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Commodities Briefing - Category | Currencies more

Norway c.bank chief says currency drop beneficial in several ways

Posted on 20 November 2014 by VRS  |  Email |Print

The weakening of the Norwegian crown currency during the last several months is beneficial in several ways, Central Bank Governor Oeystein Olsen said in a speech on Wednesday.
“There has undoubtedly been a close correlation between the fall in the oil price and the weakening of the crown that’s taken place this autumn, and that may be beneficial in several ways,” Olsen told a business conference. He did not elaborate on the benefits. He also pointed out that the currency had strengthened slightly since hitting a five-year low earlier this month………………………………Full Article: Source

Skeptic says bitcoin will “always be currency of the future”

Posted on 19 November 2014 by VRS  |  Email |Print

Remember when bitcoin was going to disrupt the world’s banking system? That was two years ago and, while new payment platforms like Venmo and Apple Pay have gained traction, virtual currencies now feel more like a fad than a phenomenon.
At least that’s the view of Felix Salmon, a financial blogger and early bitcoin skeptic, who did his best to dump cold water on a room of alt-currency enthusiasts gathered Monday at a Bloomberg event titled “Bitcoin: Beyond the Currency” in New York City……………………………………Full Article: Source

Nigeria’s naira drops to record low

Posted on 19 November 2014 by VRS  |  Email |Print

Nigeria’s naira weakened to a record low against the dollar as promises by the central bank to defend the currency and government plans to cut spending failed to stabilise the market hit by a fall in oil prices.
There is “still no reprieve for the naira despite the positive local developments at the start of the week,” Gareth Brickman and Catherine Bennett, Johannesburg-based strategists at ETM Analytics, said……………………………………Full Article: Source

Argentina receives second currency swap from China -official source

Posted on 18 November 2014 by VRS  |  Email |Print

Argentina’s central bank on Monday received the second tranche of a currency swap from China worth $500 million, an official source familiar with the transaction told Reuters. The South American country received a first installment worth $814 million in late October.
The swap will allow Argentina to bolster its foreign reserves or pay for Chinese imports with the yuan currency at a time when weak export revenues and an ailing currency have put its foreign reserves under pressure…………………………………Full Article: Source

How can Isis afford its own currency?

Posted on 17 November 2014 by VRS  |  Email |Print

Age: Not-quite-newly-minted. Appearance: Golden. Silvery. Coppery. You make it sound as if Isis is about to set up its own currency. That’s because it is. I’m very clever like that. I meld my thoughts to words and words to thought, et voilà!
Can it do that as a self-declared state that no one recognises? It can. It’s going to. It has said so in a statement. The largest value coin, the five dinar, will contain 21.25g of gold (worth around £490 at time of going to press) and the lowest will be a 10g copper coin worth about five pence……………………………………Full Article: Source

Currency trading: Fixed penalty

Posted on 17 November 2014 by VRS  |  Email |Print

Once again, a handful of the world’s largest banks have agreed to pay vast amounts of money to settle an investigation, this time concerning the manipulation of benchmarks used in the trading of currencies. American, British and Swiss regulators clubbed together to squeeze six banks for $4.3 billion between them. Yet more fines may be in the pipeline.
The deal announced on November 12th follows a now familiar pattern: regulators release e-mails or instant messages they have harvested that indicate sleazy activity in an important market; banks issue statements that are contrite, emphatic about a commitment to moral values yet vague about what exactly occurred; no one charges any individuals with any crimes and lots of questions are left unanswered, including how the regulators calculated the penalties (Britain’s FCA being an honourable exception)……………………………………Full Article: Source

