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Dollar falls against franc, pares gains vs yen on Deutsche Bank concerns

Posted on 30 September 2016 by VRS  |  Email |Print

The U.S. dollar hit a more than one-month low against the Swiss franc and trimmed gains against the yen on Thursday on concerns over Deutsche Bank, while increased expectations for a December Federal Reserve rate hike kept the greenback generally afloat.
The franc and the yen, which are perceived to be safe-havens, benefited from the worries surrounding Germany’s biggest lender. U.S.-listed shares of Deutsche Bank (DB.N), which is fighting a $14 billion U.S. demand to settle claims over mortgage-backed securities, fell by more than 8 percent after touching record lows in Europe this week………………………………………Full Article: Source

A Donald Trump win could rock this currency (and it’s not the one you think)

Posted on 30 September 2016 by VRS  |  Email |Print

The Australian dollar would suffer most if Donald Trump were to win the U.S. presidential election, according to one foreign exchange strategist who calls the currency a “surprise trade” in this arena.
Boris Schlossberg, managing director of FX strategy at BK Asset Management, pointed out the Mexican peso has been the “inverse proxy for Trump’s political fortunes in the currency market for the last month,” appearing to rise and fall conversely on the Republican nominee’s favorability in the polls………………………………………Full Article: Source

Yuan Derivatives Trade Dries Up as Drop Swells Hedging Costs

Posted on 29 September 2016 by VRS  |  Email |Print

Hedging against further declines in Asia’s worst-performing currency has become so expensive that some global investors are throwing in the towel on yuan bonds.
The cost of swapping dollars for China’s currency has risen above the yields on onshore sovereign notes as depreciation extends into a third year. Daily trading in yuan derivatives, which accounts for more than 40 percent of the total for the currency, slumped 30 percent from three years earlier, data from the Bank for International Settlements show……………………………………Full Article: Source

Hong Kong to remain a yuan hub as currency joins reserve basket, says HKMA chief

Posted on 29 September 2016 by VRS  |  Email |Print

Hong Kong Monetary Authority chief executive Norman Chan Tak-lam expects Hong Kong to play a bigger role in international yuan business as the currency will be increasingly used for international trade settlement after it joins the IMF’s reserve currency basket this weekend.
Chan predicts that half of all China trade will be settled in the currency in five years time. He said the yuan will be more widely used for global trade settlement after it becomes part of the International Monetary Fund’s Special Drawing Right basket this Saturday. Regarded as something of an elite club, it means the yuan will become one of the five reserve currencies to be held by global central banks, alongside the US dollar, British pound, Japanese yen and euro……………………………………Full Article: Source

The Impact of Commodities on FX Markets

Posted on 28 September 2016 by VRS  |  Email |Print

Steven Saywell, global head of FX strategy at BNP Paribas, discusses the outlook for oil and commodities overall, plus their impact on currencies. He speaks with Guy Johnson and Caroline Hyde on Bloomberg Television’s “On The Move.”.………………………………….Full Article: Source

China’s Currency? That’s the Least of the Problems for the Next U.S. Leader

Posted on 28 September 2016 by VRS  |  Email |Print

In his video documentary “Death by China” the economist Peter Navarro, a Donald Trump adviser, promptly shows a Chinese dagger plunging into the heart of America, as blood spurts from the wound. Almost as quickly, the Republican presidential nominee raised the Chinese threat in his debate with Hillary Clinton on Monday night. He identified China as a currency cheat that steals American jobs. China, he said, “is the best ever at it.”
Except that Mr. Trump, like many a general, is fighting the last battle. His opponent’s weapons and tactics have changed……………………………………Full Article: Source

Currency traders waiting on Czexit signs

Posted on 28 September 2016 by VRS  |  Email |Print

The Czech koruna could be just weeks away from relinquishing its title as the world’s most boring currency. This title is no accident. In late 2013, the country’s central bank took drastic action, setting an upper limit on the currency as a way to deflect deflationary pressures.
With benchmark interest rates at the time a whisker above zero per cent, and with no desire to take rates into negative territory, this was really the central bank’s only option. Its line in the sand is 27. The central bank will not allow the euro to trade below that point against the koruna — and duly it hasn’t……………………………………Full Article: Source

Is HK a threat to Singapore’s lead in Asia FX trading ?

