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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

Yen remains strongest major developed currency in 2016

Posted on 25 July 2016 by VRS  |  Email |Print

Strategists forecasting the yen will post its first annual gain since 2011 are standing their ground in the face of a rout driven by speculation the Bank of Japan (BoJ) will expand record stimulus.
The yen remains this year’s strongest major developed currency even after a 2.3% tumble this month following Ben S Bernanke’s visit to Tokyo last week, which spurred speculation the BoJ would directly finance government debt - a policy known as helicopter money. The yen climbed the most in almost a month last week after BBC Radio 4 broadcast an interview with Governor Haruhiko Kuroda, that was recorded on June 17, in which he said there is no need and no possibility of introducing such a policy………………………………………..Full Article: Source

Dollar buoyant vs euro, yen as risk-on mood prevails

Posted on 25 July 2016 by VRS  |  Email |Print

The dollar was buoyant against the euro and yen early on Monday as a prevailing risk-on mood continued to support the U.S. currency and assets. Upbeat U.S. business activity data out on Friday also added to prospects of a near-term Federal Reserve interest rate hike and supported the greenback.
The euro was down 0.1 percent at $1.0969 after slipping to a one-month low of $1.0955 on Friday in the wake of shootings that took place on Friday in Munich. Against the safe-haven yen the dollar was up 0.1 percent at 106.30, having recovered from a dip below the 106 threshold after Wall Street shares resumed their advance………………………………………..Full Article: Source

Ruble’s Growing Strength Concerns Kremlin

Posted on 22 July 2016 by VRS  |  Email |Print

After months of instability and plunging rates, the ruble has finally gained 17 percent against the U.S. dollar since early January, hitting 63.75 to the dollar on July 20.
Yet this might not be good news for Russian policy-makers. Instead, they are left with some difficult decisions. “The ruble is growing stronger despite certain price volatility on commodity markets,” said Russian President Vladimir Putin in one meeting. “In this context, of course, we must think about what we should do and how we should do it.”……………………………………….Full Article: Source

Kremlin Warning Daily on Ruble Gains Puts Currency Into Reverse

Posted on 22 July 2016 by VRS  |  Email |Print

Russia’s ruble headed for its lowest level in a week on speculation policy makers will shut down the currency’s gains as officials echoed a warning by President Vladimir Putin that its appreciation may have gone too far.
The ruble erased an advance at the start of trading and headed for a third daily loss after a Kremlin aide said the currency’s strength relative to oil prices endangers the budget and local companies’ competitiveness………………………………………..Full Article: Source

Why the Dollar Is the Enemy of Commodity Values

Posted on 21 July 2016 by VRS  |  Email |Print

The global financial marketplace is a complex, interconnected organism where every company, commodity, and financial asset is just a piece of a much larger picture. What happens with one asset can influence another, and so on. There’s a relationship that exists between asset classes that, while not perfect, tends to follow a pattern over time.
The relationship usually follows a certain order – currencies up, commodities down, bonds up, and stocks up or down. It works in reverse as well with commodities going higher if currencies fall. Keep in mind that commodity values play a bigger role in this relationship than it might appear – commodity prices drive stock and bond performance. Let’s take a look at how this works………………………………………..Full Article: Source

Dollar Strength Is Finally Weighing on Gold and Other Commodities

Posted on 21 July 2016 by VRS  |  Email |Print

The strength in the dollar against commodity currencies as well as the Euro is weighing on gold. As the U.S equity markets set daily record highs and the dollar gains upward momentum, the liquidation of commodity length is having trouble attracting fresh length. Volumes this week in both the underlying futures and over the counter trading have been muted as if hedge funds have started their summer holidays early.
It seems that once the Dollar index broke through 97, the technical funds/algorithmic traders hit metals and energy bids in tandem. Gold doesn’t seem to have a big technical level beneath the market for some time but I believe $1300-to-$1305 will be major support………………………………………..Full Article: Source

Brexit currency effect to have big impact on company results: report

Posted on 21 July 2016 by VRS  |  Email |Print

Currency market fluctuations following Britain’s vote to leave the European Union will hurt corporate results in the coming quarters, possibly resulting in a negative impact of as much as $35 billion to $40 billion, according to a report from FIREapps on Wednesday.
FiREapps CEO Wolfgang Koester called Britain’s June 23 decision to exit EU the latest currency crisis, and one that could lead to “significant impacts on the income statements of companies who did not prepare for Brexit.”……………………………………….Full Article: Source

