why Warren Buffett Doesn’t Care About Currency Movements

Posted on 04 August 2016 by VRS  |  Email |Print

There is no shortage of advice that investing is more successful when it is conducted with a long-term objective. The reason often cited is the power of compounding, and that is a very powerful reason. However, there is another subtle, but extremely powerful reason why investing with a long-term horizon is more beneficial that most people realize.
Warren Buffett was recently being interviewed and was asked a question about currency exposure given Berkshire Hathaway’s extensive network of business that is conducted around the world………………………………………..Full Article: Source

Currency Traders Ensnared by Volatility See 2016 Losses Deepen

Posted on 03 August 2016 by VRS  |  Email |Print

Money managers trading in the $5.3-trillion-a-day currency market can’t catch a break. The investors have endured a five-month slump, their longest losing streak in foreign exchange since 2013. What was shaping up as the first monthly gain since February turned into yet another bust, after a rough stretch last week left the Citi Parker Global Currency Manager Index down 0.9 percent in July and on pace for a second straight annual drop.
Profits evaporated as a surprisingly weak U.S. economic growth report and smaller-than-expected stimulus from the Bank of Japan spurred a bout of volatility that the funds failed to capture. The pain shows no sign of subsiding………………………………………..Full Article: Source

Why does Goldman Sachs think the Fed is flirting with currency targeting?

Posted on 03 August 2016 by VRS  |  Email |Print

Because the Fed certainly isn’t. Yet analysts at the bank nonetheless have some strong words about New York Fed President William Dudley’s focus on the dollar.
Let’s get this out of the way: We consider it a huge stretch to think the Fed — which only started targeting inflation in 2012 — is anywhere near actually targeting a level for the dollar. Dudley said outright that it isn’t. And drawing any proper conclusions about the FOMC’s decision-making process from one member’s comments is always tricky………………………………………..Full Article: Source

Gold dollar spot price around $1,350/oz adds to physical buying pain: sources

Posted on 02 August 2016 by VRS  |  Email |Print

The spot dollar gold price found renewed support Monday, following weaker than expected US second-quarter GDP data released late Friday, adding further pressure to the already dismal physical buying conditions in key consumer hubs including India.
Second quarter US GDP disappointed Friday, rising just 1.2% against expectations of a 2.5% gain. “By now it must seem like a familiar storyline. Just at a time when evidence was building that the US economy was in a position for the Fed to again contemplate rate hikes, some weak domestic data or a global event quite quickly scuttle those plans,” ANZ bank said Monday………………………………………..Full Article: Source

Hedge Funds Raise Bearish Pound Bets to Record Before BOE

Posted on 02 August 2016 by VRS  |  Email |Print

Hedge funds and other large speculators have boosted their bearish bets against the pound to the most since records began in 1992, according to U.S. Commodity Futures Trading Commission data. A U.K. report Monday suggested they may be right.
Manufacturing shrank more in July than initially forecast, adding to speculation that the Bank of England will cut interest rates on Aug. 4 amid signs that Britain’s decision in June to leave the European Union is hitting the U.K. harder than previously envisaged………………………………………..Full Article: Source

How to Survive a Massive Currency Devaluation

Posted on 02 August 2016 by VRS  |  Email |Print

Heineken’s experience with the Nigerian naira brings a whole new dimension to currency risk. Yet the Dutch brewing giant is sufficiently global to cope with a few stuttering petro-economies.
Nigeria’s central bank pulled its currency peg with the U.S. dollar in June. The naira plummeted more than 40% on its first day of trading after the announcement. But a devalued exchange rate is better than no exchange rate, said Heineken’s Chief Financial Officer Laurence Debroux………………………………………..Full Article: Source

Morgan Stanley warns currency traders worst to come for dollar

Posted on 01 August 2016 by VRS  |  Email |Print

The dollar is set to fall 5 per cent in the next few months, the Federal Reserve isn’t raising interest rates anytime soon and US economic data is only going to get worse. That’s what Morgan Stanley chief global currency strategist Hans Redeker told clients in a note published Thursday, citing in-house indicators showing US domestic demand is set to fade in the coming months. It didn’t take long for markets to prove him prescient.
The greenback fell 1.3 per cent Friday, capping its worst week since April, after the Commerce Department said US second-quarter gross domestic product advanced at about half the rate economists had forecast………………………………………..Full Article: Source

Currency fluctuations the immediate issue post-Brexit: Michael Creed

Posted on 01 August 2016 by VRS  |  Email |Print

Currency fluctuations are one of the immediate issues facing Ireland following Brexit, Minister for Agriculture Michael Creed has said. Minister Creed said there was still time to negotiate terms that would affect Ireland following Britain’s vote to leave the European Union.
Enda Kenny met Prime Minister Theresa May earlier this week to discuss issues including a border between the North and the Republic. Creed said: “(The UK) remains a part of the European Union until they have left and that’s likely to be a couple of years at least………………………………………..Full Article: Source

