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Resistible rise: China’s currency conundrum

Posted on 27 October 2016 by VRS  |  Email |Print

When Lehman Brothers imploded in September 2008, shaking the US financial system to its foundations, the dollar actually strengthened. Such is the privilege conferred by the world’s pre-eminent reserve and haven currency.
Whether the renminbi can ever achieve that status is what Eswar Prasad sets out to examine in Gaining Currency, a companion piece to his 2014 study The Dollar Trap. Prasad, a professor at Cornell University and holder of a chair in international economics at the Brookings Institution, shows just how significant the advantages of such a status are — and how hungry Beijing is to claim them………………………………….Full Article: Source

Dollar Awaits Commodities Effect

Posted on 26 October 2016 by VRS  |  Email |Print

On the economic data front today, investors have a break with no releases scheduled. Commodities from metals to energy have all received a lift after positive sentiment and optimism that the global economy is becoming more resilient than previously thought.
Jawboning is still a viable tool for central bankers after Bank of Canada Governor Stephen Poloz clarified in front of the Senate Banking Committee yesterday that his comments at last week’s press conference on future interest rate cuts from the BOC should not be taken lightly. The loonie is rebounding off of a 10-month low against the U.S. dollar, on the back of commodities and the revised comment…………………………………..Full Article: Source

EU’s common currency is anything but common

Posted on 26 October 2016 by VRS  |  Email |Print

It was Voltaire who famously noted that, “Common sense is not so common.” His words come to mind when thinking about Europe’s “common currency,” as the euro is often dubbed. Since stabilizing in the first quarter of 2015, the euro has been in a trading range between $1.05 and $1.15 with a few minor stabs outside that box, in either direction.
Two major tests of the bottom of that range ($1.05) “held support” (as traders like to say), and I suspect we are nearing a third such test, which may not hold, in my opinion…………………………………..Full Article: Source

Another Day, Another Record Low for the Chinese Yuan

Posted on 26 October 2016 by VRS  |  Email |Print

The currency’s weakness has revived memories of China’s surprise devaluation last August. China’s yuan hit its lowest since offshore trading was introduced in 2010 on Tuesday as the dollar remained strong across the board, trading near a nine-month high on expectations for a U.S. interest rate hike by year-end.
The Chinese currency’s fall of more than 1.5% since the end of September has prompted renewed suspicion among some in the market of a possible extended slide in the Chinese currency. It traded as weakly as 6.7882 yuan per dollar on Tuesday…………………………………..Full Article: Source

China Is Allowing The Yuan To Decline - But Not Too Much, Please

Posted on 25 October 2016 by VRS  |  Email |Print

China is not exactly an entirely free market economy as yet and one area where it definitely isn’t is in the exchange rate. This is what leads to those allegations of unfair trade practices and currency manipulation of course.
However, contrary to popular belief the yuan isn’t currently undervalued against the US dollar–if anything it’s over valued a bit. If there were full convertibility on the capital account the general reckoning is that there would be a flood of money out of China, something which would depress the rate further…………………………………..Full Article: Source

Why Trump’s slide may be hitting the Chinese yuan

Posted on 25 October 2016 by VRS  |  Email |Print

Chinese yuan fell to an all-time low offshore on Monday as Republican candidate Donald Trump’s slide in the polls emboldened Chinese officials to allow the currency depreciate more quickly, market strategists said.
“The only thing that kept [the dollar-yuan exchange rate] in check was the fear that if it fell too much, that would help elect Donald Trump,” said Greg Anderson, global head of currency strategy at BMO Capital Markets…………………………………..Full Article: Source