Australia’s Biggest Money Manager Says Currency May Rally to New Highs

Posted on 20 July 2016 by VRS  |  Email |Print

Australia’s biggest money manager says the nation’s currency may build on a seven-week winning streak to surge above 80 U.S. cents this year.
With investors expecting monetary settings to diverge as the Federal Reserve raises interest rates and Australia’s central bank lowers them, the Aussie could climb to heights unseen since May 2015 if policy makers don’t follow through, according to Ilan Dekell, who oversees A$50 billion as head of macro for global fixed income at Sydney-based AMP Capital Investors Ltd………………………………………..Full Article: Source

Russia to Treat Bitcoin as Foreign Currency

Posted on 20 July 2016 by VRS  |  Email |Print

Depending on how soon all involved parties can come to an agreement, the law proposal will be submitted to the Duma by the end of 2016. The status of Bitcoin in Russia has been up in the air for quite some time now. There only seems to be two courses of action: either Bitcoin would be banned, or it would be allowed.
But perhaps there is a third option on the table, as authorities want to label Bitcoin as “foreign currency”. Putting Bitcoin on the same level as foreign currency in Russia would have some interesting consequences. Using Bitcoin in the country will remain prohibited, but users can buy Bitcoin in Russia through exchange platforms. Additionally, they can use this purchased cryptocurrency to spend it in different countries around the world………………………………………..Full Article: Source

Yuan’s Best Forecaster Says This Currency Slump Is Close to Over

Posted on 19 July 2016 by VRS  |  Email |Print

After its worst quarter on record, the yuan may finally be headed for a break. The People’s Bank of China will hit the brakes on depreciation to avoid sparking global volatility and exacerbating capital outflows, according to Svenska Handelsbanken, the currency’s top forecaster.
The case for an end to yuan weakness is supported by its impending entry into the International Monetary Fund’s reserves basket in October as well as a dovish Federal Reserve spurring dollar declines, says JPMorgan Asset Management………………………………………..Full Article: Source

Anxiety compounds currency crisis

Posted on 19 July 2016 by VRS  |  Email |Print

One of the immediate effects of the EU referendum in June was seen in the price of sterling, which plummeted to its lowest level against the dollar in three decades. Sterling fell 7.6 per cent against the dollar on June 24, and the currency had slipped 5.9 per cent against the euro in the same period, data from FE Analytics shows.
For the year to date to June 24, the pound is down 7.2 per cent against the dollar and down 9.5 per cent against the euro, with many expecting sterling to be the hardest hit in the coming months as negotiations to exit the EU begin………………………………………..Full Article: Source

SNP team looks at new currency to replace pound

Posted on 18 July 2016 by VRS  |  Email |Print

The SNP is considering plans to establish a new currency in an independent Scotland and abandon its policy of retaining sterling. A team of Nationalist MPs assessing options is expected to report to the first minister after the party’s previous position was blamed for losing votes in the 2014 referendum.
Sir Nicholas Macpherson, former permanent secretary to the Treasury and a critic of independence in 2014, said last week that the Nationalists and their allies had a “golden opportunity” to recast their case after Brexit and should plan for a separate currency backed by a central bank………………………………………..Full Article: Source

Turkish currency in steepest fall since 2008 on coup attempt

Posted on 18 July 2016 by VRS  |  Email |Print

The Turkish lira fell to a three-week low versus the U.S. dollar in late U.S. trading on Friday as because of the failed attempted coup to overthrow the government. Reports of the coup attempt also stoked safehaven bids for U.S. Treasury bonds, paring their earlier losses.
The Turkey lira was last down 5.0 percent at 3.0300 lira per dollar. “Have you seen the latest headlines on Turkey? That probably has something to do with it. This dollar surge is very much headline-driven,” said Vassili Serebriakov, currency strategist at Credit Agricole in New York………………………………………..Full Article: Source

Ruble Rises as Oil Bolsters ‘Most Attractive’ Emerging Currency

Posted on 15 July 2016 by VRS  |  Email |Print

Russia’s ruble climbed to a three-month high amid prospects for stimulus in major economies as Credit Suisse Group AG called it the “most attractive” emerging-market currency at current oil-price levels.
The ruble added 1.4 percent to 62.96 rubles by 5:55 p.m. in Moscow, the second-best performing currency in emerging markets after South Africa’s rand. Five-year government bonds also advanced. Brent crude increased 1.6 percent to $46.96 a barrel after losing almost 5 percent yesterday………………………………………..Full Article: Source