Posted on 27 September 2016 by VRS  |  Email |Print

Singapore remains the world’s third largest foreign exchange (FX) centre and Asia’s biggest, according to the 2016 Triennial Central Bank Survey by the Bank for International Settlement. This is no mean feat but with perennial rival Hong Kong snapping at its heels, an interesting question is whether the Republic’s status as the largest FX Asian centre is under threat.
The survey results, which were released early this month, showed that Singapore’s FX average daily trading volume jumped 35 per cent from three years ago to US$517 billion in April 2016……………………………………..Full Article: Source

Forex Trading Has Gone Social

Posted on 27 September 2016 by VRS  |  Email |Print

Forex social trading is a rapidly growing trend across the globe. Social investment networks allow investors to copy profitable trading strategies from other investors in their network or share their market knowledge with other traders, sometimes for a profit.
What social trading platforms do is provide an avenue for retail traders to learn from expert and talented peers so that they can minimize investment risks and boost returns. The reason forex social trading is on the rise is that it is perceived to produce more winners compared to conventional forex trading platforms where you have to rely on individual efforts to beat the market and that is sometimes hard for new traders……………………………………..Full Article: Source

A Weaker Currency Is No Longer the Economic Elixir It Once Was

Posted on 26 September 2016 by VRS  |  Email |Print

A weaker currency, once the cure-all for ailing economies around the world, isn’t the panacea it once was. Just look at Japan, where the yen plunged 28 percent in the two years through 2014, yet net exports to America still fell by 10 percent in the span. Or at the U.K., where the pound’s 19 percent tumble in the two years through 2009 couldn’t stave off a 26 percent decline in shipments to the U.S.
In fact, since the turn of the century, the ability of exchange-rate movements to affect trade and growth in major economies has fallen by more than half, according to Goldman Sachs Group Inc……………………………………Full Article: Source

Currency volatility poised to surge as US election, Fed loom

Posted on 26 September 2016 by VRS  |  Email |Print

Volatility in the $5.1-trillion-a-day (Dh18.7 trillion) foreign-exchange market is down, but not out, according to UBS AG. Currency swings will increase later this year as investors weigh the potential outcome of the US presidential election and the likelihood of a Federal Reserve year-end interest-rate increase.
The predicted volatility resurgence follows a period of calm that started in July, after traders absorbed the initial shock of the UK’s Brexit vote. A JPMorgan Chase & Co gauge of currency volatility fell to a two-week low this week……………………………………Full Article: Source

Renminbi to the rescue? How the rise of China’s currency could boost the British economy

Posted on 23 September 2016 by VRS  |  Email |Print

Chinese investment in Britain could increase in the short-term future after London became the second-largest offshore clearing centre for the renminbi, even though the UK capital’s lead in the currencies-trading business is shrinking.
In March this year London, the world’s largest single FX-trading centre, became the second-largest offshore clearing centre for the Chinese currency after surpassing Singapore. Britain processes 6.3% of all offshore transactions using the Chinese currency, but remains a distant second when compared to Hong Kong, which accounts for 72.5% of all renminbi payments………………………………………Full Article: Source

Morgan Stanley Says Plan for Weaker Dollar as Fed Stays on Hold

Posted on 23 September 2016 by VRS  |  Email |Print

Morgan Stanley said the dollar will suffer more losses as the greenback fell for a second day after the Federal Reserve refrained from tightening policy and lowered its long-term path for interest rates.
The U.S. currency weakened versus most of it major peers, pushing its drop this year beyond 4 percent, as traders digested the Fed announcement and the Bank of Japan’s move to shift the focus of its stimulus to controlling interest rates. An index of 20 emerging market currencies gained for a fourth straight day………………………………………Full Article: Source

IMF eyes more China yuan transparency with reserve currency move

Posted on 22 September 2016 by VRS  |  Email |Print

China will need to keep improving the transparency of its exchange rate regime once its yuan achieves reserve status as part of the International Monetary Fund’s currency basket on Oct 1, IMF officials said on Wednesday. The designation will make the yuan a “freely usable currency” in the eyes of the IMF, available for loans to IMF members and for repayments.
The yuan, also known as the renminbi, will join the dollar, euro, yen and British pound in the “special drawing rights” basket that forms the IMF’s unit of account. Relative amounts of these currencies will be fixed for five years on Sept 30 to achieve weightings determined last year…………………………………….Full Article: Source

