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Investors Turn More Negative on Dollar

Posted on 04 April 2016 by VRS  |  Email |Print

In shift, many now expect further declines, which could help stocks, emerging markets, commodities. Investors are betting on a trend that few analysts predicted heading into 2016: a depreciating dollar.
Hedge funds and other speculative investors are less bullish on the dollar than at any time since May 2014, according to Commodity Futures Trading Commission data. The ICE Dollar Index, which measures the greenback against a basket of six currencies, fell 4.2% in the first three months of the year, its worst quarterly performance since 2010………………………………………..Full Article: Source

Clock Ticks on U.S. Case Against Currency Traders

Posted on 01 April 2016 by VRS  |  Email |Print

The word came down in late 2014 from the head of the Justice Department: The U.S. wouldn’t stop at extracting billion-dollar settlements from banks accused of rigging markets. Within months, the nation’s top cop said, individual wrongdoers at big banks could also expect to be brought to justice.
More than a year later, the U.S. hasn’t charged any individuals over rigging exchange rates. Britain this month dropped its own efforts to bring cases against currency traders, saying there wasn’t enough evidence. For U.S. prosecutors in the Obama administration’s waning days, time is running short………………………………………..Full Article: Source

China’s central bank discloses currency forwards

Posted on 01 April 2016 by VRS  |  Email |Print

China’s central bank revealed its short foreign-currency positions in forwards and futures for the first time, a decision that Australia & New Zealand Banking Group said will help show the extent of the monetary authority’s support of the yuan.
The People’s Bank of China held $US28.9 billion of such positions with commercial lenders as of end-February, according to a statement posted on its website. It added that it made short-foreign currency trades in derivatives with commercial lenders to meet demand from companies looking to hedge overseas liabilities………………………………………..Full Article: Source

Good as Gold: Why Russia and China Are Busy Buying Bullion

Posted on 31 March 2016 by VRS  |  Email |Print

The currencies of Russia and China are moving to become as “good as gold,” F. William Engdahl notes, explaining why the countries are buying gold at a steady pace. Since US President Nixon unilaterally abrogated the 1944 Bretton Woods Treaty in 1971 the US dollar has been no longer backed by gold; however, gold still remains as a store of value which paper money cannot compete with.
Remarkably, the Central Bank of Russia became the world’s leading purchaser of gold, as it bought 356,000 ounces of the precious metal in February 2016, according to the International Monetary Fund (IMF). In general, Russia increased its reserves of monetary gold by 208.4 metric tons in 2015 and continues to buy the precious metal at a growing pace………………………………………..Full Article: Source

What Currency Has the Highest Purchasing Power?

Posted on 31 March 2016 by VRS  |  Email |Print

Establishment economists are the first vindicators that having a weak currency is essential to foster international trade. The utter absurdity that a nation can prosper when their coin of the realm buys less is inherently illogical.
Yet, for the globalists, maintaining the myth that promoting exports in a system that is designed around transporting our domestic manufacturing capacity overseas is intellectually incongruent. So what is the essential argument for having a strong currency? If you are an economic nationalist, you will agree with Stephan Smith, when he acknowledges in How a Strong Currency Affects an Economy………………………………………..Full Article: Source

Pressure mounts on Nigeria to devalue its currency

Posted on 30 March 2016 by VRS  |  Email |Print

Nigeria is under pressure to devalue its currency in order to aid growth and investment in Africa’s largest economy. According to reports, the United States intends to press the West African nation to lower the naira in order to create more flexibility in its foreign exchange.
The two countries are set to hold talks in Washington on Wednesday that will primarily focus on the West African country’s economy, security and development. Africa’s largest economy is facing its worst economic crisis in years pegged to the tumbling of global oil prices. A number of analysts and the members of the central bank monetary policy committee (MPC) have called for the devaluation of the currency, a move President Muhammadu Buhari is against………………………………………..Full Article: Source

China’s Currency Stronger As U.S. Dollar Falls

Posted on 30 March 2016 by VRS  |  Email |Print

China’s yuan strengthened against the dollar midday Tuesday, after China’s central bank fixed a stronger midpoint in response to the greenback’s slip as soft U.S. data dampened expectations for an April Federal Reserve interest rate hike.
“This surely further eased the short-term depreciation pressure on the yuan,” a trader at an Asian bank said. “I have to say luck was on our side when the dollar was not faring well.”……………………………………….Full Article: Source

Has truce been declared in the currency wars?

