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Brazilian Real’s Volatility Falls to Year Low Amid Intervention

Posted on 25 June 2014 by VRS  |  Email |Print

Brazil’s currency volatility dropped to a one-year low amid speculation the central bank will sustain the pace of its program to support the real. Three-month historical volatility fell 0.5 percent to 10.62 percent at the close of trading in Sao Paulo, the lowest since June 2013. The currency retreated 0.3 percent to 2.2250 per U.S. dollar.
The central bank announced June 6 that it was extending its foreign-exchange market intervention to support the real and limit import-price increases. The program had initially been scheduled to end this month. Brazil sold $198.7 million of foreign-exchange swaps today and rolled over contracts worth $494.3 million………………………………………..Full Article: Source

Commodity-Based Currencies Gain After China Data Show Growth

Posted on 24 June 2014 by VRS  |  Email |Print

Commodity-based currencies held on to most gains made against the dollar and the yen after a surprise jump in factory activity for China, the world’s second-largest economy, pointed to increased demand for the natural resources produced in Australia and New Zealand.
The Australian dollar rose 0.3% against the greenback to US$0.9418, and the yen slipped 0.1% against the Aussie to ¥95.97. The New Zealand dollar rose 0.1% versus the buck to US$0.8710, while the yen traded flat versus kiwi, as the New Zealand currency is also called, at ¥88.75………………………………………..Full Article: Source

A Gold Alternative? The Swiss Franc

Posted on 24 June 2014 by VRS  |  Email |Print

I’m a contrarian, so it is not surprising I like gold. There are lots of reasons to like gold but the key one is the distrust of inflation, or rather the belief that inflation will become rampant again.
This distrust is on many levels. One obvious one is the disconnect between the official figures and perceived inflation every time one buys the essentials of life. There is meant to be no inflation, but that’s not what our wallets tell us………………………………………..Full Article: Source

Should the Ruble Be a Global Currency?

Posted on 24 June 2014 by VRS  |  Email |Print

The Kremlin wants to boost the ruble’s global role and make it a reserve currency, but advisers of the Russian parliament’s council on financial regulation and monetary policy says Russia is simply not ready. For a currency to become a global reserve unit, its country needs economic stability, predictable inflation, a developed financial and debt market and an international recognition of its external policy.
The International Monetary Fund projected in April that the global economy will expand by 3.6% this year but warned that low inflation is one of the key downside risks to the forecast. Russia is unlikely to suffer from low inflation this year as consumer prices are expected to add at least 6%, while economic growth is seen at around 0.5%………………………………………..Full Article: Source

Trading the yuan: Yuawn

Posted on 23 June 2014 by VRS  |  Email |Print

Buzz about the rise of China’s currency has run far ahead of sedate reality. If headlines translated into trading volumes, the yuan would be well on its way to dominating the world’s currency markets. It once again graced front pages this week after moves to lift its status in London, the world’s biggest foreign-exchange market.
This was the latest instalment of a five-year-long public-relations campaign. Since 2009, when China first declared its intention to promote the yuan internationally, a string of announcements and milestones has cast the Chinese currency as a putative rival to the dollar………………………………………..Full Article: Source

Sudanese Currency Flirting With Record Low Against the U.S Dollar

Posted on 23 June 2014 by VRS  |  Email |Print

The Sudanese pound (SDG) appeared to be on the verge of hitting a new low milestone against the United States dollar (USD) which is likely to further aggravate the country’s economic woes. Currency dealers on the black market said that 1 USD is now trading for 9.6 SDG, up from 9.4 last week. Sudan’s Central Bank indicative exchange rate for the USD stood at approximately 5.7 SDG.
According to traders, the USD being in extremely short supply relative to the high demand pushed the SDG further down. Individuals and businesses alike monitor the informal market’s exchange rate to gauge the state of the economy and make plans accordingly………………………………………..Full Article: Source

China media: UK currency deal

Posted on 20 June 2014 by VRS  |  Email |Print

Media discuss China’s role in international finance after a key currency clearing deal with London. The Bank of England on Wednesday appointed one of China’s “big four” banks as the Chinese currency clearing bank in London. The announcement was made as Premier Li Keqiang signed various business deals with the UK during his visit.
Lu Zhengwei, chief economist at the Industrial Bank Co, tells the Global Times the deal “will help the yuan gain recognition before it expands its presence in the area [EU]“. Echoing similar views, the Southern Metropolis Daily says the deal is a “first step towards internationalisation of the yuan”………………………………………..Full Article: Source