The U.S. Dollar’s Crucial Role in the Commodity Cycle

Posted on 14 November 2014 by VRS  |  Email |Print

The U.S. dollar is falling and it’ll ultimately crash and go down to near zero. Not true… that’s what the gold bugs keep harping on but it’s not true. This misinformation is very representative of what’s going on in the global economy and it’s almost as bad as the liberal economists and analysts who believe we should just print as much money as necessary to keep the economy growing.
Let’s just start with the truth. The U.S. dollar did fall dramatically from 1985 into early 2008. And it fell by a staggering 58%. That’s a major devaluation for a reserve currency that’s usually valued higher than normal due to the fact that dollars are bought at a higher pace because they’re used for global transactions…………………………………Full Article: Source

Latam currencies drop with commodities prices

Posted on 14 November 2014 by VRS  |  Email |Print

Latin American currencies mostly weakened on Thursday due to falling commodities prices, with Brazil’s real pressured further by uncertainty over future economic policy. The MSCI Latin American stock index fell for the third session in four.
Prices for commodities, which make up the bulk of Latin American exports, edged lower on Thursday. They are down about 13 percent since the start of July and are currently hovering at their lowest level since June 2012. Most of that has been driven by excess supply and weaker growth in China, a major purchaser of products such as soybeans, iron ore and copper. Data on Thursday showed China’s economy lost more momentum in October and is on track to grow at its weakest pace in 24 years. ………………………………..Full Article: Source

How to game the $5.3 trillion currency market

Posted on 13 November 2014 by VRS  |  Email |Print

Gaming the global financial system is easy when you get some help from your friends. British and U.S. regulators revealed Wednesday that chummy currency traders at a handful of major banks used private online chatrooms to coordinate their buying and selling to shift currency prices in their favor.
Here’s how they did it: 1. Make friends: According to the U.K. Financial Conduct Authority, traders met in online chatrooms to exchange information with trusted colleagues from other banks. These traders called themselves “the 3 musketeers” and the “A team,” among other names………………………………………..Full Article: Source

The ruble tumbles with the oil price

Posted on 13 November 2014 by VRS  |  Email |Print

The Russian currency has lost a great deal of value, and the central bank in Moscow can no longer afford to prop it up. Russia’s dependency on commodity energy exports has become more apparent than ever.
For Russians, it’s a nightmare come true: The oil price has plunged, falling around 30 percent in just a few months. It may come as a blessing for Western motorists and fuel oil buyers, but it’s a tangible threat to the wellbeing of the more than 145 million inhabitants of the world’s third-largest oil producer………………………………………..Full Article: Source

Japan actions risk igniting currency war

Posted on 13 November 2014 by VRS  |  Email |Print

Last month the Bank of Japan boosted its quantitative easing efforts to try to revive sagging growth. But it has prescribed the wrong medicine. Worse still, its misguided policy risks sparking dangerous currency wars.
The yen has plunged 20 per cent against a trade-weighted basket of currencies since Prime Minister Shinzo Abe unveiled his plans to breathe life into the economy in late 2012. Since the BoJ’s unexpected announcement of extra QE on October 31, the currency is down 5 per cent against the dollar and the renminbi. Devaluation is becoming a serial habit in an economy that over the past 20 years has lost half of its global export market share………………………………………..Full Article: Source

Is Bitcoin Turning into a Precious Commodity?

Posted on 13 November 2014 by VRS  |  Email |Print

Former Global Macro Investor Group manager Raoul Pal believes that Bitcoin’s price can rise to levels of $1 million in the foreseeable future. He believes this is possible as the amount of Bitcoins available at the current moment is finite and should remain in this state for the foreseeable future.
Pal drew a parallel to gold and stated that Bitcoin, like gold is a rare commodity. Furthermore he feels that the crypto-currency is additionally a rare asset. Therefore its value could be as high as $1 million. He did however, concede that the recent price volatility in the Bitcoin has kept investors away, but strongly believes that traders need to understand that there is endless upside potential, as compared to the few risks………………………………………..Full Article: Source