Olivier Blanchard: We Are Not in a Currency War (Video)

Posted on 15 July 2016 by VRS  |  Email |Print

Former IMF Chief Economist Olivier Blanchard discusses global exchange rates and U.S. dollar strength. He speaks with Bloomberg’s Tom Keene on “Bloomberg Surveillance.”.………………………………………Full Article: Source

Malaysia’s surprise rate cut raises currency war fears

Posted on 14 July 2016 by VRS  |  Email |Print

Malaysia’s currency dropped in response to the country’s central bank announcing a surprise rate cut, its first in seven years, raising the prospect of currency wars breaking out among Asian countries to boost growth.
Bank Negara Malaysia caught economists off guard, nearly all of whom expected no change in its benchmark overnight rate, by paring it back by 25 basis points to 3 per cent………………………………………..Full Article: Source

Britain wins currency wars with one vote: Ex-Fed’s Fisher

Posted on 14 July 2016 by VRS  |  Email |Print

The United Kingdom vote to leave the European Union served to devalue the pound at a time when many world powers have been spending trillions to weaken their currencies to give them an advantage on trade, former Dallas Fed President Richard Fisher said Wednesday.
“The British were able to achieve what [European Central Bank President Mario Draghi] and everyone else have been trying to achieve through just incredible quantitative easing. They devalued their currency,” Fisher said……………………………………….Full Article: Source

Yen slides, and sterling, commodity currencies surge as risk appetite returns

Posted on 13 July 2016 by VRS  |  Email |Print

The dollar rose to its highest level against the yen in more than two weeks on Tuesday, as a rekindled appetite for risk continued to drive sentiment after Japan’s ruling coalition won a weekend election.
The election results drove expectations for new measures to stimulate growth in Japan, which were reinforced by a meeting on Tuesday of Prime Minister Shinzo Abe and former U.S. Federal Reserve Chairman Ben Bernanake………………………………………..Full Article: Source

Digital currency Steem soars 1,000% in value in two weeks

Posted on 13 July 2016 by VRS  |  Email |Print

Currency behind social media website Steemit, in which users are rewarded or paid based number of ‘thumbs up’, has rocketed to more than $150m in value. Steem, the digital currency behind the new social media website Steemit, soared more than 1,000% in value on Tuesday to more than $150m, two weeks after it first paid people who posted on its website, according to coinmarketcap.com.
Steemit rewards or pays users who post content that gets multiple thumbs up from the site’s participants………………………………………..Full Article: Source

Why China’s currency could get wobbly

Posted on 13 July 2016 by VRS  |  Email |Print

China’s currency may be expected to stay relatively stable, but that’s based on myths about the mainland economy, Daiwa said. One myth was that currency depreciation wouldn’t make sense as it would hit China’s credibility and jeopardize efforts to internationalize the currency even as it was unlikely to boost exports much.
But Kevin Lai, Daiwa’s chief economist for Asia ex-Japan and a yuan bear, said that any depreciation of the yuan would be aimed at protecting the central bank’s balance sheet, with attempts to use the currency to boost export competitiveness likely playing second fiddle………………………………………..Full Article: Source

Currency speculation to continue driving Egypt

Posted on 12 July 2016 by VRS  |  Email |Print

Speculation over a further currency devaluation may continue to provide positive cues for Egypt’s stock market on Monday, while the upcoming second-quarter reporting season is likely to influence positioning in Gulf markets.
The main Egyptian index surged 4.7 percent on Sunday, its largest one-day gain in nearly four months, building on a 2.9 percent increase in the last session before the Eid al-Fitr holiday………………………………………..Full Article: Source

As yuan weakens, Chinese stock investors seek safety in Hong Kong

Posted on 12 July 2016 by VRS  |  Email |Print

Chinese investors are placing increasing bets on Hong Kong stocks, partly in search of a safe haven from the decline in the yuan, which fell last week to its lowest levels against the dollar since 2010.
The investment flows underline concerns that the slide in the yuan could increasingly fuel capital outflows from China, although official data suggests speculative capital flight is under control for now………………………………………..Full Article: Source