Pound’s fall fuels new bout of currency wars

Posted on 24 October 2016 by VRS  |  Email |Print

The collapse of the British pound this year (22 per cent versus the euro) has thrown an improvised explosive device into the currency wars and complicated what has become a fairly cosy world of co-ordinated monetary policy.
In Australia, it’s combining with the steadily devaluing yuan to put pressure on the incoming RBA governor, Philip Lowe, to loosen policy some more and stop the Aussie from rising. The trade-weighted index is back above 65, back at the April 2016 peak and near an 18-month high — up nearly 7 per cent in five months — while against the US dollar it’s still below the April high of US78c………………………………….Full Article: Source

Zimbabwe in currency mess

Posted on 24 October 2016 by VRS  |  Email |Print

Zimbabwe seems to be in a mess as a German company, Giesecke and Devrient, refused to print the country’s controversial new currency. The action of the company has forced President Robert Mugabe’s government to delay the introduction of the new currency amid worsening cash shortages.
The Reserve Bank of Zimbabwe (RBZ) announced in May that it will introduce bond notes that will be at par with the United States dollar to address liquidity challenges………………………………….Full Article: Source

Investors put off by Egypt’s tight control of currency

Posted on 21 October 2016 by VRS  |  Email |Print

The IMF has expressed concern that if Egypt continues to control the exchange rate of the pound, bottlenecks in the economy that have been building up due to a scarcity of foreign currencies will only increase and scare away much-needed investment to help revive growth.
“The Egyptians have been saying that they want to move to a [monetary policy] model that is determined by supply and ­demand,” said Masood Ahmed, the regional head of the IMF, as the fund released its latest assessment of the region ­yesterday. “We are basically keen to support moving to that objective and most observers agree that staying with the current model would create an increasing bottleneck in the economy.”……………………………………Full Article: Source

Venezuela: Saving The Currency

Posted on 21 October 2016 by VRS  |  Email |Print

Since their independence, Latin American countries have displayed a common fervor for populist socialism. Whether it is a residue of three centuries of European imperial rule, or simply a fondness for charismatic leaders – and an extraordinary talent for producing them – the widespread formula of clientelism and cronyism disguised as socialism has proven to have devastating consequences for the continent’s economic, social and political development.
Nowhere is this phenomenon displayed more clearly at present than in the Bolivarian Republic of Venezuela. The country is suffering its worst humanitarian and economic crisis in history, which calls for an urgent solution…………………………………….Full Article: Source

New Zealand Needs To Grab Every Carbon Credit It Can

Posted on 21 October 2016 by VRS  |  Email |Print

The Parliamentary Commissioner for the Environment’s recent report on agricultural greenhouse gas emissions highlights the need for agriculture to make meaningful progress in reducing its emissions. In New Zealand this is particularly important because agriculture is responsible for 48% of our emissions.
The Commissioner’s report follows disturbing analysis from the Ministry for the Environment, where a senior official this week advised that meeting New Zealand’s Paris Climate Agreement pledge could cost the country more than $70 billion, and see carbon prices rise to $300 a tonne if we are not part of international carbon markets…………………………………….Full Article: Source

World’s Fourth-Biggest Currency Trader Sees Euro Decline Ahead

Posted on 20 October 2016 by VRS  |  Email |Print

Deutsche Bank AG is sticking with its weaker euro call. The currency dropped to the lowest in almost three months and the world’s fourth-largest foreign-exchange trader says it’s got further to fall.
The bank sees the shared currency declining to $1.05 by year-end, more bearish than the $1.10 median estimate of analysts surveyed by Bloomberg. Traders will be watching the European Central Bank’s policy-setting meeting Thursday for signals about its monetary stimulus efforts, which haven’t prevented the euro from climbing this year……………………………………Full Article: Source

Sterling hits record lows against global currency basket

Posted on 20 October 2016 by VRS  |  Email |Print

The British pound isn’t looking too great. After suffering its biggest one-day drop on record immediately after June’s Brexit vote, renewed losses have seen it slump to a historic low against a global basket of currencies this week.
The Bank of England’s Broad Effective exchange rate index is an overall measure of sterling’s value, weighted by the value of the UK’s trade in goods and services with the rest of the world. This index has fallen to its lowest level since daily records started in 1990, meaning the pound is now lower in value against its main trading partners than at any time previously during this period……………………………………Full Article: Source

The Most Stable Currency On Earth Is Backed By … Carbon?