Investors pour money into surging currency-hedged ETFs

Posted on 12 November 2014 by VRS  |  Email |Print

U.S. investors who believe the dollar’s 2014 surge will continue are pouring money into exchange-traded funds that invest in foreign markets but hedge the currency part of the bet. BlackRock Inc, WisdomTree Investments Inc and Deutsche Bank AG are among the companies starting new currency-hedged funds this year to take advantage of a flow of some $3.9-billion into currency-hedged ETFs so far this year.
There are now 35 U.S. listed currency-hedging ETFs managing $19.3-billion in assets, compared with only about $6.7-billion in assets in 2011, meaning total assets in currency hedged ETFs have nearly tripled over the past three years, according data from Lipper and ETF.com………………………………………..Full Article: Source

A new currency war is coming

Posted on 12 November 2014 by VRS  |  Email |Print

Currency wars are set to warm up again, after Japan’s radical decision to further debase its currency through an intensification of already significant monetary easing. There was a palpable coldness from China’s Premier Xi Jinping as he greeted Japan’s President Abe at the APEC summit in Beijing.
Tensions are normally high between the two countries but are even more so in recent months. War grievances run deep and are never far below the surface. Along with South Korea, these are the big industrial powers of Asia who are competing for a share of the shrinking export market………………………………………..Full Article: Source

Has Norway’s Currency Overreacted to Oil’s Tumble?

Posted on 12 November 2014 by VRS  |  Email |Print

The Norwegian krone has been hammered, like many other currencies from oil-based economies, as the price of the black stuff has plummeted in recent weeks. Bears say there’s much more weakness to come, unless the price of oil springs back.
Sounds straightforward. But HSBC reckons the krone has gone far enough, and a pretty big recovery is near. Sure, energy is a big deal for the country, accounting for 23% of Norway’s gross domestic product, 30% of fiscal revenues, and roughly half of exports, the bank says………………………………………..Full Article: Source

Currency wars fail to spark global growth

Posted on 11 November 2014 by VRS  |  Email |Print

Six years after the financial crisis ended, the global economic recovery remains anaemic. Fiscal stimulus could not be used to redress the situation due to fiscal gridlock in Washington, lack of agreement on policy across the eurozone, and the already high debt-to-GDP ratio in Japan.
By default, competitive devaluations stemming from successive quantitative easing programmes have become the stimulus instrument of choice. Such currency wars have boosted equity markets without a simultaneous pick-up in global economic growth………………………………………..Full Article: Source

Russia ends dollar/euro currency peg, moves to free float

Posted on 11 November 2014 by VRS  |  Email |Print

The Bank of Russia took another step towards a free float ruble by abolishing the dual currency soft peg, as well as automatic interventions. Before, the bank propped up the ruble when the exchange rate against the euro and dollar exceeded its boundaries.
“Instead, we will intervene in the currency market at whichever moment and amount needed to decrease the speculative demand,” the bank’s chairwoman, Elvira Nabiullina, said in an interview with Rossiya 24 Monday. The move is edging towards a floating exchange rate, which the bank hopes to attain by 2015………………………………………..Full Article: Source

Ukraine’s currency plunges as ceasefire fears grow

Posted on 11 November 2014 by VRS  |  Email |Print

Ukraine’s currency lost nearly 5 percent of its value on Monday after a weekend that saw the heaviest shelling in a month hit the main rebel stronghold in the east and signs that Moscow had dispatched troops and tanks to reinforce separatists.
The prospect that a two-month-old ceasefire could collapse and all-out war return to eastern Ukraine has weighed down the economy and helped drive the currency 12 percent lower since the central bank abandoned an unofficial peg a week ago………………………………………..Full Article: Source

Canada to establish first Chinese currency hub in North America

Posted on 10 November 2014 by VRS  |  Email |Print

Canada and China have signed a reciprocal currency deal that’s expected to dramatically boost exports. The hub will foster far easier trade between the Canadian dollar and the Chinese yuan, also known as the renminbi. It makes Canada the first country in the Americas to have a deal to trade in the renminbi.
The deal was announced by Prime Minister Stephen Harper and Premier Li Keqiang (KUH-chee-yahng) in Beijing. Authorized by China’s central bank, it will allow direct business between the Canadian dollar and the Chinese yuan, cutting out the middle man – in most cases, the U.S. dollar………………………………………..Full Article: Source

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Nigeria’s currency – calm now, devaluation later?

