The ruble sank the most in two months as oil fell and investors bet on declines after the Finance Minister supported a weaker currency. The ruble dropped 1.1 percent against the central bank’s dollar-euro basket, the most since April 17, to trade at 36.8825 by 1:26 p.m. in Moscow. The yield on OFZ ruble bonds due 2027 rose eight basis points to 7.64 percent.
Russia is weighing a weaker ruble to spur flagging growth and is considering buying foreign currency on the market before sending oil and gas revenue to its Reserve Fund, Finance Minister Anton Siluanov said in an interview last week. Crude oil, Russia’s main export earner, declined 0.2 percent to $105.26 a barrel in London. The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region’s 10 most-traded currencies, slid to the lowest level since Sept. 12………………………………………..Full Article: Source

Brazil’s real touched a four-year low, prompting the central bank to intervene for a second straight day as a report showed higher-than-forecast inflation.
Central bank President Alexandre Tombini said policy makers are working to reduce the inflationary pressure that may stem from the currency’s decline. Wholesale, construction and consumer prices rose 0.74 percent in the 20 days starting May 21, the Getulio Vargas Foundation reported. The median forecast of 13 analysts surveyed by Bloomberg was for a 0.65 percent increase in the IGP-M index………………………………………..Full Article: Source

Asian currencies have been battered lately by talk of the U.S. Federal tapering its massive stimulus program and analysts expect the pummeling to continue as other major drivers that led the currencies to appreciate now face pressure.
On top of funds flowing out of Asia on worries about the Fed unwinding its asset-purchase program, Citi Research expects sovereign risk re-assessment, weakness in the Japanese yen, and deteriorating current-account deficits to weaken regional currencies further in the months ahead………………………………………..Full Article: Source

Effective July 1st, the United States has authorized new sanctions directly targeting the already-devalued Iranian rial with penalties for transacting or holding the currency outside of Iran. This represents the first time that the U.S. has focused specifically on the Iranian monetary unit itself and the ninth set of sanctions President Barack Obama has imposed against Iran.
White House Press Secretary Jay Carney said, “This new action targets Iran’s currency, the rial, by authorizing the imposition of sanctions on foreign financial institutions that knowingly conduct or facilitate significant transactions for the purchase or sale of the Iranian rial, or that maintain significant accounts outside Iran denominated in the Iranian rial.”……………………………………….Full Article: Source

Gold cannot be printed or manufactured in contrast to the currency. That’s why over the long term it has kept its value as the ultimate currency. There can be no “gold war.” However, we often hear about a currency war. Sounds familiar, where did we hear this before?
The phrase “currency war” was coined by Brazilian Finance Minister Guido Mantega after the financial crisis of 2008. The idea is that highly indebted nations weaken the value of their currency by cutting interest rates down to zero and printing fiat currency in order to gain trade advantages (cheaper products to export) and to pay less debt service on their bonds……………………………………..Full Article: Source

The euro is emerging as an unlikely oasis in the latest bout of market turmoil. Assets ranging from Japanese stocks to emerging-market bonds to U.S. Treasurys have slumped this spring, as investors brace for the possible pullback from easy-money policies by the world’s major central banks.
But the euro has largely avoided the volatile trading that has whipsawed other currencies, including the dollar and the Japanese yen, gaining about 4% against the greenback over the past four weeks to trade late Friday at $1.3345, near a four-month high……………………………………..Full Article: Source

Market manipulation aficionados have had a field day since the global financial crisis, but short-selling attacks in markets as diverse as equities and gold and the London Interbank interest-rate fixing scandal would be put in the shade if this week’s reports that currency trading has been systematically rorted were confirmed.
They probably won’t be, however. At least one regulator is investigating, but the $US3.6 trillion ($3.76 billion) foreign exchange market is probably too big to rig, or at least, too big to rig effectively……………………………………..Full Article: Source