Posted on 20 October 2016 by VRS  |  Email |Print

In a race toward global catastrophe, the Earth’s climate has been setting records faster than Katie Ledecky. 2014 was the hottest year on record, until 2015 supplanted it in the record books. After months of history-making heat, it is almost certain that 2016 will take the crown.
Experts say that if we want to keep the global thermostat at a tolerable level, we’ll have to do more than drive Teslas and install solar panels. We’ll have to scrub decades of accumulated carbon pollution from the skies. Techno-utopians envision planet-saving machines that would vacuum up surplus greenhouse gases, but early attempts are costly and impractical. So far, our best tool is a tree……………………………………Full Article: Source

Will British Pound Remain Major Convertible Currency?

Posted on 19 October 2016 by VRS  |  Email |Print

It ranks as one of the most disingenuous claims ever made by a modern British politician. Buffeted by a balance of payments crisis, Britain was forced in 1967 to devalue the pound by nearly 15 percent against the dollar, prompting the then-prime minister, Harold Wilson, to try to reassure a skeptical public that it “does not mean that the pound here in Britain, in your pocket or purse, or in your bank, has been devalued.”
Britons soon found otherwise, as living standards were hit and prices skyrocketed because much of what consumers bought, including a bulk of their food, was imported…………………………………Full Article: Source

Yuan’s swift fall fans currency tensions

Posted on 19 October 2016 by VRS  |  Email |Print

The yuan is becoming a destabilizing factor in the foreign exchange market amid renewed speculation that China’s authorities would tolerate a weaker currency to support the economy.
The Chinese currency has been depreciating at a faster pace since the end of the National Day holiday period in early October, spurring speculation that it could even hit 7 to the dollar. The trend could throw the market into turmoil by triggering a devaluation war with other Asian currencies…………………………………Full Article: Source

‘The Euro is FINISHED’ Currency’s creator says it will soon COLLAPSE and destroy the EU

Posted on 18 October 2016 by VRS  |  Email |Print

The Euro is a ticking time bomb which will soon blow up and wipe out the whole EU project in its wake, the currency’s creator has said in an extraordinary warning. In an explosive intervention professor Otmar Issing predicted that Brussels’ dream of a European superstate will finally be buried amongst the rubble of the crumbling single currency he designed.
The respected economist launched a withering attack on eurocrats and German leader Angela Merkel, accusing them of betraying the principles of the euro and demonstrating scandalous incompetence over its management…………………………………..Full Article: Source

China in Better Shape to Avoid Currency-Manipulator Designation by U.S.

Posted on 18 October 2016 by VRS  |  Email |Print

China now meets only one of U.S. Treasury’s three criteria for such a labeling, fewer than Germany or Japan. China’s currency policy may be the subject of complaints on the U.S. presidential campaign trail. But the Asian country is arguably now further from being a currency manipulator than Germany, Japan and even Switzerland.
That is according to the U.S. Treasury Department, which twice a year evaluates the currency policies of its major trading partners and determines whether any of those countries is gaining an unfair trade advantage by weakening its currency…………………………………..Full Article: Source

Euro is a ‘house of cards’ ready to collapse, key single currency architect warns

Posted on 17 October 2016 by VRS  |  Email |Print

The Euro currency project is unworkable in its current form and at the risk of “collapse”, its principal architect has warned. Professor Otmar Issing, the European Central Bank’s first chief economist who helped create the single currency at the turn of the century, has warned that the Euro cannot survive in its current form.
He said the ECB had become dangerously overextended as it tries to manage the 19 economies using the single currency. He said: “One day, the house of cards will collapse”……………………………………..Full Article: Source