Posted on 10 November 2014 by VRS  |  Email |Print

Nigeria’s central bank on Friday tried to drawn a line under the naira – but the market continues to increasingly bet on a devaluation after the elections set for early 2015.
Currency traders said the Nigerian central bank intervened heavily on the foreign exchange a day after the naira plunged to an all-time law of ₦170 to the dollar. After Friday’s intervention, the currency settled at ₦165.75, down 2.5 per cent on the day………………………………………..Full Article: Source

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Why A Strong Dollar Is The Ultimate Stimulus

Posted on 10 November 2014 by VRS  |  Email |Print

Earlier this year commodities prices were fairly buoyant thanks in part to strong demand in Asia. The strength didn’t last long, however, and by summer weakness was evident in Europe and China. Global growth slowed considerably in the months leading up to October, when oil plunged below $90/barrel for the first time since 2012.
Apart from weakening global demand and the growth of energy supplies (thanks to fracking), the strengthening U.S. dollar has accelerated this trend………………………………………..Full Article: Source

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Commodity and US dollar driven Australian currency plunge to help exporters

Posted on 07 November 2014 by VRS  |  Email |Print

The Australian dollar has fallen below 86 US cents for the first time in four years. The local currency fell around 2 per cent overnight as investors rallied around the US dollar as the business-friendly Republicans took control of both houses of Congress.
Around midday today (AEDT) the Australian dollar reached a low of 85.55 US cents, its lowest level since July 2010, and had not recovered much since. National Australia Bank’s co-head of global foreign exchange strategy Ray Attrill said a sharp fall in commodity prices is also responsible………………………………………..Full Article: Source

Currency wars set for a return as central banks talk up easing efforts

Posted on 07 November 2014 by VRS  |  Email |Print

Currency wars are working their way back into the investor mindset as the Bank of Japan and European Central Bank have entered a race to the bottom. On Thursday, the euro hit a 26-month low against a basket of currencies as ECB President Mario Draghi said he would take more policy action if current efforts are not enough to prop up the struggling eurozone economy.
His declaration came a week after the Bank of Japan surprised markets with a fresh new round of easing. But analysts note that the yen is still weak compared to the euro, so Mr. Draghi could be forced to take further action………………………………………..Full Article: Source

4 Currency ETFs On The Move

Posted on 06 November 2014 by VRS  |  Email |Print

With declining volatility since mid-2013, September was the turning point where volatility began to expand in many currencies. Currencies, and their corresponding currency exchange-traded funds (ETFs), have seen steadily rising in daily ranges, which means bigger moves and more profit potential if you’re on the right side of the trade.
Volatility was further expanded last week, as the Japanese yen saw a sharp drop following a surprise announcement by the Bank of Japan that it would continue to ease. This action typically devalues the currency. This put the yen into the spotlight, but it isn’t the only currency ETF worth paying attention to right now………………………………………..Full Article: Source

Rouble tumbles as Russia abandons multi-billion dollar currency support

Posted on 06 November 2014 by VRS  |  Email |Print

The rouble tumbled on Wednesday after Russia’s central bank effectively abandoned the trading corridor for the currency, halting the multi-billion dollar daily interventions that had propped it up through sanctions and plunging oil revenues.
The bank announced it would limit daily interventions to just $350 million a day, saying this would mean the currency’s price would now largely be set by the market, although it stopped short of formally abolishing the trading corridor………………………………………..Full Article: Source