Pound’s Fortunes Not So Bad After All to Top Currency Forecaster

Posted on 22 September 2016 by VRS  |  Email |Print

The pound’s immediate outlook is not as dire as initially predicted, according to Julius Baer Group Ltd., the top currency forecaster in Bloomberg surveys. The bank increased its year-end sterling forecast to $1.29, little changed versus current levels, from $1.21. It remains bearish longer term, projecting the pound to end 2018 at $1.21.
While sterling’s immediate outlook looks relatively calm, the currency will face headwinds next year as negotiations on Britain’s exit from the European Union risk deterring investment into the U.K., the Swiss bank said. The median forecast in a Bloomberg survey of analysts is for the pound to end the year at $1.28…………………………………….Full Article: Source

Ruble Weakens With Price of Oil as Citi Sees Currency Overvalued

Posted on 21 September 2016 by VRS  |  Email |Print

The ruble slid with the price of crude as Citigroup Inc. said the currency looks expensive compared with Russia’s main export earner. The ruble weakened 0.3 percent to 64.87 against the dollar by 5:39 p.m. in Moscow, trimming the second-best advance in emerging markets this year.
The 60-day correlation between oil and the ruble dropped to 0.56, near the lowest in a year. A reading of 1 would mean the two trade in lockstep. The Russian currency has climbed 0.7 percent this month, compared with a 3.4 percent drop for oil, a mismatch that reduces the amount of local currency the government collects from each barrel of oil sold for dollars abroad………………………………………Full Article: Source

How Japan can tame the currency speculators

Posted on 21 September 2016 by VRS  |  Email |Print

With Japan’s economy struggling to escape its deflationary torpor, the economic-revitalization plan that Prime Minister Shinzo Abe launched in 2012 has come under growing scrutiny. But Japan’s current travails, which have brought a concomitant decline in Japan’s stock market, stem from the yen’s appreciation — 24 percent over the last year — against major currencies.
Since Abenomics was introduced, Japan’s labor market has improved. Moreover, corporate profits have soared, and tax revenues have increased………………………………………Full Article: Source

Hedge Funds Cut Bearish Pound Bets Before Currency Slides

Posted on 20 September 2016 by VRS  |  Email |Print

Hedge funds and money managers trimmed net bearish positions on pound futures for the third week, missing out as the currency fell 2 percent this week. Bets that sterling would fall outnumbered bullish wagers by 82,821 in the week to Sept. 13, a decline of almost 8 percent from a week earlier, according to data from the U.S. Commodity Futures Trading Commission.
The U.K. currency dropped after the Bank of England signaled Sept. 15 that further easing can’t be ruled out while keeping its key interest rate and asset-purchase target unchanged………………………………………..Full Article: Source

Everything You Need to Know About China’s Weakening Currency

Posted on 16 September 2016 by VRS  |  Email |Print

Chinese central bankers must be grinning over their cups of hot tea. In August 2015 the People’s Bank changed the way it manages China’s renminbi. The currency’s 2% overnight fall triggered a global stock plunge, as investors worried that China was using devaluation to rescue a flailing economy. When the smoke cleared, China promised to keep the RMB stable.
But the currency kept falling: The RMB is down 3% this year against the dollar, and more against a global basket of currencies. “It is hard to square the continued depreciation … with the official commitment to maintain broad stability,” Capital Economics chief global economist Julian Jessop observed recently. And yet investors have reacted with a resounding “meh,” with U.S. stocks doing especially well………………………………………..Full Article: Source

Currency market volumes flat at $4.7 trillion in August

Posted on 16 September 2016 by VRS  |  Email |Print

Average daily trading in the global currency market was roughly flat at $4.68 trillion in August, little changed in comparison with both July and the same month a year ago, data from settlement system CLS showed on Thursday.
The average daily input volume of instructions submitted to CLS, combining settlement and aggregation services, fell by 16 percent to 883,368 from 1,050,046 in July, the data showed………………………………………..Full Article: Source

A Trump victory: currency markets are asking ‘what if?’