Swiss National Bank Reaffirms Commitment on Currency Floor

Posted on 20 June 2014 by VRS  |  Email |Print

The Swiss National Bank on Thursday reiterated its pledge to intervene in the foreign-exchange market to prevent the Swiss franc from strengthening beyond 1.20 to the euro, saying the limit remains the “right tool” to curb upward pressure on the currency.
The Zurich-based central bank, which introduced the minimum exchange rate in September 2011, also held its target range for the three-month London interbank offered rate, or Libor, a key interest rate, at 0.0% to 0.25% for the 12th successive quarter………………………………………..Full Article: Source

City of London boosted by China currency trading move

Posted on 19 June 2014 by VRS  |  Email |Print

London will be the base for the first clearing bank outside Asia for the Chinese currency, supporting Britain’s push to be the leading western centre for offshore renminbi trading. People’s Bank of China (PBC), the country’s central bank, has appointed China Construction Bank as the UK’s first clearing bank for renminbi.
China, the world’s second-biggest economy, is promoting the use of its currency in international trade and is expected to further liberalise the renminbi in the next few years. London is competing with New York, Paris and other financial centres to be the top offshore renminbi centre outside Asia…………………………………..Full Article: Source

Iceland’s currency struggles to regain people’s trust

Posted on 19 June 2014 by VRS  |  Email |Print

Katla straightens a dark blue shirt on a hanger and smiles encouragingly at a customer who’s tentatively trying on a summer jacket. “It’s crazy,” she sighs. “We opened this shop just a week ago and we had to do it without a single loan from a bank - no one will lend you money here after the bank crash.”
Katla’s clothes shop, Oxney, is a boutique in central Reykjavik and she’s clearly proud of the beautiful, original collection she’s created by blending Icelandic and French designs. But she’s worried about the future of her business…………………………………..Full Article: Source

Alternatives to Currency Manipulation

Posted on 19 June 2014 by VRS  |  Email |Print

Switzerland, Singapore and Hong Kong, which have actively kept their currencies low since the global financial crisis, could have achieved the same outcome with less currency intervention and declining current account surpluses if they had followed easier fiscal and monetary policies. The global economy would have benefited too.
For the major advanced economies and the world as a whole, insuffi cient aggregate demand—that is, too little spending—impeded recovery from the Great Recession of 2008–09. By manipulating their currencies to boost their net exports, many countries made a bad situation worse for their trading partners, which saw demand shifted away. Th e world needs policies that increase total demand rather than policies that fi ght over the allocation of the existing amount of demand…………………………………..Full Article: Source

China’s push to build a global currency

Posted on 18 June 2014 by VRS  |  Email |Print

This was how Luo Ping, a senior official at the China Banking Regulatory Commission, vented his frustration at the US in 2009. He and others in China believed that, as the US Federal Reserve printed money to resuscitate American demand, the value of China’s US Treasury bond holdings would plunge along with the dollar.
“Once you start issuing $US1 trillion to $US2 trillion . . . we know the dollar is going to depreciate, so we hate you guys, but there is nothing much we can do,” he told a New York audience………………………………………..Full Article: Source

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Ruble Weakens Third Day as Russia Scales Back Currency Support

Posted on 18 June 2014 by VRS  |  Email |Print

The ruble weakened for a third day as Russia’s central bank said it will scale back how much it intervenes in the currency market. Bonds fell.
The ruble depreciated 0.3 percent to 40.3501 against the Bank of Russia’s target basket of dollars and euros by 6 p.m. in Moscow, when the central bank stops its market operations. The yield on local-currency debt maturing February 2027 rose three basis points to 8.75 percent, the highest level this month………………………………………..Full Article: Source

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The paradox of China’s push to build a global currency

Posted on 17 June 2014 by VRS  |  Email |Print

We hate you guys.” This was how Luo Ping, a senior official at the China Banking Regulatory Commission, vented his frustration at the US in 2009. He and others in China believed that, as the US Federal Reserve printed money to resuscitate American demand, the value of China’s vast US Treasury bond holdings would plunge along with the dollar.
“Once you start issuing $1tn-$2tn . . . we know the dollar is going to depreciate so we hate you guys – but there is nothing much we can do,” Mr Luo told a New York audience………………………………………..Full Article: Source