China moves a step closer to coming off US currency watchlist

Posted on 17 October 2016 by VRS  |  Email |Print

Treasury appraisal comes as Donald Trump accuses Beijing of manipulation. The Obama administration has taken a step towards dropping China from a US currency manipulation watchlist even as Republican candidate Donald Trump promises to declare Beijing a manipulator on day one of his presidency.
Trump has accused China repeatedly of currency manipulation and using the policy to suck jobs out of the US. He has vowed to impose punitive tariffs on its imports into the US in a move economists fear could set off a trade war between the world’s two biggest economies……………………………………..Full Article: Source

US sees no currency manipulation, adds Switzerland to watch list

Posted on 17 October 2016 by VRS  |  Email |Print

The U.S. Treasury said on Friday that none of the United States’ major trading partners is manipulating its currency to gain advantage for its exports, in contrast to Republican presidential candidate Donald Trump’s threats to declare China a currency manipulator if he is elected.
In its 16th and final currency report under President Barack Obama, the Treasury said it added Switzerland to a foreign exchange “monitoring list” of countries with high external surpluses or currency market interventions……………………………………..Full Article: Source

Top Yuan Forecaster Upbeat as Currency Sinks to Six-Year Low

Posted on 14 October 2016 by VRS  |  Email |Print

Yuan bears have little to celebrate, according to the currency’s top forecaster. While the yuan’s slump to a six-year low this week has fueled speculation of a faster depreciation, Landesbank Baden-Wuerttemberg predicts further losses will be limited to 0.3 percent this year and another 0.7 percent in 2017.
The currency may even start to rebound toward the end of next year as inflows rise and companies taper foreign debt repayments, said Julian Trahorsch, an economist at the German bank, the most accurate forecaster of the yuan as ranked by Bloomberg……………………………………Full Article: Source

Is the Euro currency going to continue to rise?

Posted on 14 October 2016 by VRS  |  Email |Print

Tom Hampton, head of corporate dealing at Foremost FX writes exclusively for What Investment on the prospects for the Euro as a currency. The euro has been a controversial and volatile currency since it was first introduced on January 1st 1999.
Opposed by many but pushed through tough negotiations (particularly from the UK and Denmark) the Maastricht Treaty created an economic and monetary union for all states except the UK and Denmark. Upon introduction, all member state currencies were fixed against the single currency, causing much controversy as euro notes and coins were not introduced into circulation until 2002……………………………………Full Article: Source

Pound at Weakest Level in History Against Currency Basket

Posted on 13 October 2016 by VRS  |  Email |Print

The pound touched a historic low against a basket of global currencies, meaning it has likely never been weaker when measured against those of Britain’s trading partners. While the pound recently traded at a 31-year low against the dollar, and a six-year low against the euro, on Tuesday it hit its weakest level ever against a trade-weighted basket of currencies.
The Bank of England’s Broad Effective exchange-rate index for the pound shows that the currency is worth less now than it was at the height of the 2008-2009 financial crisis or in 1992 and 1993, in the aftermath of Black Wednesday, when sterling left the European Exchange Rate Mechanism……………………………………..Full Article: Source

Don’t worry about the pound’s fall, says top Bank official

Posted on 13 October 2016 by VRS  |  Email |Print

A top Bank of England official dismissed concerns about falls in the value of the pound yesterday as Remain campaigners claimed Brexit was making Britain ‘poorer’. Michael Saunders, a member of the bank’s Monetary Policy Committee, which sets interest rates, said the reduced value of sterling was ‘not a cause for concern’, and simply reflected the currency adjusting to life after the Brexit vote.
‘If all that is happening is that we are adjusting quickly to a new equilibrium, to me that is not a cause for concern,’ he told MPs. Mr Saunders said it would not be a surprise to see the pound fall further given the size of Britain’s current account deficit……………………………………..Full Article: Source