Posted on 15 September 2016 by VRS  |  Email |Print

As Hillary Clinton convalesces, the foreign exchange market is stirring. Medical bulletins about the Democratic nominee are helping to shake investors from their seeming indifference about the US presidential election, forcing them to at least confront the possibility that her opponent, the maverick Donald Trump, might just win.
The anti-establishment Republican candidate has trailed so far in the polls that the market has barely acknowledged an election that is now less two months away. Foreign exchange volatility is low and investors remain far more interested in what the Federal Reserve may do than who might occupy the White House in January………………………………………..Full Article: Source

Nobel Winner Stiglitz Spells Doom for Dysfunctional Euro Currency

Posted on 15 September 2016 by VRS  |  Email |Print

Nobel Prize winning economist and best-selling author Joseph E. Stiglitz has said the single currency Eurozone may have to be dropped completely as it is based on the flawed idea that a single currency can embrace a diverse group of countries with differing fiscal policies and economies.
The 19 countries of Europe that share the euro currency — known as the Eurozone — have been rocked by economic stagnation and debt crises, made worse by the global financial crash of 2008. Some countries have been in depression for years while the governing powers of the Eurozone have careened from emergency to emergency, most notably in Greece………………………………………..Full Article: Source

Beijing squeezes offshore yuan trade to slow currency slide

Posted on 14 September 2016 by VRS  |  Email |Print

The most vibrant market for yuan trading outside mainland China has turned into a key battleground for Beijing to defend the Chinese currency. Suspected intervention by Chinese banks in what’s known as Hong Kong’s “offshore” market has led to a surge in the cost for banks in the territory to borrow yuan from each other.
Investors and analysts believe the intervention — which they say was probably at the behest of China’s central bank — is aimed at thwarting bets against the Chinese currency, also known as the ­renminbi………………………………………..Full Article: Source

China’s yuan ends firmer, c.bank denies it is stabilising currency

Posted on 13 September 2016 by VRS  |  Email |Print

China’s spot yuan finished firmer on Monday as state-owned banks sold dollars, traders said, but the central bank doused market speculation it had tried to stabilise the Chinese currency. Two traders had told Reuters that state banks sold dollars after the Chinese central bank sharply weakened its official fixing. The People’s Bank of China (PBOC) occasionally acts through state banks.
The PBOC set the midpoint rate at 6.6908 per dollar prior to market open, the weakest since Aug. 31, and softer than the previous fix 6.6684. As the official guidance rate was set near the psychologically-important threshold of 6.7 per dollar on Monday, traders said state-owned banks offered dollars which pulled the yuan back to around 6.68………………………………………..Full Article: Source

World-Beating Currency Faces Triple Threat on Samsung, Pyongyang and Fed

Posted on 13 September 2016 by VRS  |  Email |Print

A rally by the South Korean won, the best performer of 31 major currencies this quarter, is crumbling in the face of a triple threat. The currency, which had gained 5.5 percent this quarter through Sept. 7, slid 1.2 percent Monday in a third day of declines. Concern global central banks are questioning the benefits of loose monetary policy prompted the worst outflows from the Seoul stock market in two weeks.
Bets on currency and stock volatility jumped after Samsung Electronics Co. told users to turn off their Note 7 mobile phones due to fire risk and intelligence authorities said there is a high chance North Korea will conduct its third nuclear test of 2016………………………………………..Full Article: Source

Gold may rise further if dollar sinks

Posted on 12 September 2016 by VRS  |  Email |Print

Gold prices ended flat last week. From a high of $1,352.7/ounce on Wednesday, gold prices dropped to $1,327.8/ounce by Friday following comments from a Federal Reserve Official that the central bank is on course to do the second rate hike soon.
The Fed funds futures on Friday showed that the market sees a 30 per cent probability of a rate hike in September (over half the market, however, still sees the next rate hike coming only in December). SPDR Gold Trust, the largest gold ETF in the world, saw holdings decline from 952 tonnes on Tuesday to 939.94 tonnes on Friday………………………………………..Full Article: Source

‘Czexit’?: Clock ticks on Czech currency floor

Posted on 12 September 2016 by VRS  |  Email |Print

Since 2013, the Czech koruna has been, arguably, the world’s most boring currency. It may not hold that title for much longer. A recap for those of you who are not Central European currency hipsters: The Czech National Bank imposed a Swiss-style lower limit on the euro-koruna exchange rate in 2013, writes Katie Martin.
It has committed to prevent the euro from falling under CZK27, in the hope that a somewhat weaker currency will prevent the Czech economy from undue deflationary pressure……………………………………….Full Article: Source