Currency Trading’s ‘Last Look’ Rules Are Changing, BOE Says

Posted on 29 July 2016 by VRS  |  Email |Print

A controversial practice in currency trading known as “last look” is beginning to change, according to the Bank of England, which is among the regulators to have scrutinized such market rules.
Some foreign-exchange platforms have changed their policies, giving priority to orders that are less susceptible to exploitation, the BOE said in a report on Thursday. It comes a year after Britain’s central bank said last look was vulnerable to abuse. London is the global center for currency trading, a $5.3 trillion market………………………………………..Full Article: Source

Why currency wars will cause the world more financial pain

Posted on 28 July 2016 by VRS  |  Email |Print

The currency wars raging across global markets are entering a more dangerous phase. Japan and Europe are likely to further ease monetary policy in an attempt to weaken their currencies to address the lack of growth and low inflation.
China, meanwhile, needs to devalue to help manage a slowing economy, property bubble, industrial overcapacity, fragile banking system and export-dependent, debt-based economic model. These efforts may not work. For example, both the yen and euro so far have proved resilient, remaining stable or even rising despite actions designed to devalue the currency………………………………………..Full Article: Source

Scotland Considering Cryptocurrency as Independent Currency Option

Posted on 28 July 2016 by VRS  |  Email |Print

People in Scotland have started exploring different currency options following Brexit. There have been calls for the Scottish referendum in the past. While Scotland decided against leaving the United Kingdom in the past, the recent vote by Englanders to leave the European Union may soon have the UK witnessing renewed calls for the separation of Scotland.
The Common Weal think tank in Scotland has recently published a report with 9 different currency options for the region if it were to dissociate itself from the UK………………………………………..Full Article: Source

Russia’s Currency Is Turning a Blind Eye to Oil Prices

Posted on 27 July 2016 by VRS  |  Email |Print

The Russian ruble is proving surprisingly impervious to the price of oil. The currency of the world’s largest energy exporter has more or less ignored the value of the commodity in the past few months, according to Citigroup Inc. analysts led by Luis Costa. Usually when oil prices fall, so does the currency, but not so recently:
Fair value for the currency is 68 rubles to the dollar, according to the analysts’ calculations — based on regression modelling of Brent crude futures and the dollar-ruble exchange rate. The current level is more like 65.8………………………………………..Full Article: Source

Florida judge rules bitcoin is not currency

Posted on 27 July 2016 by VRS  |  Email |Print

The judge threw out money laundering charges against a man who sold bitcoins to undercover cops. In a win for bitcoin advocates, a Florida judge on Monday ruled that bitcoins do not count as money, throwing out felony charges against a website designer accused of illegally transmitting and laundering $1,500 worth of bitcoins.
Florida resident Michell Espinoza faced felony charges after selling bitcoins to undercover detectives who told him they wanted to use the bitcoins to buy stolen credit card numbers, as the Miami Herald reports………………………………………..Full Article: Source

Canadian Dollar Drops to Four-Month Low as Commodities Weaken

Posted on 26 July 2016 by VRS  |  Email |Print

The Canadian dollar tumbled to the lowest in four months as oil, the country’s second-largest export, extended its slide and traders ramped up bets on greater monetary-policy divergence between the Bank of Canada and the Federal Reserve.
The Canadian dollar declined for a fifth day, falling to the lowest since March 25. Crude fell in New York as producers continue to ramp up production even with oil stockpiles at the highest seasonal level in decades. The U.S. dollar rallied on speculation the Fed will signal at its policy meeting Wednesday that it’s on course to raise interest rates later this year………………………………………..Full Article: Source

Nigerian currency slump sharpens focus on central bank

Posted on 26 July 2016 by VRS  |  Email |Print

The Nigerian naira tumbled to a fresh record low on Monday, taking its losses against the dollar to 55 per cent during the past month and sharpening the pressure on policymakers in Africa’s largest economy to raise interest rates.
Nigeria’s central bank finally gave in to market pressure in the middle of last month to scrap the naira’s 16-month old currency peg, prompting a devaluation designed to restore investor confidence and haul the economy out of recession………………………………………..Full Article: Source

Fund return hit by commodities, strong dollar

Posted on 25 July 2016 by VRS  |  Email |Print

China Investment Corporation announced on Friday that its overseas investments generated a net return of negative 2.96 percent in dollar terms in 2015, falling from a positive 5.47 percent return for 2014, due to volatilities in international financial markets and foreign exchange losses triggered by an appreciating dollar.
A father and his daughter take part in the riddle-guessing contest at a KFC outlet in Zhengzhou, capital of Henan province, during this year’s Lantern Festival. The $814 billion Chinese sovereign wealth fund posted a net cumulative annualized return of 4.58 percent since its establishment in September 2007, compared with 5.66 percent in 2014………………………………………..Full Article: Source

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