Posted on 29 March 2016 by VRS  |  Email |Print

Marc Chandler of Brown Brothers Harriman could not have been more sniffy about the idea of a currency wars truce being declared by the world’s main central banks. “First, a war is imagined and then an imaginary truce is declared. Really?” tweeted the FX analyst.
Real or imagined, currency wars and competitive devaluations have been the staple conversation of the FX market for decades, most recently fuelled by the successive monetary easing programmes of the central banks of the US, Japan and Europe………………………………………..Full Article: Source

Why Puerto Rico needs its own currency

Posted on 29 March 2016 by VRS  |  Email |Print

Puerto Rico is in a tight spot. It is staring down $72 billion in debt — and the reason is almost stupifyingly simple. But first, some important background: Puerto Rico has already defaulted on $221 million in debt payments, and is facing multiple lawsuits from wealthy hedge funds that own many of its bonds — and who expect their payout.
Much of the rest of its debt obligations are due sometime in the next few months, and with punishingly high unemployment and an economy that’s been in recession for years, the money just isn’t there………………………………………..Full Article: Source

Commodity, currency slump hit economies

Posted on 24 March 2016 by VRS  |  Email |Print

Slumping commodity prices have taken African currencies down with them, exposing the fundamental economic frailties of the world’s poorest continent by driving up inflation in countries that import most of their manufactured goods.
Regional economies are in no position to use their weakening currencies to their trade advantage because they have few exports beyond their natural resources. The hardship for households has been compounded by rising prices for food - one commodity that has defied the price fall due to drought in southern Africa………………………………………..Full Article: Source

‘Beware of devaluing the yuan’: economists warn China

Posted on 24 March 2016 by VRS  |  Email |Print

A policy of yuan depreciation would do nothing for China’s economy, offering few benefits for exports and possibly triggering capital outflows, influential economists said yesterday at the Boao Forum for Asia. In response to suggestions that the central bank may weaken the currency to boost exports, the economists warned the move risked a counter-reaction.
They also called for less government intervention in the exchange rate. Long Guoqiang, vice director of the State Council’s Development Research Centre, said there were risks to devaluing the yuan………………………………………..Full Article: Source

A Welcome Cease-Fire in the Currency Wars

Posted on 24 March 2016 by VRS  |  Email |Print

Call it the Shanghai Accord. There’s been a burst of speculation that last month’s Group of 20 meeting in China produced a secret agreement between policy makers to halt the dollar’s advance against its peers in the currency market.
Whether true or not, even a modest reversal in the greenback’s advance against the U.S.’s major trading partners is welcome given the fragility of the global economic outlook and the accompanying need for the world’s biggest economy to shoulder the burden of delivering growth………………………………………..Full Article: Source

Salmond: New currency argument needed for independence

Posted on 24 March 2016 by VRS  |  Email |Print

Alex Salmond has said it is time for a fresh look at the currency arguments for independence. The former First Minister told the BBC he still favoured retaining Sterling but said the argument needed “refurbishment” to prevent a future independence vote being “gazumped” by opponents.
“I think the argument you have got to put forward is one which can withstand any position adopted by your opponents,” he said. “So, you mustn’t allow yourself to be gazumped by your opponents.” ……………………………………….Full Article: Source

The currency war is over, says HSBC

Posted on 23 March 2016 by VRS  |  Email |Print

The currency war is over. With the dollar clocking significant declines against the euro and yen since the beginning of the year, it appears that the European Central Bank and the Bank of Japan—who along with the Fed comprise the primary antagonists—have run out of ammunition for driving their currencies lower, according to a team of currency strategists at HSBC.
Investors should welcome this development. The only beneficiaries of the strong dollar were the BOJ and ECB. The strength in the greenback exacerbated global woes by causing emerging-markets currencies and oil prices to plunge—a one-two punch for oil-exporting developing economies………………………………………..Full Article: Source

Currency war truce

Posted on 23 March 2016 by VRS  |  Email |Print

Farewell, currency wars. Hello, carry trade! Spring’s arrival seems to have forex investors wondering if a new currency world order — in which central banks no longer drive each other’s currencies to the bottom — is sprouting.
And regardless of whether that is true or not, the Federal Reserve’s supremely dovish tone may be enough to revive the carry trade strategy: borrowing from low interest rate countries to buy assets where rates are higher………………………………………..Full Article: Source