The second life of Australia’s superstar currency trader

Posted on 12 September 2016 by VRS  |  Email |Print

When Todd Edgar left his home town of Albion Park, in the Illawarra, and embarked on a career in trading, he wouldn’t have known that his 25-year path would symbolise the tumultuous transformation of global financial markets.
It is a journey that has taken him from the dealing room of Bankers Trust in Sydney to Paul Tudor Jones’s Tudor Capital hedge fund, before Edgar and his team of JPMorgan traders were famously poached by Barclays after a multimillion-dollar raid………………………………………..Full Article: Source

Brexit: The great headscratcher for the pound

Posted on 08 September 2016 by VRS  |  Email |Print

The FX market is wrestling with the current resilience of the pound and fears for the long term. Brexit is a brainteaser for a $5tn foreign-exchange market that typically struggles to hold two apparently contradictory thoughts at the same time.
The first is that sterling will rise in the short term; the second is that over the long term it will decline. It’s the challenge posed by the surprise resilience of the UK economy………………………………………..Full Article: Source

Wait goes on to see if Egypt will devalue currency

Posted on 08 September 2016 by VRS  |  Email |Print

What could hurt Egypt’s economy more than leaving the currency hugely overvalued for five years? Perhaps it could be for the government to leave the currency hugely overvalued for five years, then to send out signals it is going to devalue, then to leave the rate unchanged after all.
Because of the threat of an imminent and substantial – yet illusive – devaluation few businessmen have been buying pounds to invest in Egypt. They would prefer to wait it out rather than take a hit that could cost them 20 to 30 per cent overnight. Business has been grinding to a near halt as investors wait………………………………………..Full Article: Source

Hedge Funds Cut Bullish Dollar Bets

Posted on 07 September 2016 by VRS  |  Email |Print

Hedge funds and money managers cut net-bullish futures bets on the dollar for the fourth week, according to data from the Commodity Futures Trading Commission.
Wagers that the dollar would rise versus eight major currencies outnumbered bearish positions by 68,916 contracts in the week to Aug. 30, down more than 50 percent since Aug. 9. Currency traders weighed lackluster economic data on manufacturing and jobs against comments from Federal Reserve officials that bolstered the outlook for an interest-rate increase as early as this month………………………………………..Full Article: Source

Czech crown rise vs euro to be currency trade of 2017 -ING

Posted on 07 September 2016 by VRS  |  Email |Print

Positioning for a jump in the Czech crown’s value against the euro will be the trade of 2017, Dutch bank ING told clients on Tuesday, predicting the country would scrap its three-year-old currency peg early next year.
The Czech Republic has kept a lid on the crown since 2013 and intervened with increased regularity over the last year to hold the exchange rate on the weak side of 27 per euro as the country’s economy has thrived………………………………………..Full Article: Source

G20 Welcomes Yuan’s Inclusion Into IMF’s SDR Currency Basket

Posted on 06 September 2016 by VRS  |  Email |Print

The leaders of the Group of Twenty (G20) states welcome the inclusion of the Chinese currency into the International Monetary Fund’s Special Drawing Right (SDR) currency basket, the draft version of the Hangzhou communique said, as seen by Sputnik.
“Following the IMF’s decision, we welcome the inclusion of the RMB into the Special Drawing Right (SDR) currency basket on October 1st,” the preliminary draft copy of the Hangzhou Consensus said………………………………………..Full Article: Source

Speculators start betting on yen’s decline

Posted on 06 September 2016 by VRS  |  Email |Print

Uncertainties over Japanese and U.S. monetary policies are raising doubts that the yen’s rally will continue, with many speculators pouring cash into exchange-traded funds that bet against Japan’s currency.
The ProShares UltraShort Yen ETF is considered an indicator of the sentiment among hedge funds and other short-term speculators. The fund’s assets under management recently rose to $260 million, returning to the amount seen in December when the yen traded for around 120 to the dollar………………………………………..Full Article: Source