Bitcoin currency could have been destroyed by ‘51%’ attack

Posted on 17 June 2014 by VRS  |  Email |Print

Bitcoin has stared down an existential threat, after a consortium of miners briefly gained enough processing power to theoretically destroy the currency. For a few hours on Friday, mining pool Ghash.io controlled 51% of all the processing power being used to perform the calculations that keep bitcoin secure.
If it had abused that power, it would have had the ability to irreversibly take money from other users, simply by rewriting the register of who owns which bitcoins. But shortly after the threshold was breached, some members of the mining pool pulled their computing power from the group, averting – or at least, delaying – catastrophe………………………………………..Full Article: Source

Where will Bitcoin go?

Posted on 16 June 2014 by VRS  |  Email |Print

SwiftBoatVet, a Reddit user, posted a couple of screens it got while filling out a survey for PayPal. It seems the survey itself was revolving around Bitcoin, asking for direct comparisons of the two payment systems.
While this fits in quite well with the comments made recently by eBay’s (owner of PayPal) CEO, John Donahoe, who expressed the opinion PayPal could integrate Bitcoin, the survey itself turned out to be somewhat unclear since it treated Bitcoin more as a PayPal clone than a currency or payment system………………………………………..Full Article: Source

Digital currency association formed to boost uptake in Singapore

Posted on 16 June 2014 by VRS  |  Email |Print

A private sector initiative to boost local uptake of digital currencies such as Bitcoins has resulted in the formation of the Association of Crypto-Currency Enterprises and Start-ups, SIngapore (ACCESS).
In a statement released on Monday (June 16), ACCESS said it is a fully registered society with the Registry of Societies under the Ministry of Home Affairs (MHA) representing various businesses within Singapore’s Bitcoin and other cryptocurrency ecosystem. These businesses include exchanges, merchant transaction services, vending machines, and miners, it stated………………………………………..Full Article: Source

UK plans to make currency-rigging a crime but rejects EU rules

Posted on 13 June 2014 by VRS  |  Email |Print

British finance minister George Osborne rejected European Union plans to outlaw currency market manipulation on Thursday and instead set out his own proposals to make rigging exchange rates a criminal offence.
EU laws taking effect in 2016 will make it a criminal offence with a four-year jail term to rig key prices in a wide range of financial markets. But Osborne does not want these laws to apply in London, the world’s biggest centre for currency trading………………………………………..Full Article: Source

Why China May Continue Depreciating Its Currency?

Posted on 13 June 2014 by VRS  |  Email |Print

So you’ve heard it all. The 3% decline of the Chinese currency this year is just a small blip. The Chinese central bank engineered the depreciation just to scare off the currency speculators. China’s RMB will return to its upward climb soon enough.
Maybe not, says Carl Huttenlocher, chief investment officer of Hong Kong-based US$2.4 billion-under-management multi-strategy hedge fund Myriad Asset Management………………………………………..Full Article: Source

Currency market rigging could become criminal offence

Posted on 12 June 2014 by VRS  |  Email |Print

Rigging the foreign exchange, bond and commodity markets could become a criminal offence, the government will warn the City on Thursday as part of its latest effort to clean up the financial markets after a wave of scandals and allegations relating to key benchmarks.
Criminal offences for manipulating these global markets, which are based in London, will be among measures considered in a year-long review being launched by the chancellor, which was immediately criticised by Labour for being too late. It follows steps in 2012 to allow prison sentences of up to seven years for anyone involved in rigging the key interest rate benchmark Libor………………………………………..Full Article: Source

Why The US Dollar Will Eventually Stop Being The World’s Reserve Currency

Posted on 12 June 2014 by VRS  |  Email |Print

Of course, the US Dollar isn’t the only currency that nations maintain reserves of. The Euro is also a major reserve currency and the Yuan is fast becoming a major reserve currency. But since the USA produces 22% of all world output it happens to play a particularly special role in the global economy.
By virtue of being the largest economy in the world the accumulation of US dollar denominated financial assets happens to dominate the global financial system. It’s sort of like being the top market share producer of a particular product in a particular industry. Other entities accumulate your products because you’re the top producer. And that changes over time. Market shares change and regimes shift with the evolving economy………………………………………..Full Article: Source