Moody’s Sees Gulf State Currency Pegs Withstanding Oil Rout

Posted on 23 March 2016 by VRS  |  Email |Print

Oil-rich countries in the Gulf Cooperation Council are unlikely to abandon their decades-old currency pegs to the U.S. dollar even as a slump in oil prices puts a $250 billion squeeze on the region’s finances, according to Moody’s Investors Service.
“The GCC’s large foreign-currency reserves provide ample room to maintain pegged exchange-rate regimes for several years, even in an adverse oil price scenario,” senior analyst Mathias Angonin said at a press briefing in Dubai on Monday. “Changes to the current exchange-rate regimes are unlikely because the costs associated with one-off devaluations would outweigh the benefits.”……………………………………….Full Article: Source

Currency Hedging Is Growing Up. Are Your Foreign ETFs Keeping Up?

Posted on 22 March 2016 by VRS  |  Email |Print

Global currencies have been in the news a lot lately. In December, the Federal Reserve Bank hiked interest rates. Meanwhile, the Bank of Japan (BOJ) recently tried to push its currency lower with negative interest rates.
The European Central Bank has cut rates as well. And the Chinese currency has moved lower since dropping 2% last August when the People’s Bank of China let the yuan float. Despite the BOJ’s best efforts the yen is up 8% this year, its strongest level against the dollar since October 2014. The euro is strengthening too………………………………………..Full Article: Source

US dollar, not China, drives commodity falls

Posted on 22 March 2016 by VRS  |  Email |Print

The collapse in global commodity prices last year was primarily driven by a surging US dollar, not an economic slowdown in China, a study by the Federal Reserve Bank of New York has concluded.
The surprise finding challenges the conventional view that China’s tempering demand for commodities such as oil, industrial metals and some agricultural products, drove the swoon in commodity prices. A regression analysis over the past 25 years by New York Fed economists shows that a 1 per cent increase in the US dollar index corresponds to a 0.9 per cent drop in the commodity price index………………………………………..Full Article: Source

IMF Pressing China to Disclose More Data on Currency Operations

Posted on 22 March 2016 by VRS  |  Email |Print

The International Monetary Fund is pressing China to disclose more information about its currency operations based on standards the Chinese central bank had pledged to follow, people familiar with the matter said, as Chinese authorities resort to more-discreet ways to support the yuan.
In recent months, the People’s Bank of China has turned to the derivatives market to help prop up the currency—a shift from its traditional approach of dipping into its dollar pile to buy yuan………………………………………..Full Article: Source

Currency wars, the Aussie and ECB strategy

Posted on 21 March 2016 by VRS  |  Email |Print

Competitive monetary easing, or the so-called currency wars, remains the most-watched market theme at the moment, and that will not change this week. Revived by talk of an unofficial agreement among central banks and finance ministers at last month’s G20 meetings in Shanghai, the idea of a global move to stop the US dollar from strengthening too much is gaining some currency among commentators.
A strong greenback might not only derail the US recovery, but could also prove disastrous to emerging markets already grappling with weak commodity prices and all manner of structural and political challenges………………………………………..Full Article: Source

Egypt Said to Consider Tighter Regulations on Currency Bureaus

Posted on 21 March 2016 by VRS  |  Email |Print

Egypt’s central bank is weighing tougher regulations on foreign-exchange dealers, part of a broader effort to crack down on the black market and to end a hard currency shortage that’s impeding economic growth.
The bank wants to reduce the number of foreign-exchange bureaus from more than 140 and introduce measures to improve transparency, said a person familiar with the matter, who asked not to be named because they’re not authorized to speak to the media. Central bank Governor Tarek Amer declined to comment when contacted by Bloomberg………………………………………..Full Article: Source

Global Currencies Soar, Defying Central Bankers

Posted on 18 March 2016 by VRS  |  Email |Print

Efforts by many of the world’s central banks to weaken their currencies are failing, raising concerns about whether policy makers are losing the ability to wield control over financial markets. This was the case again in Japan on Thursday, when the dollar fell 1.1% against yen, to ¥111.39.
Despite the Bank of Japan’s efforts to push down its currency and jump-start the economy with negative interest rates, the yen is up 8% this year and is at its strongest level against the dollar since October 2014. European central bankers are having similar problems containing the strength of the euro and other currencies………………………………………..Full Article: Source