When most people think of precious metals, gold is what springs to mind. Silver, the less glamorous shiny metal, gets forgotten. If it is remembered at all, the temptation is to lump it in with the yellow stuff as the Kardashians of the financial world; pretty to look at and interesting at times, but fundamentally of no use to society.
This is the case with gold, and I would therefore argue that investors should look at gold more as a currency than a commodity. Silver, on the other hand, does have significant industrial uses. Indeed, industrial applications typically take up around half of the annual global production………………………………………..Full Article: Source

As the Indian currency slides to an all-time low against the dollar, the Indian Finance Minister is trying to bolster confidence in the country’s flagging economy. The rupee’s slide this week came on the heels of steady losses over the last month. Overall the Indian currency has slipped by 8 percent since the start of May.
India’s Finance Minister P. Chidambaram Thursday tried to calm fears that the falling currency will put further strain on the flagging economy. He said India’s huge trade imbalance has triggered the slide. The current account deficit as it is called, is driven by the country’s massive oil and gold imports………………………………………..Full Article: Source

Japan’s Central Bank may want a weaker currency, but the Reserve Bank of India wants nothing to do with a weaker rupee. On Tuesday, the RBI stepped in to save the currency with major currency purchases as the rupee slipped to a new low.
Weaker currencies don’t always make a country more competitive, at least not immediately. It’s a combination of things: labor costs, location, scale. But one thing is for sure, since the 2008 crisis there has been what some call a currency war going on. The big guns are from the Fed, weakening the dollar for a number of reasons. One is to help make U.S. goods cheaper to acquire. Then came the European Central Bank. Call that Currency War I………………………………………..Full Article: Source

The temptation for central banks to engage in competitive devaluation is fading as rising Treasury yields diminish the allure of assets in emerging markets, Bank of Israel Governor Stanley Fischer said.
“All those who’ve been worrying about so-called currency wars should be feeling better,” Fischer told reporters in London late yesterday. “I am happy to see these rises in Treasury yields because we’ve been dealing with capital inflows which are not particularly wanted.”……………………………………….Full Article: Source

The Canadian dollar rose to its highest point in almost three years versus its Australian counterpart as traders speculated the North American economy will lead global growth. Canada’s currency fluctuated against the U.S. dollar as oil dropped as much as 1.8 percent before a report forecast to show stockpiles fell last week in the U.S., the largest customer of Canadian crude.
Canada posted its biggest jobs gain in a decade and the fastest pace of new home construction in 13-months in May, while stronger U.S. data has sent bond yields higher. The loonie gained versus the Aussie after Australia home-loan approvals grew at the slowest pace in three months………………………………………..Full Article: Source

In Brazil they just conducted a swap operation to try and support t the currency as the Brazilian real moved to 2.16 intra-day lows before the operation. If they are in trying to support the currency now after spending the last 18 months trying to weaken, this is a bit of cruel irony for Finance Minister Mantega, President Rousseff, and the Brazil Central Bank.
Inflation which was not out of control is gaining momentum after a 9% move in the currency in in two months. Now while S&P rating agency and other credit agencies are lowering their outlook for Brazil the government’s game plan is uncertain as the market ties their hands………………………………………..Full Article: Source

It looked like the world’s easiest trade. Hedge funds made billions on it. Some investors made 30 per cent in a matter of months. Yet selling Japan’s currency has lately become a headache.
Just two weeks after the yen hit its weakest level against the dollar since the collapse of Lehman Brothers in 2008, the dollar-yen trade is under attack……………………………………Full Article: Source

The yen was sharply higher on Thursday as a rout in Japanese stocks forced investors out of popular carry trades, while commodity currencies were under fierce pressure with the Australian dollar wallowing at 19-month lows.
The moves came as a closely watched report showed hiring by U.S. firms was sluggish in May, raising the risk that Friday’s non-farm payrolls could disappoint……………………………………Full Article: Source