Dollar Firm As Commodity Currencies Take A Beating

Posted on 05 November 2014 by VRS  |  Email |Print

The U.S. dollar is hovering within striking distance of its recent seven-year high against the yen (¥114.18) and near a two-year high against the euro (€1.2456) in subdued trade on Tuesday. This is a significant week when it comes to scheduled economic events with three major central banks making statements and the release of monthly U.S. jobs data on Friday.
There was a danger that many forex traders would have to wait-and-see before participating; however, the market has been dealt an opportunistic hand especially when it comes to interest and commodity sensitive currencies like the Aussie dollar and the Canadian loonie………………………………………..Full Article: Source

Internationalization Of China Currency Continues With Qatar Deal

Posted on 05 November 2014 by VRS  |  Email |Print

Two weeks after signing a currency swap deal with Russia, China is back at it again, this time with the rich Persian Gulf nation Qatar.
The People’s Bank of China announced Monday that it signed the deal worth 35 billion yuan (about $5.7 billion) with the central bank of Qatar. The three-year swap arrangement could be extended by the two sides, said a statement on PBoC’s website………………………………………..Full Article: Source

Aussie under pressure amid new currency war

Posted on 05 November 2014 by VRS  |  Email |Print

The Australian dollar came under renewed selling pressure on Tuesday as the consolidation of global imbalances continues to fuel a rally in its US counterpart. The Aussie dropped briefly to touch a four-year low around $US86.5 cents on weak trade data and an upward revision in unemployment, before recovering to around $US86.9 cents as the market took heart from strong retail sales figures.
However, the main driver of more general weakness is a new surge in the US dollar, spurred by another bout of extreme monetary easing by the Bank of Japan………………………………………..Full Article: Source

BoJ bazooka to spark currency war

Posted on 04 November 2014 by VRS  |  Email |Print

The Bank of Japan’s (BoJ) stimulus blitz raises the specter of currency wars as a rapidly weakening yen threatens the competitiveness of export-driven economies, say strategists. “Whenever you have these kinds of disruptive moves by central banks, there’s always going to be fall out effects,” said Boris Schlossberg, managing director of FX strategy at BK Asset Management.
Markets were caught off guard by the BoJ’s announcement on Friday that it would expand purchases of exchange-traded funds (ETFs) and real estate investment trusts, extend the duration of its portfolio of Japanese government bonds (JGBs), and increase the pace of monetary base expansion………………………………………..Full Article: Source

China faces trap in currency war

Posted on 03 November 2014 by VRS  |  Email |Print

Last Friday, the Bank of Japan effectively tossed a grenade into the region’s currency markets with its surprise announcement of a new round of quantitative easing sending the yen, to fresh lows.
The move will be particularly problematic for China, as its slow-crawling managed rate to the U.S. dollar renders it is effectively defenseless when confronted by currency wars, in which countries try to steal growth from their trading partners through competitive devaluations. It also comes at a time when Beijing is already battling foes on two fronts: hot-money outflows and an economy flirting with deflation………………………………………..Full Article: Source

Argentina, China activate currency-swap deal

Posted on 31 October 2014 by VRS  |  Email |Print

The central banks of Argentina and China on Thursday activated a bilateral currency-swap agreement, with the South American country submitting a request for an initial tranche of yuan equivalent to $814 million.
The Central Bank of Argentina said in a statement that the People’s Bank of China authorized that first installment in keeping with an agreement signed in July by the two monetary authorities. “This instrument will help stabilize bilateral trade balances. At the same time, this Central Bank has authorized an equivalent amount in pesos in favor of the People’s Bank of China,” the statement added………………………………………..Full Article: Source

Commodity Currencies Have BeenThrashed. Reversal In The Cards?