Currency Traders Baffle Norway’s Top Central Banker and Others

Posted on 18 March 2016 by VRS  |  Email |Print

The only central bank in Europe to cut rates on Thursday was met by a sudden currency appreciation that left economists and policy makers scratching their heads.
Here’s what happened: Norges Bank delivered a quarter-point rate cut to 0.5 percent, in line with almost all analyst estimates. It signaled readiness to deliver further easing, adding that negative rates were not to be ruled out. It even cut its economic outlook. Currency traders responded by sending the krone up more than 1 percent against the euro, only to think better of the move a few hours later, when they sent the krone lower……………………………………….Full Article: Source

Mozambique’s currency devalues again

Posted on 17 March 2016 by VRS  |  Email |Print

Mozambique’s currency suffered a huge blow on Wednesday after Moody’s and S&P downgraded the metical by 6 percent. The downgrade was as a result of growing concerns about a proposed debt restructuring for a troubled multi-billion bond issued to a tuna fishing company, Ematum controlled by the government.
S&P lowered Mozambique’s sovereign credit rating from B- to CC, which is “extremely speculative” and just one notch above potential default status. Moody’s downgraded Mozambique’s issuer rating to B3 from B2, maintaining the rating on review for downgrade………………………………………..Full Article: Source

South African currency’s slide extends on political tension

Posted on 17 March 2016 by VRS  |  Email |Print

Political tensions are eroding the gains South Africa’s rand has reaped from the bounce in commodity prices, as a stand-off between finance minister Pravin Gordhan and the police sours investor confidence.
The rand dropped as much as 2 per cent on Wednesday, on top of a near-3 per cent fall the previous day, amid concerns about the intensifying dispute between Mr Gordhan and the elite Hawks police division over its investigation of the South African Revenue Service, which the finance minister ran for a decade………………………………………..Full Article: Source

Commodity and currency slump expose frailties of African economies

Posted on 16 March 2016 by VRS  |  Email |Print

Slumping commodity prices have taken African currencies down with them, exposing the fundamental economic frailties of the world’s poorest continent by driving up inflation in countries that import most of their manufactured goods.
Regional economies are in no position to use their weakening currencies to their trade advantage because they have few exports beyond their natural resources. The hardship for households has been compounded by rising prices for food - one commodity that has defied the price fall due to drought in southern Africa……………………………………….Full Article: Source

The Swiss franc is your best bet for ‘Brexit’ protection

Posted on 16 March 2016 by VRS  |  Email |Print

If Britons vote to support the U.K.’s exit from the European Union, the Swiss currency could be your savior if you’re looking for cover from the fallout.
Debate over whether the U.K. should cut formal ties with EU is in full-swing ahead of a June 23 referendum. Overall, polling indicates the race will be tight. Prime Minister David Cameron has been working to convince the British public to back the UK/EU paring………………………………………..Full Article: Source

China ‘weighs tax on currency trades’

Posted on 16 March 2016 by VRS  |  Email |Print

China’s central bank has drafted plans to impose a tax on currency trades, Bloomberg News reported Tuesday, in what would be its latest volley against those betting on a depreciation of the yuan.
Chinese authorities have spent unprecedented sums to support the currency and stem capital flight since a surprise devaluation rattled investors last summer. The tax would be the most dramatic measure to date, although Bloomberg reported that the rules had yet to be approved and the level might initially be kept at zero as an experiment………………………………………..Full Article: Source

Brazil Real Falls as Commodities Drop Offsets Protest Movement

Posted on 15 March 2016 by VRS  |  Email |Print

The real dropped as oil and iron slumped and the continued deterioration of Brazil’s economy overshadowed speculation that demonstrations that attracted millions of protesters would help accelerate an impeachment of President Dilma Rousseff.
The real dropped 0.9 percent to 3.6195 at 12:41 p.m. in Sao Paulo. It earlier rose as much as 0.1 percent. One-week implied volatility rose 0.8 percentage point to 25.93 percent, the highest among major currencies………………………………………..Full Article: Source