PBOC keeps yuan traders guessing as currency rallies

Posted on 11 June 2014 by VRS  |  Email |Print

Recent gains after five months of declines attest to policymakers’ new norm of valuation swings, with central bank tweaks adding to volatility. Mainland policymakers have been saying since February that two-way swings in the yuan are the “new norm”. A surprise surge in the currency shows that they mean it.
Twelve-month non-deliverable forwards, which traders use to speculate or hedge, strengthened 0.9 per cent against the US dollar this week, their biggest advance since January 2012………………………………………..Full Article: Source

Zambia’s currency poised to strengthen

Posted on 11 June 2014 by VRS  |  Email |Print

Zambia’s local currency, the Kwacha, is expected to strengthen further this week after the Central Bank intervened to save the currency which had depreciated significantly against major currencies, the Zambia Daily Mail reported on Tuesday.
The Zambian currency lost its strengthen to the extent of being labeled among Africa’s worst performing currencies by analysts when it weakened by as much as 2.3 percent during the last week of May………………………………………..Full Article: Source

World needs currency modernisation

Posted on 10 June 2014 by VRS  |  Email |Print

For some time now, there has been concern that central bankers have “run out of bullets”. Having lowered their policy rates to near zero, they have engaged in increasingly extravagant measures such as “quantitative easing” and “forward guidance”.
Given the fog cast over real economic activity by the financial crisis, it is difficult to offer a definitive assessment of just how well or badly those measures have worked. But it is clear that there must be a better way to do things. There is no longer any reason to let the zero bound on nominal interest rates continue to hamper monetary policy………………………………………..Full Article: Source

Keep calm and carry on is the message from currencies

Posted on 10 June 2014 by VRS  |  Email |Print

Keep calm and carry on is the broad message from the currency market thanks to the generous support of central banks. Borrowing a currency at low interest rates and buying a rival sporting much higher short term yields is a nice little earner for investors, so long as market volatility remains quiescent.
As the European Central Bank becomes more accommodative with negative deposit rates and further easing expected this summer, the backdrop remains enticing for carry trades. Particularly as the US Federal Reserve appears set to keep its benchmark rates at very low levels for some time, after a May jobs report merely met expectations and plenty of slack remains in the world’s largest economy………………………………………..Full Article: Source

Barbados disagrees its currency should be devalued

Posted on 09 June 2014 by VRS  |  Email |Print

Barbados’ government does not support devaluing the Caribbean island’s currency and says it is determined to maintain its fixed exchange rate with the U.S. dollar. The Barbados dollar has been pegged 2-to-1 to the U.S. dollar since the 1970s. But some analysts believe the currency of the economically struggling country should be devalued.
Moody’s Investors Service has downgraded the island’s government bond rating by two notches from Ba3 to B3, citing “anemic economic growth” and “limited prospects for improvement.”……………………………………….Full Article: Source

Currencies: Survival of the weakest

Posted on 06 June 2014 by VRS  |  Email |Print

So the ECB has introduced negative deposit rates, as was widely expected. Whether this will work to boost bank lending is open to question; Denmark had negative deposit rates and it acted as a tax on them, which they had to recoup from customers. But it might work to weaken the euro; the single currency has dropped 0.6% against the dollar at the time of writing.
(This may be because the ECB did quite a lot more than making rates negative; it added a loan facility for non-financial companies, for example.) David Bloom at HSBC says that The ECB has argued it does not have an exchange rate target, but it is clear that a weaker EUR will be a critical element in the ECB achieving its inflation target………………………………………..Full Article: Source

Currency wars, will there be a winner?

Posted on 06 June 2014 by VRS  |  Email |Print

The race among central bankers to be the biggest dove continues unabated (including Draghi’s efforts today), and as a result , a low-risk return on capital has become even more difficult for investors. There aren’t many major currencies whose central bank wouldn’t be happy to see a decline, and while Draghi was careful to mention that the exchange rate was not a policy target as such, we all know which direction would make him happier.
As mentioned earlier the search for yield has resulted in added demand for the higher yielding currencies like AUD and NZD. There has also been demand for precious metals which have been under the cosh for some time. It’s not that there is a fear of a return to high inflation, but now that the era of negative interest rates is upon us, it’s just difficult to find a home for cash………………………………………..Full Article: Source