Renminbi to become trading currency of choice for UAE businesses

Posted on 13 October 2016 by VRS  |  Email |Print

Renminbi (RMB) is fast emerging as trading currency of choice among the UAE based businesses, according a study by HSBC Commercial Banking. Nearly half of businesses (49 per cent) surveyed in the UAE forecast that the RMB will become an international trading currency in the next 5 years, up 5 per cent from 2015.
In the poll of 1,600 decision-makers across 14 countries, the UAE’s increased confidence in the future of the currency places it just third after China and Taiwan……………………………………..Full Article: Source

Sterling Is Trading Like an Emerging Market Currency

Posted on 12 October 2016 by VRS  |  Email |Print

Is the British pound the new Mexican peso? U.K. markets are now dancing to an emerging-markets beat as the violent sell-off in the pound this month has triggered a rise in government bond yields as investors look to reprice U.K. sovereign risk.
Amid rising fears that the U.K. will take a big economic hit from its move to leave the European Union, the correlation between the pound and an index of emerging-market currencies has jumped to levels last seen since the run-up to the Brexit vote……………………………………….Full Article: Source

Pound worth less than a euro at airports

Posted on 12 October 2016 by VRS  |  Email |Print

Sterling’s dramatic drop in the markets has been one of the key stories following the UK’s vote for Brexit, with experts variously claiming it could either help or hinder the economy.
In terms of the effects that can already been seen, however, it is those travelling abroad who are being particularly hard hit with the pound getting less money abroad than it used to. Earlier this week, sterling fell below $1.20, hitting a new 31-year low against the dollar and now the BBC reports it is worth less than the dollar – and the euro - at airports……………………………………….Full Article: Source

Goldman Sachs warns China’s currency outflows may be worse than they look

Posted on 12 October 2016 by VRS  |  Email |Print

China’s currency outflows may be bigger than they look, with Goldman Sachs warning that a rising amount of capital is exiting the country in yuan rather than in dollars. While the nation’s foreign-exchange reserves have stabilised and lenders’ net foreign-exchange purchases for clients have fallen close to a one-year low, official data show that US$27.7 billion in yuan payments left China in August.
That’s compared with a monthly average of $4.4 billion in the five years through 2014. Such large cross-border moves can’t be explained by market-driven factors and need to be taken into account when measuring currency outflows, according to MK Tang, Hong Kong-based senior China economist at Goldman Sachs……………………………………….Full Article: Source

Britain should embrace weaker pound and it needs to fall further, says former BoE govenor and currency guru

Posted on 11 October 2016 by VRS  |  Email |Print

The slump in sterling is a blessing in disguise after years of overvaluation and helps to break the corrosive stranglehold of the financial elites over the British economy, according to a former bail-out chief for the International Monetary Fund.
“It is desirable from every point of view. The idea that Britain is in crisis or is on its knees before the exchange rate vigilantes is ludicrous,” said Ashoka Mody, the IMF’s former deputy-director for Europe and now at Princeton University. “The UK economy is rebalancing amazingly well. It is a stunning achievement that a once-in-fifty-year event should have gone to smoothly,” he told the Telegraph………………………………….Full Article: Source

Nigeria’s case study on how not to float your currency

Posted on 11 October 2016 by VRS  |  Email |Print

Rumors of rate fixing. Scarcity of foreign exchange. A widening gap between the official rate and the runaway blackmarket. Nearly four months after Nigeria adopted a flexible exchange rate policy to avoid these very problems, the problems are all still here and in many ways, worse than they were before the policy change.
So, how has Nigeria managed to sharply devalue its currency while worsening the very problem the devaluation was meant to solve? The answer is a combustible mix of bad sequencing and the primacy of petrol prices………………………………….Full Article: Source