Posted on 30 October 2014 by VRS  |  Email |Print

Traders are poring through the history books, looking for anything that will explain the latest thrashings in the commodity markets. Shockwaves have pulled back from their recent fever pitch, and, as volatility subsided, a new level of stability has finally settled market tensions. But uncertainties remain.
An apparent bottom in commodity indices is forming, roughly 18% below previous high ranges, but the US dollar’s rise to prominence can only account for a third of the drop. The issue now, of course, is what will happen next?……………………………………….Full Article: Source

China currency claims a bigger share of reserve manager portfolios

Posted on 30 October 2014 by VRS  |  Email |Print

Central banks from Asia to America are adding the Chinese currency to their portfolios as growing trade ties and a flurry of reforms by Beijing are leading reserve managers to view the renminbi as a viable reserve currency.
Acceptance of the Chinese currency among central banks and sovereign wealth funds which manage billions of dollars in assets is the ultimate objective for Beijing in its quest to make the renminbi globally recognised. “More than 50 central banks are already there, but the number that are thinking about going there is also in the tens,” Jukka Pihlman, managing director and global head, central banks and sovereign wealth funds at Standard Chartered Bank told Reuters………………………………………..Full Article: Source

Currency Trading Skirts Turmoil as Volatility Drops

Posted on 30 October 2014 by VRS  |  Email |Print

Traders in the more than $5 trillion-a-day foreign-exchange market have largely sidestepped the rising volatility and turmoil that rocked stocks and bonds this month amid renewed concern the global economy is weakening.
A measure of volatility is poised for its biggest slide since April as price swings in U.S. Treasuries climb the most in a year. While turnover on CME Inc.’s currencies exchange jumped as much as 45 percent above its six-year average, liquidity has remained intact, with the spread between bids and offers below historical levels, JPMorgan Chase & Co. data show………………………………………..Full Article: Source

US currency reimagined to celebrate ideas, not the dead

Posted on 29 October 2014 by VRS  |  Email |Print

Travis Purrington’s interpretation of the US currency looks like it belongs in a cyberpunk movie. Gone is the uniformed green, and the portraits of long-dead presidents. Purrington’s designs are subtle yet sleek, embossed with astronauts, crashing waves, ice-capped mountains, and distant galaxies.
The project draws inspiration from the Swiss Franc, and was conceptualized to showcase banknotes that placed greater emphasis on the accomplishments of the living, rather than “codifying myth or legend.” Purrington says he removed the Founding Fathers from his design as this was a practice Congress had wanted to abolish following the American revolution. He wanted to focus instead on the attributes shared by workers in a community, and “how these attributes contribute to the principles we end up seeing as valuable.”……………………………………….Full Article: Source

Currency traders eye Swiss vote on gold holdings

Posted on 29 October 2014 by VRS  |  Email |Print

A referendum that would force the Swiss central bank to hold a fifth of its assets in gold could rock foreign exchange markets, analysts have warned. On the 30th November, voters in Switzerland will head to the polls to decide whether the Swiss National Bank (SNB) should boost its gold holdings and refrain from any further selling of Swiss gold.
The referendum, proposed by the ultra-conservative Swiss People’s party, will also require the bank to repatriate all Swiss gold holdings currently held outside of Switzerland if passed. The ban on selling gold would go into effect immediately and the SNB would have five years to reach the 20 percent requirement………………………………………..Full Article: Source

Singapore and China to start direct currency trading

Posted on 28 October 2014 by VRS  |  Email |Print

China will allow direct trading between its currency and the Singapore dollar from Tuesday (Oct 28), making it easier for companies here to do business with their Chinese counterparts.
The Sing dollar will be added to the China Foreign Exchange Trade System (CFETS) platform, which currently offers transactions between the yuan and 10 foreign currencies. The announcement came on Monday (Oct 27), after an agreement at the Joint Council for Bilateral Cooperation (JCBC) in Suzhou, co-chaired by Deputy Prime Minister Teo Chee Hean and Chinese Vice Premier Zhang Gaoli………………………………………..Full Article: Source

Hedge Funds Cut Coffee Bull Bets aas Brazil Drought Eases

Posted on 27 October 2014 by VRS  |  Email |Print

Hedge funds pared back their biggest bullish coffee bet since 2008 as rains brought relief to drought-stricken growing areas in Brazil, the world’s biggest producer and exporter.
Money managers cut their net-long position in arabica coffee for the first time in four weeks. Futures in New York tumbled 9.1 percent last week, the most since May. More regular and widespread showers will trigger new flowering for coffee plants after some blooms were lost amid dry conditions last month, Sao Paulo-based Somar Meteorologia said Oct. 21………………………………………..Full Article: Source

Are we really in currency wars?