Brexit has uncorked a genie in the currency markets

Posted on 11 July 2016 by VRS  |  Email |Print

Britain’s vote to leave the European Union has “uncorked a genie” that is sending ripples through the currency markets and causing uncertainty to be the “new normal,” according to the latest research from currency analysts with Barclays.
In the bank’s latest Foreign Exchange Strategy note, Barclays argues that the huge uncertainty across the globe that has been triggered by the UK’s Brexit vote - the so-called “genie uncorked” - means that investors in the currency markets are in for a bumpy ride, and that what happens next is pretty much anyone’s guess………………………………………..Full Article: Source

‘Brexit’ could trigger a global currency war

Posted on 08 July 2016 by VRS  |  Email |Print

The quick rebound and relative calm in financial markets last week following Britain’s vote to leave the European Union were welcome relief to investors. Many surmised that markets were now looking past the so-called Brexit risks; some even declared victory.
After initially recovering from the shocking June 23 referendum results, stocks in Europe and Asia extended losses on Wednesday. While Wall Street ended up higher, US and Japanese government bond yields touched record lows as anxious investors continued to run for safety………………………………………..Full Article: Source

Englander: Sterling Now an Emerging Markets Currency (Video)

Posted on 08 July 2016 by VRS  |  Email |Print

Emerging-market stocks and currencies rebounded on further evidence the Federal Reserve will refrain from tightening policy anytime soon amid rising uncertainty about the outlook for growth at home and abroad. A gauge of developing-nation equities ended a two-day decline.
South Korea’s Kospi index led gains among benchmarks, and the won strengthened the most as a measure of currencies rose for the first time this week. Minutes of the Fed’s June meeting released Wednesday showed policy makers were losing confidence in the U.S. economy’s ability to withstand an interest-rate hike as they awaited Britain’s vote on exiting the European Union a week later………………………………………..Full Article: Source

What Countries Have a Commodity-Based Currency

Posted on 07 July 2016 by VRS  |  Email |Print

Commodities are a bit of an oddity in that they generally have low correlation to stocks, bonds, and currencies. The latter — currencies — has arguably the strongest relationship with commodities. Over the past couple of years, commodities have been the worst-performing asset class, while the U.S. dollar has been hitting all-time highs.
But that’s not the only relationship they share. Countries that rely heavily on commodity-based exports such as oil or precious metals have a currency that is tied to the price of the underlying commodity………………………………………..Full Article: Source

‘Brexit’ raises fears of global currency wars

Posted on 07 July 2016 by VRS  |  Email |Print

The quick rebound and relative calm in financial markets last week following Britain’s vote to leave the European Union were welcome relief to investors. Many surmised that markets were now looking past the so-called Brexit risks; some even declared victory. Not so fast.
After initially recovering from the shocking June 23 referendum results, stocks in Europe and Asia extended losses Wednesday. While Wall Street ended up higher, U.S. and Japanese government bond yields touched record lows as anxious investors continued to run for safety………………………………………..Full Article: Source

The Brexit currency domino effect isn’t over yet

Posted on 07 July 2016 by VRS  |  Email |Print

That the British pound is headed lower is now a forgone conclusion. Leaving the EU will cause a negative economic multiplier effect for Britain as investment flows are likely to diminish dramatically in the months ahead, until the uncertainty is cleared up.
Ultimately, a lower British pound could stimulate the British economy in the long term, but over the next year or so, the British economy could get quite a bit messier. The British pound — or “cable,” as traders like to call it harkening back to the days when currency quotes traveled via telegraph cable on the bottom of the Atlantic Ocean — registered a rather peculiar trading pattern, an outside-down month………………………………………..Full Article: Source

It’s Dollar’s Time Now Post-Brexit, Top Currency Forecaster Says

Posted on 06 July 2016 by VRS  |  Email |Print

For currency strategists, the past quarter was all about Brexit and calling the pound correctly. Now, the most-accurate forecaster is counting on a dollar resurgence to stay ahead of the pack.
Julius Baer Group Ltd. topped Bloomberg’s latest major-currency rankings by posting some of the most bearish sterling forecasts in the run-up to the referendum on Britain’s European Union membership. It also beat its competitors in predicting the yen’s advance as a haven — a mantle, the Swiss lender says, that’s about to be seized by the greenback………………………………………..Full Article: Source