Commodities are facing a choppy 2013, with the volatility intensifying in recent weeks. Products in a variety of segments have seen rough sessions due to a strong dollar and uncertain demand in many key markets. This is especially true given some of the fundamental factors surrounding the global economy, and the outlook going forward.
While the U.S. economy is improving, China is seeing sluggish economic growth, and Europe is still in recession. Still, we are seeing an increased appetite for equities over commodities, and this trend could continue should these broad economic trends hold………………………………………..Full Article: Source

Latvia is set to become the 18th country to adopt the euro as its currency, following an EU decision that the country now satisfies the conditions for joining the Eurozone.
Latvia will adopt the euro from January 1st 2014, and as a full euro member, Latvia will be able to take part in all the key decisions in the eurogroup of ministers and the board of the European Central Bank………………………………………..Full Article: Source

The South African rand led a broad-based slide among emerging-market currencies Wednesday as investors grew increasingly jittery ahead of a critical U.S. jobs report. Investors are gearing up for the prospect of Federal Reserve tapering its bond-buying stimulus program.
Expansive Fed monetary policy has been associated with a weaker U.S. dollar and excess market liquidity that has driven investors to seek higher yields in emerging markets. A strong nonfarm payrolls report on Friday would likely affirm expectations of the Fed unwinding such stimulus some time this year, which would remove a pillar of support for emerging-market currencies………………………………………..Full Article: Source

The US has unveiled fresh sanctions against Iran, targeting its currency, as it increases the pressure on Tehran to abandon its nuclear programme. These include penalties on anyone facilitating “significant” transactions in the rial or holding significant amounts of the currency outside Iran.
A US official said the move would force institutions to dump rial holdings and weaken the currency further. This is the first time the US has directly targeted the Iranian currency………………………………………..Full Article: Source

Five countries on emergency aid, six consecutive quarters of economic contraction and 19 million people out of work haven’t dimmed the euro’s allure for small states that, like Latvia, have nowhere else to turn.
Latvia is expecting today to be put on the path to becoming the 18th country to use the euro at the start of 2014, binding it deeper into the western European economy and providing an extra layer of insulation against Russia, its former imperial overlord………………………………………..Full Article: Source

When the Brazilian real was strengthening like gangbusters against the dollar, all the way to R$1.55 back in July of 2008, the government both loved it and hated it. They loved it because it meant the world loved Brazil and Brazil, with its nagging (and misplaced) inferiority complex, was mighty proud of its strong currency.
Fast forward to the Lehman Brothers and pending fall out in late 2008-09 and the strong currency became a curse. It became part of the “currency war”, a term made quite popular over the last two years by Brazilian Finance Minister Guido Mantega………………………………………..Full Article: Source

Users in the mushrooming world of digital currencies were in for a shock, when Liberty Reserve was accused of money-laundering operations amounting to $6 billion. “If Al Capone were alive today, this is how he would be hiding his money,” said U.S. prosecutors about Liberty Reserve, the popular digital currency site.
Liberty Reserve described itself as the “oldest, safest and most popular payment processor… serving millions all around a world.” However, the users in the mushrooming world of digital currencies were shocked on Friday, when Liberty was indicted by U.S. regulators on charges of money-laundering operations amounting to $6 billion………………………………………..Full Article: Source

Australian bonds have been a darling of the strategic bond sector for some time but as the Australian dollar (AUD) – the world’s most overpriced currency on a trade weighted basis – breaks down, is the Oz trade over?
Some of the sector’s biggest names, such as the Citywire-A rated Fidelity Strategic Bond manager Ian Spreadbury, Jupiter Strategic Bond manager Ariel Bezalel and Pimco have all held significant positions in the country’s debt in the last 12 months. While some of those have already been unwound, as much as 70% of Australian debt remains in foreign hands, which, in itself, is one of the structural weaknesses now creating headwinds………………………………………..Full Article: Source

The Bank also expects USD rally in the second half of 2013 with its economists providing for a EUR/USD forecast of 1.23 for one year. The bank states that in the context of this happening, a broad based rally in commodities would be few and far between.
The year so far has seen commodities under-performing equities. Dollar strength is enduring and investors in general are disenchanted with commodities. Now, will these underlying structural trends continue to take commodities down? Barclays seem to have an answer………………………………………..Full Article: Source