Posted on 27 October 2014 by VRS  |  Email |Print

The effects of Federal Reserve and other central banks’ policies on exchange rates are back in the news. A Bloomberg News headline, “Currency wars evolve with goal of avoiding deflation,” is typical. This implies that changing the value of our currency, relative to other nations, is driving monetary policy. But is this really the case? Are we really in currency “wars?”
Several readers have asked that. The answer is yes and no. That sounds like waffling, but it reflects the reality that effects of monetary policy on exchange rates vary greatly between countries. It is a dangerous error to generalize………………………………………..Full Article: Source

Currency Market Positioning: Will The Greenback Continue To Rise?

Posted on 27 October 2014 by VRS  |  Email |Print

We have been focusing on the equity markets quite a lot recently, due to a huge pick up in volatility. Let us now refocus our attention on currencies, as I discuss my own positioning as well as my views on future price action.
One could argue that majority of the current volatility could be attributed to Federal Reserves plan to end the QE program. As we have all heard in recent months, there is even talk about attempting to hike interest rates sometime in 2015. US Dollar Index has benefited from these policy changes against all the majors (and majority of the minors too), however this is now a very overcrowded trade………………………………………..Full Article: Source

Chinese appetite for foreign currency grows

Posted on 24 October 2014 by VRS  |  Email |Print

China’s appetite for foreign currency increased in September, leading to a net foreign exchange purchase among banks, according to data released by the country’s top foreign exchange regulator on Thursday.
Chinese institutions and individuals bought 179.3 billion U.S. dollars in foreign currency and sold 163 billion U.S. dollars in exchange for 1.1 trillion yuan in September, the State Administration of Foreign Exchange (SAFE) said………………………………………..Full Article: Source

Brazil’s Currency to Rise 13% or Fall 14% in Preview of Election

Posted on 24 October 2014 by VRS  |  Email |Print

Brazil’s too-close-to-call presidential election has investors and analysts predicting moves in the local currency that range from a 13 percent rally against the dollar to a 14 percent tumble after the vote.
That helps explain why one-month implied volatility on options for the real, reflecting projected shifts in the currency, is the highest among developing countries at 25 percent as the Oct. 26 runoff between President Dilma Rousseff and opposition candidate Aecio Neves approaches………………………………………..Full Article: Source

Oil price slide hits commodity currencies

Posted on 23 October 2014 by VRS  |  Email |Print

The funk over global growth that gripped markets last week sent exchange rates into wild gyrations. But even in the worst of the turbulence one trend was clear: the underperformance of currencies exposed to the slide in oil prices.
The dollar fell against most major currencies as investors – previously betting on its rapid appreciation – pushed back expectations for the first rise in US interest rates. Norway’s krone and Canada’s dollar, which ended the week flat after touching respective four and five year lows against the dollar, were the exceptions………………………………………..Full Article: Source

Good fundamentals make ruble ‘stable’ currency - Russian Central Bank

Posted on 23 October 2014 by VRS  |  Email |Print

Russia’s currency has taken a significant 20 percent plunge this year against the dollar and euro, but analysts are confident that Russia’s sturdy stash of foreign reserves and miniscule external debt make the ruble one of the ‘most stable’ currencies.
Russia’s vast gold and foreign currency reserves will help weather the ruble’s rough patch. At more than $450 billion, they are the third largest reserves in the world. “We believe that the fundamental factors that determine the value of our currency were unchanged. Fundamentally the balance of our budget, the absence of significant external debt of our state. Precisely because of this ruble is one of the most stable currencies,” Deputy Chairman of the Bank of Russia, Mikhail Sukhov, told TASS Wednesday………………………………………..Full Article: Source