Euro/Dollar Direction Post-ECB Meeting Will Drive Gold

Posted on 05 June 2014 by VRS  |  Email |Print

Gold traders will keep track of the direction the U.S. dollar and euro take after the European Central Bank meets Thursday, as how the two currencies react will determine gold’s direction.
There’s some uncertainty about what the ECB will do because it has several options available to adjust monetary policy. General expectations among currency analysts are that the ECB will cut refinancing rates between 10 to 15 basis points and likely cut the deposit rate to minus 0.1%………………………………………..Full Article: Source

Lithuania to adopt euro currency in 2015

Posted on 05 June 2014 by VRS  |  Email |Print

The European Commission and the European Central Bank have approved Lithuania’s application to join the euro currency union, positioning the Baltic state to become the bloc’s 19th member.
Lithuania is set to adopt the euro currency in 2015, following a decision by the European Commission and European Central Bank on Wednesday. The largest of the Baltic states and the last one to join the euro, Lithuania has managed to fulfill all of the requirements of joining the common currency, from tempering inflation to keeping its government deficit in check, the Commission said………………………………………..Full Article: Source

Brazil Tax Change Could Boost Sinking Currency

Posted on 05 June 2014 by VRS  |  Email |Print

The Brazilian government on Wednesday took steps that could shore up its sinking currency, in a move possibly aimed at controlling inflationary pressures. Brazil’s Finance Ministry reduced the reach of its 6% IOF financial-transactions tax in a bid designed to encourage local firms to obtain financing abroad. The IOF now applies only to international loans and bonds with maturities of 180 days or less, down from 360 days.
Analysts say the measure will give companies, particularly smaller ones, greater ability to raise cash abroad. In bringing foreign currency into the country, they’ll create more demand for Brazilian reais………………………………………..Full Article: Source

Libyan currency under pressure as chaos, budget crisis deepen

Posted on 04 June 2014 by VRS  |  Email |Print

Libya’s currency is under heavy pressure as a breakdown in security and a collapse of oil revenues due to port blockades have badly disrupted public finances and an economy already burdened by exploding state salary and subsidy bills.
Over the past two months, the dinar has fallen more than seven percent against the dollar on the black market, its first weakness since rebels demanding autonomy for eastern Libya seized oil export facilities 10 months ago………………………………………..Full Article: Source

Apple may try to include virtual currency transactions in applications

Posted on 04 June 2014 by VRS  |  Email |Print

Apple Inc will let software developers include virtual-currency transactions in their applications, paving the way for new forms of money to appear on iPhones and iPads.
“Apps may facilitate transmission of approved virtual currencies provided they do so in compliance with all state and federal laws for the territories in which the app functions,” Apple said in an update to its App Store review guidelines. Apple did not provide details on the approved virtual currencies………………………………………..Full Article: Source

How Currency-Hedged ETFs Stack Up

Posted on 03 June 2014 by VRS  |  Email |Print

With over 1,600 exchange-traded funds to choose from, investors can essentially tap into any corner of the investable universe. Perhaps one of the most popular markets has been ETFs that offer exposure to equities outside of the U.S.. Not only do these funds add great diversification benefits, but they are significantly less expensive than mutual fund options.
When it comes to adding global exposure, it is important for investors to realize how currency exposure can seriously impact bottom line returns. Most international equity ETFs effectively establish a long position in the local currency and a short position in the U.S. dollar. When the value of the dollar is declining, that exposure can work in favor of U.S. investors, as exchange rate fluctuations enhance their returns………………………………………..Full Article: Source

Bitcoin’s Futile Quest to Be a Currency

Posted on 03 June 2014 by VRS  |  Email |Print

Bitcoin is a fascinating and ingenious technology, but most promoters are mindful of neither the monetary nor the tax issues. For all practical purposes IRS regulations issued in March preclude bitcoins from being used as an alternative currency.
The IRS treats bitcoins as property. The result is that bitcoin transactions trigger a taxable event. Buyers incur a tax liability for the difference in dollars between what they paid for a bitcoin when they acquired it and the dollar value attributed to the bitcoin when they spend it. Sellers of course are subject to a tax based on the dollar value of the bitcoins they receive for a good or service………………………………………..Full Article: Source

Russian ruble becomes only valid currency in Crimea

Posted on 03 June 2014 by VRS  |  Email |Print

The Russian ruble has officially become the only valid currency in Crimea, with the Ukrainian hryvnia being given the status of a foreign currency. The move is another step toward closer integration with Russia.
From June 1 all settlements and payouts in the peninsula, including salaries, pensions and social benefits will be done in Russian rubles, Vedomosti says citing the Central Bank of Russia (CBR)………………………………………..Full Article: Source

Bitcoin: Currency or commodity?