Currency War Fears Prompt G20 to Act

Posted on 05 September 2016 by VRS  |  Email |Print

The United States and China have agreed to do what they can to avoid a currency war, according to a White House statement issued before the opening of the Group of 20 nations meeting Sunday in the Chinese lake city of Hangzhou. The move reflects rising fears that some countries might forcibly devalue their currencies to protect falling exports, and hurt their competitors.
“The United States and China jointly reaffirm their G-20 exchange rate commitments, including that they will refrain from competitive devaluations and not target exchange rates for competitive purposes,” the White House said……………………………………….Full Article: Source

China, U.S. commit to refrain from competitive currency devaluations

Posted on 05 September 2016 by VRS  |  Email |Print

China and the United States on Sunday committed anew to refrain from competitive currency devaluations, and China said it would continue an orderly transition to a market-oriented exchange rate for the yuan.
A joint “fact sheet”, issued a day after U.S. President Barack Obama and his Chinese counterpart Xi Jinping held talks, also said the two countries had committed “not to unnecessarily limit or prevent commercial sales opportunities for foreign suppliers of ICT (information and communications technology) products or services”………………………………………..Full Article: Source

No basis seen for long-term drop in Chinese currency

Posted on 05 September 2016 by VRS  |  Email |Print

Worries about large-scale capital outflow can be eased and market expectations adjusted. Experts expect the renminbi to remain stable against a basket of currencies as there is no long-term basis for depreciation.
“Despite short-term pressure due to the prospect of higher interest rates in the United States and uncertainties in the global economy, the renminbi does not face continuous depreciation pressure in the long run,” said Jiang Chao, an analyst with Shanghai-based Haitong Securities………………………………………..Full Article: Source

Currency Trading Down for the First Time Since 2001

Posted on 02 September 2016 by VRS  |  Email |Print

Global currency trading fell for the first time since 2001, a further sign that banks and hedge funds have cut their international activities as tighter regulations and higher risk-aversion begin to bite.
Roughly $5.1 trillion a day of global currencies were traded on average in April, compared with $5.4 trillion in April 2013, according to a Bank for International Settlements survey released Thursday—a poll that is conducted every three years. The drop happened in the spot market, where investors buy and sell currencies outright. Volume fell 19% to a daily average of $1.7 trillion………………………………………..Full Article: Source

On Digital Currencies, Central Banks Should Lead

Posted on 02 September 2016 by VRS  |  Email |Print

In recent years, digital currencies have shown considerable promise. Research by the People’s Bank of China suggests that the best way to take advantage of these innovations is for central banks to take the lead, both in supervising private digital currencies and in developing digital legal tender of their own. At the PBOC, this effort is underway.
In approaching this challenge, the PBOC must carefully consider how to maintain financial stability, encourage innovation, and properly supervise the issuance and circulation of these new currencies………………………………………..Full Article: Source

Latin America Currency Divergence Tells Tale of Two Commodities

Posted on 01 September 2016 by VRS  |  Email |Print

The only thing they had in common this month was the name. As the Colombian peso posted the best performance in emerging markets in August, propelled by a jump in crude oil, a plunge in the price of copper pushed the Chilean peso to its worst monthly performance since May.
Oil is Colombia’s biggest export, while Chile is the world’s biggest producer of the industrial metal. “Oil helped the Colombian peso and copper didn’t help the Chilean peso,” said Mario Castro, a strategist at Nomura Holdings Inc. in New York. ……………………………………….Full Article: Source

Yuan‘s inclusion in SDR basket eases traders’ concern about currency’s volatility

Posted on 01 September 2016 by VRS  |  Email |Print

One month before China’s renminbi is formally included in the currency basket of the International Monetary Fund’s Special Drawing Rights, or SDRs, analysts and currency traders say their concerns about the yuan’s volatility have eased. “It’s the beginning of a new era for the yuan to play a bigger role in the global financial system,” said Candy Ho, the global head of RMB business development at HSBC in Hong Kong.
While the yuan is still not freely convertible into other currencies, and the government still exerts tight control over cross-border capital flows, the prospects for further liberalisation are positive, analysts said………………………………………..Full Article: Source

Brexit Blows Up Currency Derivatives Sold to U.K. Companies

Posted on 31 August 2016 by VRS  |  Email |Print

For eight years, TTT Moneycorp Ltd. regularly took Dariusz Suchicki to dinner and soccer matches, all while selling him, as the head of finance of a U.K.-based importer of Polish foods, a series of complex currency derivatives.
When the pound started moving sharply against the zloty, those instruments became toxic: They began costing Suchicki’s company, Best Foods, tens of thousands of pounds a month, the company said in court filings last year……………………………………….Full Article: Source