With each year the American dollar is shrinking in percentage as the world’s currency supply. The implications could mean a serious decrease in the dollar’s influence as countries around the world look for alternatives.
When compared to other prominent world currencies, the dollar has been experiencing a 15-year low. That’s according to the International Monetary Fund. And, this indicates that more countries are willing to use other forms of currencies to do business. Experts say it’s a fault of the US banking system and the Federal Reserve………………………………………..Full Article: Source

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Everyone loves a weaker currency, right? There’s a currency war on, don’t you know. Well, Australians are not necessarily big fans, it turns out. The Australian dollar has been whacked of late. From the heady heights of $1.05 against its U.S. cousin last month, it made it almost as low as $0.95 earlier this week.
This is not just an Australian phenomenon, of course. The U.S. dollar has been on a tear and has ripped down any number of other currencies in its wake. Still, the Aussie has drawn its fair share of attention, and the currency has its own drags………………………………………..Full Article: Source

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The received wisdom is dollar strength = weaker emerging market currencies. See here for my colleague Mike Dolan’s take on this. But as Mike’s article does point out, all emerging markets are not equal. It follows therefore that any waves of dollar strength and higher U.S. yields will hit them to varying degrees.
ING Bank says in a note sent to clients on Tuesday that emerging currency gains in recent years have been closely tied to foreign investments into domestic bond markets. Recent years have seen a torrent of inflows into local debt, driving down yields on the main GBI-EM index and significantly boosting its market value……………………………………Full Article: Source

The crackdown on money-transfer service Liberty Reserve highlights the growing challenges virtual currencies face as they gain wider use among businesses and consumers.
Such alternative payment methods have the potential to drive down or eliminate the processing costs businesses pay when they accept credit and debit cards. But, recently, some virtual-money firms have been mired in controversy over their lack of compliance with U.S. financial laws and allegations some are involved in illegal activities, such as buying and selling drugs……………………………………Full Article: Source

The natural ratio of the occurrence of silver to gold in the ground is typically estimated at roughly nine ounces of silver to one ounce of gold, and yet the recent trading price ratio of 62 to one is almost seven times higher.
After contemplating this curious anomaly, one is left wondering if comparisons between gold and silver may be as fruitful as comparing silver investment demand and silver industrial demand…………………………………..Full Article: Source

Commodity currencies fell and haven currencies gained ground following a volatile week in the global foreign exchange markets that saw investors take profits on bets that the US dollar would strengthen.
The Japanese yen and Swiss franc rose against the US dollar for the second day after expectations that the US Federal Reserve could slow its bond-buying programme led to caution in the markets. Sharp falls in Japanese equities had a knock-on effect on the yen, which strengthened against other major currencies…………………………………..Full Article: Source

The recent sell-off in commodity currencies triggered by a fall in demand for resources and the rush to buy U.S. dollar, may continue, say analysts, as the need to diversify capital dwindles. Commodity prices have been hammered by worries that China’s economic recovery is slowing, along with the U.S Federal Reserve hinting at a possible cutback to its stimulus plans, which is boosting the U.S. dollar.
Richard Yetsenga, head of global markets research, ANZ said the trend of diversifying capital by buying commodity currencies is reversing and weakness in this asset class will continue…………………………………..Full Article: Source

The United States is in the midst of a surge in energy production, one that could realign one of the market’s most reliable barometers: the inverse link between the U.S. dollar and oil. Gnerally speaking, what’s good for the dollar tends to be negative for oil, and vice versa—but the U.S. oil boom might be altering that rule of thumb.
With the U.S. suddenly awash in oil and gas, it has raised the question of whether the greenback can join the ranks of the dollars of Canada and Australia or the krone of Norway as a “commodity currency”—which tend to correlate directly with the price of oil…………………………………..Full Article: Source