Posted on 02 June 2014 by VRS  |  Email |Print

Last fall we saw bitcoin receive an unusual amount of attention. The upstart crypto currency had an exponential rise from $125 to more than $1,125 per unit on Bitstamp, only to fall back below $500 this spring (see “It’s a $, it’s a €, it’s cryptocurrency,” right).
Additionally, the closing and bankruptcy of the Tokyo-based Mt. Gox (the largest bitcoin exchange with more than 600,000 customers) garnered substantial negative press and threatened the stability of bitcoin…………………………………….Full Article: Source

Bitcoin’s Futile Quest to Be a Currency

Posted on 02 June 2014 by VRS  |  Email |Print

Bitcoin is a fascinating and ingenious technology, but most promoters are mindful of neither the monetary nor the tax issues. For all practical purposes IRS regulations issued in March preclude bitcoins from being used as an alternative currency.
The IRS treats bitcoins as property. The result is that bitcoin transactions trigger a taxable event. Buyers incur a tax liability for the difference in dollars between what they paid for a bitcoin when they acquired it and the dollar value attributed to the bitcoin when they spend it. Sellers of course are subject to a tax based on the dollar value of the bitcoins they receive for a good or service…………………………………….Full Article: Source

International Currency Exchange up for sale

Posted on 02 June 2014 by VRS  |  Email |Print

Family-owned Lenlyn to offload ICE, one of the world’s largest bureau de change businesse, and its sister brand, Raphaels Bank. International Currency Exchange, one of the world’s largest bureau de change businesses, is up for sale just weeks after rival Travelex was sold to the owner of UAE Exchange for £1bn.
ICE, and its sister brand, Raphaels Bank, have been placed on the block after their parent company hired KPMG to sell them. Lenlyn Holdings, the family-controlled company which owns the pair, hired the accountancy firm to run an auction for the two brands following what is understood to have been a beauty parade of eight potential advisers…………………………………….Full Article: Source

Is Aussie Dollar ETF in Trouble?

Posted on 30 May 2014 by VRS  |  Email |Print

The Australian economy which has enjoyed steady growth over two decades has lately been witnessing a slump. Commodity abundance was the one of major driving forces of Australia – especially the base metals and energy product – that assisted the nation to dodge recession during the global financial meltdown.
However, slowdown in China, a major importer of Australian natural resources, falling prices of iron ore – Australia’s largest export, faltering consumer confidence thanks to government spending cuts and new tax burden in a 2014/15 federal budget have lately affected the nation’s growth………………………………………..Full Article: Source

Possible currency union within Eurasian Economic Union to be considered in future

Posted on 30 May 2014 by VRS  |  Email |Print

The issue of creating a currency union on the basis of the Eurasian Economic Union may be considered in the future, Russian First Deputy Prime Minister Igor Shuvalov said on Thursday.
“Sometime in future, we will have to look seriously at creating a financial union, or maybe even a currency union,” he said. “So far, this issue is outside the current agenda.” The Eurasian Economic Union Treaty was signed by the leaders of Russia, Belarus and Kazakhstan on Thursday………………………………………..Full Article: Source

Paper money is unfit for a world of high crime and low inflation

Posted on 29 May 2014 by VRS  |  Email |Print

Has the time come to consider phasing out anonymous paper currency, starting with large-denomination notes? Getting rid of physical currency and replacing it with electronic money would kill two birds with one stone.
First, it would eliminate the zero bound on policy interest rates that has handcuffed central banks since the financial crisis. At present, if central banks try setting rates too far below zero, people will start bailing out into cash. Second, phasing out currency would address the concern that a significant fraction, particularly of large-denomination notes, appears to be used to facilitate tax evasion and illegal activity………………………………………..Full Article: Source

Scotland: Separate currency ‘most likely’