Currency wars evolve with goal of avoiding deflation

Posted on 23 October 2014 by VRS  |  Email |Print

Currency wars are back, though this time the goal is to steal inflation, not growth. Brazil Finance Minister Guido Mantega popularized the term “currency war” in 2010 to describe policies employed at the time by major central banks to boost the competitiveness of their economies through weaker currencies. Now, many see lower exchange rates as a way to avoid crippling deflation.
Weak price growth is stifling economies from the euro region to Israel and Japan. Eight of the 10 currencies with the biggest forecasted declines through 2015 are from nations that are either in deflation or pursuing policies that weaken their exchange rates, data compiled by Bloomberg show………………………………………..Full Article: Source

Nigeria naira hits 8-month low as firms hedge currency risk

Posted on 22 October 2014 by VRS  |  Email |Print

Nigeria’s naira eased to an 8-month closing low of 165.55 against the dollar on Tuesday, due to strong dollar demand from importers and companies reducing their exposure to the local currency, dealers said.
The naira fell 0.16 percent from Monday’s close of 164.28 to the dollar, a level last seen on Feb. 21, a day after the president suspended the central bank governor, sending financial markets into a tailspin………………………………………..Full Article: Source

Brazil’s Real Leads Global Currency Declines as Poll Shows Tie

Posted on 21 October 2014 by VRS  |  Email |Print

Brazil’s real led global currency losses as a voter poll showed opposition candidate Aecio Neves statistically tied with President Dilma Rousseff, dimming the prospect of a new government reviving growth.
The real fell 1 percent to 2.4594 per dollar at 11:29 a.m. in Sao Paulo, the biggest decline among 31 currencies. Swap rates, a gauge of expectations for changes in local borrowing costs, increased 18 basis points, or 0.18 percentage point, to 12.16 percent on the contract due in January 2017………………………………………..Full Article: Source

Bitcoin exchange to trade other currencies

Posted on 20 October 2014 by VRS  |  Email |Print

Coinfloor, the London-based bitcoin exchange, is planning to raise money from investors to expand its operations to trade a wider range of currencies and launch a bitcoin fund.
Since its founding two years ago, the company has become the biggest exchange for bitcoin-to-sterling transactions by volume of currency traded. On Tuesday, it will open up to new currencies, accepting deposits in US dollars, euros and Polish zloty………………………………………..Full Article: Source

Norway’s amazing new abstract currency

Posted on 20 October 2014 by VRS  |  Email |Print

Each bill depicts a particular landmark along Norway’s coast with the details boldly omitted. Large blocks of color are stacked together as in a blown-up jpeg, creating an atmosphere that’s just barely representational, both arctic and evocatively generic. The most startling aspect of these new bills is that they look genuinely new.
The eye-catching proposal for the money, which is set to enter circulation in 2017, is from the New York- and Oslo-based design and architecture firm Snohetta. The designers linked the currency to the strength of currents, distorting each image in accordance with the Beaufort wind scale………………………………………..Full Article: Source

The Strong Dollar Weighs Heavily on the Commodities Market

Posted on 17 October 2014 by VRS  |  Email |Print

Early in 2014, the commodities markets were doing surprisingly well. China’s appetite for raw material was holding up, and the International Monetary Fund was predicting a decent year of global growth, which meant rising demand for everything from oil to cotton. Then the spell broke. In July, China reported lower imports of oil and copper.
Since the country is the largest consumer of pretty much everything that’s pumped or mined out of the ground, the news sent prices of commodities sliding. On Oct. 2, oil fell below $90 a barrel for the first time in 17 months. Global growth was stalling, and the commodity companies were faced with much lower demand than they’d anticipated in January………………………………………..Full Article: Source

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