Forget Brexit, China’s currency is falling again

Posted on 06 July 2016 by VRS  |  Email |Print

Turmoil triggered by Brexit may have masked a more troubling market move — China’s currency is falling again. Since British voters’ shock decision to leave the European Union, the yuan has lost 1.3% against the dollar.
That’s small compared with the 12% plunge in the British pound since the EU referendum, but it contributed to the yuan’s biggest quarterly loss on record against the dollar — down nearly 3% in the three months to June 30. The yuan was trading around 6.67 to the dollar on Tuesday, its lowest level since December 2010………………………………………..Full Article: Source

China’s Currency Valuation: Room For Improvement

Posted on 06 July 2016 by VRS  |  Email |Print

The RMB has officially been valued to a basket of currencies within a managed floating exchange rate regime since 2006, but the process of exchange rate reform, especially appreciation against the US dollar, was interrupted by the 2008 financial crisis.
Now the RMB is, after the August 2015, more closely tracking a basket of currencies associated with its major trading partners, but there is still room for improvement in expanding both transparency and the role of market forces………………………………………..Full Article: Source

Swiss National Bank ramps up currency intervention after Brexit

Posted on 05 July 2016 by VRS  |  Email |Print

The Swiss National Bank (SNB) went on its biggest foreign-currency buying spree since January 2015 in the wake of Britain’s vote to leave the European Union, data showed on Monday. Commercial and other deposits with the SNB rose to 507.514 billion Swiss francs ($520.69 billion) from 501.231 billion the previous week, indicating the bank had bought foreign exchange on the market and then credited depositors’ accounts.
The bank is using negative rates, coupled with an unspecified amount of foreign currency purchases, to weaken the franc and protect exports to the euro zone, Switzerland’s biggest trading partner………………………………………..Full Article: Source

Brazil Economists Forecast Slower Inflation on Stronger Currency

Posted on 05 July 2016 by VRS  |  Email |Print

Brazil economists reduced their 2016 inflation forecast for the first time in seven weeks as they foresee a stronger currency this year and next. Economists estimate consumer prices will rise 7.27 percent this year, down from the current level of 9.32 percent, according to a central bank survey for the week ending July 1.
They also lowered their 2017 year-end inflation forecast for the first time since mid-May, to 5.43 percent. They see the real ending the year at 3.46 per U.S. dollar, from 3.6 the prior week………………………………………..Full Article: Source

Brexit? What Brexit? Currency niggles Bremain but let the rally resume

Posted on 04 July 2016 by VRS  |  Email |Print

Perhaps global financial markets are becoming a little punch drunk because they mostly shrugged off the Brexit-inspired alarms with some astounding rallies, in particular the FTSE 100 Index gaining 7.2% last week.
That was the British market’s best weekly performance since February 2011. The New Zealand share market went along for the ride, the Top 50 Index jumping 3.9%. However, currency markets are still pointing to trouble ahead for the British economy, producing the unwanted side effect of boosting the New Zealand currency………………………………………..Full Article: Source

Britain now has what everyone else wants – a weak currency

Posted on 04 July 2016 by VRS  |  Email |Print

Since the EU referendum result, the pound has fallen. But a weaker currency is exactly what the Bank of England wants, says John Stepek. Here’s why. There’s not a central banker in the world who wants a strong currency at the moment.
The US Federal Reserve has held off raising rates because it doesn’t want to see the dollar any stronger. The Chinese want the renminbi to devalue (and they’re quietly, gradually managing it). The Bank of Japan is looking in despair at the strengthening yen. The European Central Bank is crossing its fingers and hoping that the euro won’t rally………………………………………..Full Article: Source

What Currency to Buy After Brexit? Try the Brazilian Real

Posted on 01 July 2016 by VRS  |  Email |Print

In the wake of Brexit, investors expected the traditional safe-haven currencies, the yen and Swiss franc, to soar. But it was the Brazilian real that really took off. An unlikely safe-haven, the real has risen by 4% against the U.S. dollar since last Thursday, the day the British voted to leave the European Union.
The Japanese yen is up a less impressive 2% and the Swiss franc was actually about 2% lower than a week ago, in part due to the Swiss central bank intervening to prevent the currency from surging………………………………………..Full Article: Source

Pound at Risk of Fall in Reserve-Currency Ranks After Brexit

Posted on 01 July 2016 by VRS  |  Email |Print

The pound is at risk of fading from the top ranks of central-bank asset holdings following Britain’s decision to leave the European Union. The world’s foremost reserve currency a century ago, sterling has been overtaken by the dollar and the euro, mirroring the U.K.’s waning influence in the global economy.
Now its 5 percent share of foreign-exchange reserves is in danger of shrinking further because of Brexit, compounded by forces including China’s push to bolster the international role of the yuan………………………………………..Full Article: Source