Egypt Devalues Currency as Central Bank Looks to Ease Dollar Shortage

Posted on 15 March 2016 by VRS  |  Email |Print

Egypt’s central bank devalued its currency and said it would adopt a more flexible exchange-rate policy as it seeks to ease an acute dollar shortage that is hurting the economy, sending local stocks sharply higher.
The Central Bank of Egypt on Monday sold almost $200 million in an interbank auction at 8.85 Egyptian pounds per dollar, compared with the previous rate of 7.73 that it maintained for nearly five months. ……………………………………….Full Article: Source

Egyptian pound stable in official auction, firmer on black market

Posted on 14 March 2016 by VRS  |  Email |Print

The Egyptian pound held steady at an official auction on Sunday but strengthened on the black market after the central bank last week supplied the market with foreign currency and eased restrictions on dollar deposits and withdrawals.
The central bank held the pound steady at 7.7301 pounds per dollar, selling $38.8 million, at Sunday’s official auction. On the black market, the pound strengthened to 9.25-9.30 pounds per dollar from 9.60-9.65 pounds on Thursday, three traders told Reuters, without revealing trade volumes………………………………………..Full Article: Source

The world’s most beautiful currencies, in pictures

Posted on 14 March 2016 by VRS  |  Email |Print

The 10,000 tenge banknote issued in Kazakhstan in 2003 features a snow leopard against a background of mountains. Each denomination of South African rand banknote showcases a different animal from the “big five”.
The New Zealand note for five dollars, in circulation since 1999, depicts New Zealand’s native hoiho, or yellow-eyed penguin, and the yellow Ross lily………………………………………..Full Article: Source

A Bitcoin-Style Currency for Central Banks

Posted on 11 March 2016 by VRS  |  Email |Print

The digital currency Bitcoin was designed to be independent of any government—a feature that also limits its mainstream appeal. Now researchers have invented a Bitcoin-like system that could make digital cash more practical by allowing a central bank such as the Federal Reserve to control it.
The system, RSCoin, was designed by researchers Sarah Meiklejohn and George Danezis at University College London, at the suggestion of the U.K.’s central bank, the Bank of England. The bank began researching the idea of issuing digital currency early last year………………………………………..Full Article: Source

Korea Mulls Easing Currency Forward Curbs, Affirms Growth Target

Posted on 11 March 2016 by VRS  |  Email |Print

As volatility in financial markets shows signs of easing, South Korea is becoming more comfortable with capital flows and may loosen restrictions on currency forward positions for banks.
The government is also confident of achieving its 3.1 percent economic growth target this year and doesn’t plan to add to existing fiscal stimulus, according to Vice Finance Minister Choi Sang Mok. His comments Thursday came just hours after the central bank governor said monetary policy was already accommodative and that any further cuts to borrowing costs might have limited benefit………………………………………..Full Article: Source

Global currency wars are just beginning

Posted on 10 March 2016 by VRS  |  Email |Print

European Central Bank boss Mario Draghi is expected to fire the latest salvo in the currency wars by unveiling fresh measures to push interest rates even lower in the eurozone. Investors expect the ECB will step up its efforts to fight the scourge of low inflation by boosting the size of its asset-buying program and slashing its deposit rate deeper into negative territory.
The expected move by the ECB to push interest rates even deeper into negative territory comes despite howls of protest from banks and insurance companies, which argue that negative rates are undermining their business models. The ECB rate decision and Draghi’s news conference is expected to occur about 12:30am AEDT on Friday………………………………………..Full Article: Source

Currency Traders Bracing for Big Move in Euro as ECB Meeting Looms

Posted on 10 March 2016 by VRS  |  Email |Print

Once bitten, twice shy. Currency investors are bracing for big swings in the price of the euro when the European Central Bank holds its monetary policy meeting on Thursday. The ECB is widely expected to announce that it is implementing further easing measures such as increasing its bond-purchase program and cutting its deposit rate further into negative territory.
But uncertainty remains about what form the stimulus could take, especially after the ECB unveiled stimulus measures that disappointed many investors at its December meeting………………………………………..Full Article: Source

Conquering Foreign Currency Concerns

Posted on 09 March 2016 by VRS  |  Email |Print

CFO offers the following stories on foreign currency risks, hidden costs of international payments, foreign market fixed rates, and multinational margins. Corporate treasurers are no strangers to the obstacles restless currency markets can create for cash management and accounting, yet few anticipated the currency turbulence of 2015.
To help conquer any issues, CFO offers the following stories and content on foreign exchange risks, hidden costs of international payments, foreign market fixed rates, and multinational margins………………………………………..Full Article: Source