Fiat currencies are paper monies issued andcirculated by government legislation and decreed as a country’s legal tender tofunction as a medium of exchange for all transactions of goods and serviceswithin its economy. Only the federalgovernment has the power and the authority to issue currency notes fordistribution throughout the nation.
Fiatcurrencies, such as those currently in circulation within the world’s majoreconomies, such as the United States (Dollar), the United Kingdom (Pound),Japan (Yen), China (Yuan/Renminbi) and the European Union (Euro) are ‘promises to pay’, backed solely by ‘the full faith and credit’ of theissuing country, or countries……………………………..Full Article: Source

Currency strength due to stimulus measures in the developed world is currently Latin America’s Achilles’ heel, though the region’s macroeconomic management is a bright spot, the head of the United Nations’ body for the region said on Monday.
“I think the factor that most worries Latin America is the strength of its currencies,” said Alicia Barcena, the Economic Commission for Latin America and the Caribbean’s (ECLAC) executive secretary, said……………………………..Full Article: Source

Currency strength due to stimulus measures in the developed world is currently Latin America’s Achilles’ heel, though the region’s macroeconomic management is a bright spot, the head of the United Nations’ body for the region told Reuters.
Monetary easing in Europe, the United States and Japan has led investors to hunt for better returns in the emerging world, strengthening Latin America’s currencies and damaging the competitiveness of its crucial exports………………………………..Full Article: Source

The eurozone is now in its longest ever recession — a stubborn slump that has surpassed even the calamity that hit the region in the financial crisis of 2008-2009. The European Union statistics office said Wednesday that nine of the 17 EU countries that use the euro are in recession, with France a notable addition to the list. Overall, the eurozone’s economy contracted for the sixth straight quarter, shrinking by 0.2 percent in the January-March period from the previous three months.
Though the contraction is an improvement on the previous quarter’s 0.6 percent decline, it’s another unwelcome report for the single-currency bloc as it grapples with a debt crisis that has prompted governments to slash spending and raise taxes………………………………………..Full Article: Source

The world’s leading finance ministers gave their tacit approval to the soaring US dollar and plunging Japanese yen at the weekend, but international divisions over economic strategy and European banking union remained unresolved.
After an informal gathering of the Group of Seven rich economies outside London, participants reaffirmed their commitment not to use economic policy to seek weaker currencies and did not conclude Japan was breaking that pact yet…………………………………….Full Article: Source

Unusual and rare objects always seem to be a favorite with collectors; the weirder, the better. The same applies to money. Some currencies don’t even look like our regular perception of what money should be, but served as legit cash at some point in history.
The following are the top 10 weirdest currencies the world has seen so far. Top 10: Wooden bills: Wooden bills may be rough on your wallet, but they were one of the best ways for Germany to rebuild its economy after World War I (1914-1918)…………………………………….Full Article: Source

The “mora” is one of many people’s currencies springing up in Spain as the economic crisis advances, inspired by old methods such as barter or time-banks. The mora has been around now for a year, and there are over 400 users throughout some 10 municipalities in the Sierra Norte de Madrid region. Several establishments have also signed up to accept payment in moras.
The moras system follows the Local Exchange Trading Scheme or LETS model that aims to reduce the negative consequences of globalisation in local economies………………………………………Full Article: Source

It may be hard to accept, given the yen’s recent sharp fall, but the Japanese unit remains in the eyes of many a haven currency. The dollar’s rise above Y100 is not just a function of Bank of Japan easing, but also the benign market of late.
Bursts of angst can still see the yen gain ground. As can the Swiss franc, a haven peer, which may now also face a distinct weakening trend………………………………………..Full Article: Source

Unilever (ULVR), the seller of Lipton tea and Dove shampoo, expects Southeast Asia’s currencies to strengthen further against the U.S. dollar and euro in the next few years as foreign investment boosts economic growth.
“I would go long on the currencies in Southeast Asia,” Peter Ter-Kulve, the London- and Rotterdam-based company’s chief executive officer for Southeast Asia, said in an interview on May 10. “Most of the monetary policies are very robust at the moment and the currencies are a testament to the fundamental strength of the economies we are in.”………………………………….Full Article: Source