China’s Currency Confusion

Posted on 01 July 2016 by VRS  |  Email |Print

One thing is for sure, the Chinese yuan just had its worst drop on record ever since the last currency in 1994. The yuan lost 2.9 percent against the dollar since the end of March to 6.64 on June 30.
Another sure thing: Brexit didn’t help as the yuan devalued almost one percent in a single day on the Monday after the historic vote. This is where the certainties end and where speculation and confusion starts………………………………………..Full Article: Source

Japan should not resort to currency depreciation

Posted on 30 June 2016 by VRS  |  Email |Print

In the midst of the fallout from the UK’s decision to leave the EU last week, Japan has become a haven for investors. Instead of providing reassurance to Japanese policymakers, this flight to safety is threatening domestic growth and monetary stability. How should the authorities respond?
Prime Minister Shinzo Abe launched “Abenomics”, shortly after his victory in late 2012. Thereafter, the yen depreciated significantly, providing helpful relief to an economy struggling with chronic deflation and the aftermath of the global financial crisis……………………………………….Full Article: Source

Currency wars pose ‘lose-lose’ threat after Brexit vote, warns ECB’s Mario Draghi

Posted on 30 June 2016 by VRS  |  Email |Print

The world is at risk of a currency war after the Brexit vote, as each economy seeks to devalue their own money in a bid to boost growth, Mario Draghi has warned.
The European Central Bank president urged colleagues across the globe to coordinate their efforts, in order to avoid competitive currency devaluations between economies, which could undermine attempts to boost world growth……………………………………….Full Article: Source

JP Morgan ‘expecting Scottish independence and new currency’

Posted on 30 June 2016 by VRS  |  Email |Print

JP Morgan has confirmed that it expects Scotland to vote Yes in a second independence referendum as well as introducing its own currency before the UK leaves the European Union in 2019.
Bank economist Malcolm Barr said in a note to clients: “Our base case is that Scotland will vote for independence and institute a new currency at that point (2019).” Mr Barr said that the ‘pressure to hold a new referendum’ would arise following the UK’s Brexit……………………………………….Full Article: Source

Brexit and currency war

Posted on 29 June 2016 by VRS  |  Email |Print

In the aftermath of Britain’s vote to leave the European Union last week, fears are mounting that the world might plunge into a currency war. On Monday, China’s central bank cut the yuan’s fixed rate by almost 1 percent to 6.6375 to the dollar as the greenback surged after the Brexit vote. Monday’s fix was the lowest level since December 2010.
Japan is also ready to act as the yen, one of the haven assets bought in times of turmoil, hit a 32-month high of 99.02 per dollar Friday after the vote. Japanese Prime Minister Shinzo Abe said Japan would carefully watch foreign exchange and stock markets, but his remark was taken as indicating that the world’s third-largest economy could intervene in the currency market soon to put the brakes on the surging currency………………………………………..Full Article: Source

Currency volatility makes careful planning essential

Posted on 29 June 2016 by VRS  |  Email |Print

The instability of exchange rates against the US dollar has reduced the number of speculators in the market and instead made currency hedging a part of business strategy. Michael Judge, head of corporate clients at currency provider OFX, says the large movements of the US dollar against the Aussie in the past 18 months have made currency a business input rather than an opportunity to make profits or play the market.
He says in the month to May 25 the Aussie slipped from $US0.78¢ to 0.71.5¢, representing a slide that could eradicate most of an importer’s profit margin if they settled invoices at spot rates………………………………………..Full Article: Source

Currency market volatility may stay

Posted on 29 June 2016 by VRS  |  Email |Print

The recent referendum by the British against staying in the European Union, which resulted in Prime Minister David Cameron resigning from office, also caused severe volatility in the global financial markets with the currency markets being the worst hit.
The first impact was that the British sterling pound crashed 8% against the dollar over the previous trading session as soon as the verdict of British wanting to exit the European Union was out. The British currency touched the lowest levels in 30 years adding uncertainty to the future value of the pound. It also dipped sharply against the yen. Some have even predicted that the pound would crash more severely than global stocks over the next year. ……………………………………….Full Article: Source

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

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