Mixed outlook for currency hedged ETFs

Posted on 08 March 2016 by VRS  |  Email |Print

For unhedged investors, 2015 saw FX volatility savaging returns on a slew of assets – particularly in emerging markets – offsetting capital appreciation and coupon income, and fundamentally altering their risk-return profile.
As a result, demand for currency hedged passive exposure to foreign assets rose dramatically, with net inflows into currency hedged exchange-traded products (ETPs) in Europe totalling almost $4 billion and assets under management growing year-on-year by 28%, according to Deutsche Bank research………………………………………..Full Article: Source

Currency speculators are warming up to the dollar

Posted on 08 March 2016 by VRS  |  Email |Print

Hedge funds and other currency speculators are adding to bets that the dollar will rise against its main rivals, suggesting that the U.S. currency’s renewed bout of strength may continue.
After five weeks of consecutive declines, speculators added $1.6 billion to long-dollar positions via currency futures during the week ended last Tuesday, according to the Commodity Futures Trading Commission’s latest commitments-of-traders report released Friday afternoon………………………………………..Full Article: Source

Commodity gains boost Australian, Canadian dollars

Posted on 08 March 2016 by VRS  |  Email |Print

A surge in commodity prices, from oil to iron to copper, boosted the Australian and Canadian dollars against the US greenback on Monday but other major currencies were stable. A surge in commodity prices, from oil to iron to copper, boosted the Australian and Canadian dollars against the US greenback on Monday (Mar 7) but other major currencies were stable.
Australia’s dollar jumped 0.7 per cent to 74.7 US cents while the Canadian currency traded up 0.4 per cent at CAN$1.3284 per one US dollar. But with markets already having prepared for more stimulus from the European Central Bank this week, and lack of any clear policy signal from two senior federal Reserve officials in speeches on Monday, the US dollar-euro rate was little-changed from Friday at US$1.1013………………………………………..Full Article: Source

Yuan to stay stable against currency basket

Posted on 07 March 2016 by VRS  |  Email |Print

The yuan’s exchange rate will become stable “against a basket of currencies” and reflect fundamentals “in the medium to long term”, central bank deputy governor Yi Gang said. China’s capital outflow would also ease once domestic demand was met for portfolio diversification, he said, joining the nation’s top-ranking economist, officials and entrepreneurs to talk up the economy.
Yi, a member of the Chinese People’s Political Consultative Conference, also underscored that China’s foreign reserves were managed in line with the principles of “safety, liquidity and profitability”. “Assets that do not meet liquidity requirements have been completely cut from the official forex reserves,” he said………………………………………..Full Article: Source

Low oil prices put strains on Gulf currency pegs

Posted on 07 March 2016 by VRS  |  Email |Print

Weak oil prices pose a threat to Gulf Arab states’ currency pegs against the dollar, but the energy-rich region is unlikely to abandon the policy yet, analysts say. Bahrain, Oman, Qatar, Saudi Arabia and the United Arab Emirates all keep the values of their currencies fixed against the greenback, while Kuwait has a link to a basket of currencies including the dollar.
But doubts are growing about whether the policy still makes sense. The slide in oil prices has battered the economies of the six Gulf Cooperation Council (GCC) member states at a time when an improving American economy and prospects of higher U.S. interest rates are lifting the dollar………………………………………..Full Article: Source

Bitcoin is “the Slowest, Most Expensive, Least-Developed Currency”

Posted on 07 March 2016 by VRS  |  Email |Print

We have written a number of times over the past few months about the hardships faced by the bitcoin community and its end users. Keeping a focus on trading and technology, the subject mainly came up as background to stories about drops in the BTC/USD exchange rate, the rise of Ethereum as bitcoin 2.0 and the shift to institutional blockhain solutions.
To provide the perspective of an active bitcoin user that is actually hurt by its problems we turned to Amanda B. Johnson, host and writer of TheDailyDecrypt.com. She is known for managing her life and businesses only using cryptocurrency and recently made waves in the community by saying “Bitcoin Became the Slowest, Most Expensive, Least-Developed Currency.”……………………………………….Full Article: Source