Renminbi eyes lows as China enjoys reserve currency status

Posted on 10 October 2016 by VRS  |  Email |Print

A new era of international acceptance of the renminbi will begin when onshore trading of the currency resumes on Monday after a nine-day break when offshore rates neared six-year lows.
Last week’s weakness has pushed the gap between the two rates to a three-month high — something Beijing has been trying to minimise as it seeks to curb capital outflow pressures. A sharply weaker offshore rate sends a signal that international investors are betting on currency weakness and risks triggering renewed capital flight……………………………………….Full Article: Source

Currency Swings Worsen as Wall Street Steps Back

Posted on 10 October 2016 by VRS  |  Email |Print

Wall Street’s retreat from currency trading may be reducing risk at the banks, but it is contributing to bouts of extreme volatility in the foreign-exchange market. Wall Street’s retreat from currency trading may be reducing risk at the banks, but it is contributing to bouts of extreme volatility in the foreign-exchange market.
Currency analysts say that was evident on Friday, when the British pound plummeted from $1.26 to $1.18 in a matter of minutes during early-morning trading in Asia, with some electronic platforms recording trades below $1.15……………………………………….Full Article: Source

Rand Bulls See Currency Breaking Five-Year Pattern of Declines

Posted on 10 October 2016 by VRS  |  Email |Print

The rand is on the verge of bucking a five-year losing trend. Instead of holding a trajectory that has seen it lose more than 50 percent of its value against the dollar since 2011, South Africa’s currency may be about to end a pattern of annual declines, according to Informa Global Markets, which analyzes technical trends.
The most-accurate rand forecasters support the view that the rand will continue to benefit from the global clamor for yield……………………………………….Full Article: Source

Yuan’s reserve currency status no game changer for corporates

Posted on 07 October 2016 by VRS  |  Email |Print

The inclusion of the Chinese yuan in the International Monetary Fund’s basket of reserve currencies on Oct. 1 will not meaningfully increase its usage by multinationals — at least for the moment, experts say.
“The direct impact on corporate finance will be minimal,” said Evan Goldstein, global head of renminbi solutions at Deutsche Bank in Hong Kong. “It is another signpost along the journey towards [the yuan’s] internationalization.” Yuan are commonly referred to as renminbi……………………………………….Full Article: Source

Zimbabwe’s Currency Phobia

Posted on 07 October 2016 by VRS  |  Email |Print

There is fear in the air, and it is palpable. At the end of this month, the Reserve Bank of Zimbabwe (RBZ) is planning to introduce bond notes, a so-called surrogate currency of the US dollar. Very few people want them, except government and the country’s central bank.
The majority of Zimbabweans, including grannies sleeping on pavements and queuing patiently to withdraw their pensions from banks, would rather toil in the long bank queues to have the US dollar than anything brought about by government……………………………………….Full Article: Source

Euro: Disgusting currency lets Germany control entire EU

Posted on 06 October 2016 by VRS  |  Email |Print

The modern financial system was created for the oppression of national states. Any society in today’s world exists to serve the interests of international financial corporations. The power is concentrated in the hands of an international group of financiers that move capitals from one country to another.
To gain true independence, a country should regain control of its national currency. Pravda.Ru conducted an interview on the subject with Valerie Bugo, Doctor of Law in the field of international financial transactions, a specialist in the field of politics and, as she herself defines, geopolitics of cash flows. …………………………………Full Article: Source

Pound Nears Record Low Against Currency Basket

Posted on 06 October 2016 by VRS  |  Email |Print

U.K. currency also plumbs new 31-year lows against dollar, touches fresh five-year low against euro. The British pound fell close to its lowest level in history against a basket of trade-weighted currencies this week, as investors continue to worry about the terms of the country’s planned exit from the European Union.
Sterling touched a fresh 31-year low against the dollar and a new five-year low against the euro on Wednesday before trading slightly higher against both currencies………………………………….Full Article: Source

The pound hits a 31-year low - but how low can it go?