Emerging Asian currencies such as the Malaysian ringgit have come back with a vengeance, and their gains might not be done yet. The Malaysian ringgit has gained more than 2% against the dollar so far this month, after the country’s ruling coalition led by Prime Minister Najib Razak won recent national elections.
The South Korean won has advanced more than 1.5% so far this quarter, as geopolitical tensions with North Korea eased and investors jumped to buy the won at more-attractive levels………………………………….Full Article: Source

Britain is blessed in having an integrated economy and the ability to depreciate sterling. The eurozone, by contrast, is cursed by its fragmented nature, internal contradictions and fixed exchange rates for individual members.
Stuff like this is said a lot in the UK. Lord Lawson, a former chancellor, even argued this week Britain would be better off outside the EU. We should be more careful………………………………………..Full Article: Source

The Australian, Canadian and New Zealand dollars may be set for a decline, dragged down by a slowdown in China and a sharp fall in commodity prices. Tuesday’s 0.8 percent slide by the Aussie versus the U.S. dollar, prompted by a rate cut, was just a foretaste.
The Australian and New Zealand dollars are up 70 percent against the U.S. dollar since late 2008, driven up by near-zero rates in many developed countries. The euro zone crisis also led investors and central bank reserve managers to seek higher-yield, low-risk assets………………………………………..Full Article: Source

Many investors study supply and demand statistics to figure out where they think the oil price is going. But by far, the biggest factor that determines the oil price is the US dollar, says Donald Dony, who pens The Technical Speculator investment newsletter.
“The US dollar is absolutely pivotal for commodity prices,” he says. To pros in the investment game, that is a truism; obvious. But most investors underestimate the background impact the greenback has on oil prices………………………………………..Full Article: Source

Brazilian exporters are facing a major crunch when it comes to both cost and revenue, according to Murilo Ferreira, president of mining giant Vale, Brazil’s largest single exporter.
“On the one side, Brazil’s currency is still out of line,” Mr. Ferreira said in a speech to investors Tuesday. “On the other side, our wage costs are rising faster than inflation.”……………………………………….Full Article: Source

Mukesh Kumar Chhaganlal said he tried to warn his manager at UBS AG about the “increasingly unrealistic” currency rates being set last year for the Indonesian rupiah against the dollar.
His manager told him nothing could be done because “there was no way to control the market or how people set the rates on the market”, according to court documents Mukesh filed in Singapore recently in his wrongful termination suit………………………………………..Full Article: Source

Oskar Lafontaine, the German finance minister who launched the euro, has called for a break-up of the single currency to let southern Europe recover, warning that the current course is “leading to disaster”.
“The economic situation is worsening from month to month, and unemployment has reached a level that puts democratic structures ever more in doubt,” he said………………………………………..Full Article: Source

It is indisputable that China is over-issuing currency. But the reasons behind China’s massive liquidity growth – and the most effective strategy for controlling it – are less obvious.
The last decade has been a “golden age” of high growth and low inflation in China. From 2003 to 2012, China’s annual GDP growth averaged 10.5%, while prices rose by only 3% annually. But the unprecedented speed and scale of China’s monetary expansion remain a concern, given that it could still trigger high inflation and lead to asset-price bubbles, debt growth, and capital outflows………………………………………..Full Article: Source

A move to a separate Scottish currency could see Scottish-based savers and depositors rushing for the Border to ensure their cash stays in sterling, a leading economist has warned. After pro-independence supporters criticised Alex Salmond’s “keep the pound” policy, a major conference in Edinburgh heard that, while a switch to a new Scottish currency was feasible, it could trigger turmoil in high-street banks.
Dr Angus Armstrong, the director of macroeconomic research at the National Institute of Economic and Social Research, said people in Scotland – especially firms and individuals with substantial savings – would ask themselves: “Do you think the Scottish pound would be lower than the UK pound?”……………………………………….Full Article: Source