World’s No. 2 Currency Trader Sees Dollar Surge as Misery Wanes

Posted on 04 March 2016 by VRS  |  Email |Print

When misery fades, the dollar rallies. That’s the contention of Deutsche Bank AG, the world’s second-biggest currency trader according to Euromoney magazine, which expects the greenback to resume its surge this year after slumping in February.
The misery index, a measure of inflation and unemployment, fell in November to the lowest in almost six decades, underpinning the currency’s outlook. The jobless rate is forecast to hold at an eight-year low Friday as the Federal Reserve weighs the path of U.S. interest rates………………………………………..Full Article: Source

Reserve Bank bets on South Korean currency

Posted on 03 March 2016 by VRS  |  Email |Print

As negative interest rates make the euro and yen less attractive, one big bank is making a bet on the South Korean won. That bank is the Reserve Bank of Australia. And its move this week could be a bet that negative interest rates will be with us for a while.
The won got its endorsement, when the RBA said on Tuesday that it will invest 5 per cent of its $US50 billion worth of foreign-exchange reserves in the South Korean currency. That shift came at the expense of the RBA’s euro holdings, whose share of the balance sheet has fallen………………………………………..Full Article: Source

Switch to digital currency could endanger banks, warns Bank of England deputy

Posted on 03 March 2016 by VRS  |  Email |Print

Switching to a digital version of the pound could hit banks, investment and economic growth, according to one of the Bank of England’s deputy governors. Ben Broadbent, who is responsible for monetary policy at the central bank, warned that the introduction of an electronic version of sterling could “impair” the ability of banks to make loans.
Speaking at the London School of Economics, Mr Broadbent said that “if bank lending became scarcer, or more expensive, it’s likely that investment and economic activity would suffer”………………………………………..Full Article: Source

U.S. Treasury chief sees less risk of a global currency war after G20

Posted on 02 March 2016 by VRS  |  Email |Print

U.S. Treasury Secretary Jack Lew said Tuesday that he doesn’t expect an all-out global currency war anytime soon. Such risks are now “greatly, greatly reduced” after discussions held at a summit of G20 central bank and finance ministers over the weekend in Shanghai, Lew told a news briefing in Hong Kong.
“It adds a new commitment, which means there won’t be any surprises,” he said. “You won’t see countries acting in a way that triggers the kind of competitive devaluation that leads to a currency war — that’s very important.”……………………………………….Full Article: Source

Is currency devaluation overrated?

Posted on 02 March 2016 by VRS  |  Email |Print

A rip-roaring global debate is underway over whether currency devaluations are overrated as a means of enhancing national prosperity. An International Monetary Fund study suggests that between 1980 and 2014, a 10 percent depreciation by a country against the currency of a trading partner increased net exports by 1.5 percent of GDP.
The bulk of the increase came in the first year after depreciation. The conclusion now, however, is that devaluations are not having the same impact on GDP performance………………………………………..Full Article: Source

This country has nine currencies

Posted on 01 March 2016 by VRS  |  Email |Print

Managing your money in one currency is tricky enough for most people. Imagine having to keep track of nine. That’s a hard fact of life for many of Zimbabwe’s businesses, who have been forced into the role of foreign exchange dealers after the country’s dollar collapsed and was withdrawn from circulation.
They’ll trade in the U.S. dollar, Australian dollar, South African rand, Botswana pula, euro, British pound, Japanese yen, Chinese yuan and Indian rupee. “Most currencies are for trading purposes,” Reserve Bank Governor John Mangudya told CNNMoney. “50% of our trade is with China and South Africa so we need to allow trading in many currencies.”……………………………………….Full Article: Source

Emerging-Market Currencies Show Wear and Tear

Posted on 01 March 2016 by VRS  |  Email |Print

Finance ministers have vowed not to engage in currency wars to boost exports, but the scars from the financial crisis are still apparent. World finance ministers meeting at the G-20 summit in Shanghai this past weekend vowed not to engage in currency wars to boost exports.
But a look at emerging markets’ currencies shows plenty of battle scars since the global financial crisis that began in 2007. The Korean won is already approaching levels not seen since the financial crisis, while the Indian rupee has weakened against the U.S. dollar beyond levels set during a panic in emerging market assets during 2013………………………………………..Full Article: Source

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