Posted on 05 October 2016 by VRS  |  Email |Print

The pound has fallen to a 31-year low against the US dollar, pushed down by the latest market jitters surrounding Brexit. Sterling had already fallen sharply following the referendum, leaving markets, businesses and Britons asking: what next?
The average analyst thinks the fall in sterling is probably over. The market consensus is that the pound will stay at roughly $1.28 for the next six or nine months, before edging up to $1.30 in the second half of 2017 and creeping up over the next few years, ending up back at $1.55 in 2020…………………………………….Full Article: Source

Why the yuan will never be a true international currency

Posted on 04 October 2016 by VRS  |  Email |Print

And half the annual rainfall of Spain in centi-fathoms per square inch is equal to the average speed of a fleeing ground squirrel in furlongs per week. Well, if we want to talk trivia, why not? Trivia is what I call Beijing’s obsession with the ranking of the yuan as a payment currency for international trade.
Let’s get some things straight. There are only two international currencies in the world and if you eliminate the internal trade of Fortress Europe as not entirely international then there is only the US dollar……………………………………….Full Article: Source

Don’t hype China’s reserve currency moment

Posted on 04 October 2016 by VRS  |  Email |Print

In the days ahead, the financial pages will convulse with excitement about China’s reserve-currency milestone. On Saturday, Beijing’s desire to unseat the dollar got a big boost as it formally secured the International Monetary Fund’s good housekeeping seal.
But as the yuan enters the IMF’s top-five currency basket, it’s worrisome to see the man behind this breakthrough effectively sidelined. No, Zhou Xiaochuan, People’s Bank of China governor for nearly 14 years, isn’t losing his job……………………………………….Full Article: Source

China’s Yuan Just Joined An Elite Club Of International Monetary Fund Reserve Currencies

Posted on 03 October 2016 by VRS  |  Email |Print

China’s yuan joins the International Monetary Fund’s basket of reserve currencies on Saturday in a milestone for the government’s campaign for recognition as a global economic power. The yuan joins the U.S. dollar, the euro, the yen and British pound in the IMF’s special drawing rights (SDR) basket, which determines currencies that countries can receive as part of IMF loans.
It marks the first time a new currency has been added since the euro was launched in 1999.The IMF is adding the yuan, also known as the renminbi, or “people’s money”, on the same day that the Communist Party celebrates the founding of the People’s Republic of China in 1949……………………………………..Full Article: Source

Yuan Becomes World’s Fifth Reserve Currency, Can Bitcoin Be Sixth?

Posted on 03 October 2016 by VRS  |  Email |Print

On 1st October 2016, the Chinese Yuan became the world’s 5th reserve currency. What does it take to become one and can Bitcoin get there? What are reserve currencies? The term reserve currencies today denotes currencies which form part of the International Monetary Fund’s SDR (Special Drawing Rights) basket. SDR was created by the IMF in 1969 as a reserve asset, as there was a shortage of existing reserve assets (gold and the US Dollar) to support the expansion of world trade.
The currencies which form part of the SDR basket are the US Dollar, Euro, Japanese Yen, Pound Sterling and from 1-Oct, Chinese Yuan. The US Dollar will continue to constitute the major currency in the SDR basket, with a weight of 47%……………………………………..Full Article: Source

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

Posted on 30 September 2016 by VRS  |  Email |Print

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

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

Posted on 30 September 2016 by VRS  |  Email |Print

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

Yuan Derivatives Trade Dries Up as Drop Swells Hedging Costs

Posted on 29 September 2016 by VRS  |  Email |Print

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

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

Posted on 29 September 2016 by VRS  |  Email |Print

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

The Impact of Commodities on FX Markets

Posted on 28 September 2016 by VRS  |  Email |Print

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

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

Posted on 28 September 2016 by VRS  |  Email |Print

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

Currency traders waiting on Czexit signs

Posted on 28 September 2016 by VRS  |  Email |Print

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

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December 2016
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