Japan: Finance Ministry vs. the currency speculators

Posted on 31 August 2016 by VRS  |  Email |Print

With Japan’s economy struggling to escape its deflationary torpor, the economic-revitalization plan that Prime Minister Shinzo Abe launched in 2012 has come under growing scrutiny. But Japan’s current travails, which have brought a concomitant decline in Japan’s stock market, stem from the yen’s appreciation — 24 percent over the last year — against major currencies.
Abenomics — which included substantial monetary and fiscal expansion — has nothing to do with it. Since Abenomics was introduced, Japan’s labor market has improved considerably: 1.5 million new jobs have been created, and the unemployment rate has fallen to just over 3 percent……………………………………….Full Article: Source

Why currency traders can’t lose in the $5.3 trillion-a-day global currency market

Posted on 30 August 2016 by VRS  |  Email |Print

For just the second time in the past decade, three major foreign-exchange trading strategies are all producing positive returns. The carry trade, in which investors borrow in Group of 10 currencies with low interest rates and use the proceeds to buy assets with higher yields, is on pace for its biggest annual gain since 2012, according to Deutsche Bank AG index data.
Trades that buy undervalued currencies and sell expensive ones, and tactics that latch onto foreign-exchange trends, are also making money. Choosing the correct foreign-exchange strategy has become even more important in a world of unprecedented central-bank monetary stimulus and currencies linked to historically low interest rates………………………………………..Full Article: Source

Currency swap between South Korea and Japan

Posted on 30 August 2016 by VRS  |  Email |Print

The currency swap between South Korea and Japan will likely resume in the coming months as the two countries’ finance ministers reached a consensus on Saturday to promptly start negotiations on the bilateral financial pact.
The two countries’ previous currency swap deal expired in February 2015. The new swap is designed to prepare for currency volatility arising from negative external factors - effectively acting as a buffer against sharp currency swings. A currency swap is an accord between two parties to exchange one currency for another at a specific rate in a bid to use the foreign currency to ease volatility in the market………………………………………..Full Article: Source

Gold May Have ‘Rally Legs’ - RBC’s Gero

Posted on 29 August 2016 by VRS  |  Email |Print

“As more things change the more they stay the same,” summed up George Gero of RBC Wealth Management, post Fed Chair Janet Yellen’s anticipated talk. Federal Reserve chair Janet Yellen said Friday that there is a stronger case for a rate hike with the U.S. economy nearing goals of maximum employment and price stability.
Yellen’s Jackson Hole speech was slightly hawkish, said Gero but seems to be helping the metals as ten-year treasuries and the dollar index are back to where they were. Gold dipped on the news but is now 1.5% higher post-remarks. December Comex gold futures last traded at $1,343.40 an ounce while September silver last traded at $18.950, 2.49% on the day………………………………………..Full Article: Source

Japan, South Korea to resume currency swap deal

Posted on 29 August 2016 by VRS  |  Email |Print

Japan and South Korea agreed Saturday to launch talks on resuming a currency swap deal, reflecting newly cooperative relations between the two neighbors. The two began operating a swap agreement in 2001, but testy ties precluded any effort to extend or renew it when it expired in February last year.
The deal lets one nation obtain dollars by giving its currency to the other. This serves as a cushion at times of market instability. In talks between financial officials of the two countries, the South Korean government proposed to strengthen bilateral economic ties and establish a new swap arrangement as a token of cooperation, the Japanese Finance Ministry said………………………………………..Full Article: Source

Jim Rogers: ‘If we all bought North Korean currency, we’d all be rich someday’

Posted on 29 August 2016 by VRS  |  Email |Print

Jim Rogers is nothing if not a contrarian, and one of his boldest moves is trying to bet on North Korea. The famous investor, who cofounded legendary hedge fund Quantum with George Soros, spoke to Real Vision TV, and said North Korea is where China was in 1981.
“If we all bought North Korean currency, we’d all be rich someday,” Rogers said. In short, Rogers is seeing the controversial country open up, which he says makes it a good bet………………………………………..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

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

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