Posted on 29 May 2014 by VRS  |  Email |Print

A separate currency is the most likely option for an independent Scotland, according to a report from Barclays. The report considers four currency options if Scotland votes Yes in the referendum, including a formal monetary union with the UK, an informal monetary union with the UK or so-called Sterlingisation, joining the euro area, and an independent currency under various monetary regimes.
The bank said it takes no stand on the political question of how Scotland should vote or which outcome is in the best interests of Scotland economically………………………………………..Full Article: Source

Renminbi is far from being a reserve currency

Posted on 29 May 2014 by VRS  |  Email |Print

Scarcely a week passes without news about the ascendance of China’s currency, the renminbi. But China has a long way to go before its currency can rival — let alone displace — the dollar as the dominant global reserve currency.
To be sure, China already plays a significant role in international trade and finance, with major financial centres like London and Frankfurt eagerly lining up for renminbi business. Recent speculation that China’s economy may soon be as large as America’s has boosted this interest further, causing many to believe — whether ruefully or gleefully — that the renminbi will soon dominate………………………………………..Full Article: Source

Currency Chaos in Venezuela Portends Write-Downs

Posted on 28 May 2014 by VRS  |  Email |Print

Doing business in any foreign country can be risky. Then there’s Venezuela. With the highest inflation rate in the Americas and at least five currency devaluations in the past decade, the South American country is a corporate guessing game.
In just over a year, Venezuela has concocted a system of three exchange rates, fueling a black market for greenbacks. While many multinational companies continue to cling to more-favorable exchange rates for accounting purposes, those days may be numbered………………………………………..Full Article: Source

Mexico central bank: No fears of ‘currency war’

Posted on 28 May 2014 by VRS  |  Email |Print

Mexico has enough currency reserves to withstand “jittery spirits” in currency markets, according to the Governor of the Bank of Mexico, Agustin Carstens, who brushed off fears of a “currency war”.
Carstens said he had faith in the U.S. Federal Reserve, which he believed had gone out of its way to reassure markets and stress that central banks should focus on growth and recovery rather than exchange rates………………………………………..Full Article: Source

Currency swings take toll on consumer groups and manufacturers

Posted on 27 May 2014 by VRS  |  Email |Print

Peroni and pushchairs may not have much in common. But SABMiller, the brewer, and Mothercare, the babywear and buggy retailer, share one problem: both are battling to contain the effect of currency fluctuations on their business.
Last year’s slide in the South African rand – along with currency weakness in Australia, Colombia, Peru and elsewhere – cost SABMiller some $400m in the year to end March, the group reported on Thursday. Mothercare meanwhile said depreciation in the rouble and other currencies would eat into the royalties they earn on international sales that now represent more than 60 per cent of group network sales………………………………………..Full Article: Source

Is bitcoin a viable currency? It’s probably too volatile

Posted on 27 May 2014 by VRS  |  Email |Print

While bitcoin remains a hot-button issue, most of the talk has centered on the technology of this virtual currency. There are lots of questions: Is bitcoin really secure? Is it truly anonymous? Can it be counterfeited? Are transaction costs actually lower?
I have a more fundamental question: Is bitcoin a viable currency? My answer is no, and not just because of the wild fluctuations in the value but because these fluctuations are destined to continue. A good currency serves three purposes………………………………………..Full Article: Source

Narendra Modi effect: Indian rupee best performing Asia-Pacific currency

Posted on 26 May 2014 by VRS  |  Email |Print

Boosted by capital inflows and euphoria around the incoming government, Indian rupee’s surge to 11-month high levels has made it the best performing currency in Asia-Pacific region against the US dollar so far in 2014.
With a gain of about 5.3 per cent since the start of this year, Indian rupee has sprinted ahead of its other Asia-Pacific peers, including Indonesia’s rupiah and New Zealand dollar, in terms of year-to-date rise, shows an analysis of various currencies vis-a-vis the Greenback………………………………………..Full Article: Source

Russia and China join forces in “de-dollarization” of currency reserves

Posted on 26 May 2014 by VRS  |  Email |Print

According to the statement made by Vladimir Putin during his recent visit to Shanghai, Russia and China have reached an unprecedented level of cooperation that encompasses aspects ranging from energy trading to military drills.
Moreover, the Russian President suggests that the two countries are working together in order modify the existing practices regarding currency reserves management. Washington should be very concerned………………………………………..Full Article: Source

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