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Commodities Briefing - Category | Currencies more

Dollar beat all currencies in 2014

Posted on 05 January 2015 by VRS  |  Email |Print

The dollar continued its world-beating ways on speculation the Federal Reserve will raise interest rates this year while other central banks extend stimulus measures. The US currency climbed versus all of its 16 major peers in 2014 and extended those gains Friday as two manufacturing gauge signaled expansion.
The euro slumped to a 4 1/2-year low after European Central Bank President Mario Draghi said he can’t exclude the risk of deflation and signaled the likelihood of quantitative easing is increasing. The Swiss franc weakened to parity with the dollar for the first time in four years and the pound fell as UK factory output slowed………………………………………..Full Article: Source

Commodities to stay volatile in 2015 on strong dollar

Posted on 02 January 2015 by VRS  |  Email |Print

Commodities capped the biggest annual loss since the global financial crisis in 2008, retreating for a record fourth year, as a global glut spurred a rout in oil prices and a stronger dollar cut the allure of raw materials.
The Bloomberg Commodity Index, which tracks 22 products from crude to copper, ended 1.7% lower at 104.3285 points on Wednesday, after dropping as much as 1.8% to the lowest since March 2009 earlier. It lost 17% last year, with crude, gasoline and heating oil the biggest decliners. The fourth year of losses was the longest run since at least 1991………………………………………..Full Article: Source

Euro starts new year at new lows in Asia

Posted on 02 January 2015 by VRS  |  Email |Print

The euro started the new year at 29-month lows in Asia after the head of the head of the European Central Bank fanned expectations it would take bolder steps on stimulus this month, so underlining the U.S. dollar’s rate advantage.
In an interview with German financial daily Handelsblatt, Mario Draghi said the central bank stood ready to respond to the risk of deflation. Consumer price data for the euro zone due on Jan. 7 are widely expected to show a fall in annual terms………………………………………..Full Article: Source

China quietly joins Asia’s currency wars to avert deflation

Posted on 23 December 2014 by VRS  |  Email |Print

China is exposed like a sore thumb as countries devalue on all sides, from Russia, to Japan, Indonesia and Malaysia. China has for the first time warned openly about the excessive strength of the Chinese yuan, a sign that the country may be shifting its exchange rate policy as deflation takes hold and currencies slide across Asia.
Yi Gang, the deputy governor of the People’s Bank of China (PBOC), said the yuan’s rise had been “very fast” over the past year as it surges in tandem with the US dollar, making it the world’s second strongest currency………………………………………..Full Article: Source

Russian currency may reach 61 rubles vs dollar in 2015 with current oil prices — Kudrin

Posted on 23 December 2014 by VRS  |  Email |Print

The Russian currency may reach 60-61 rubles to the dollar by late 2015, if the world oil prices stay at their current level and the West does not tighten its sanctions against Russia, former Finance Minister Alexey Kudrin said on Monday.
“If oil prices stay at the current level, the sanctions are not tightened and the government takes sound measures, the ruble exchange rate will even strengthen in the first quarter of 2015,” Kudrin said. World oil prices are currently hovering at slightly over $60 per barrel. “By the end of the year (2015), it may reach its current value of about 60-61 rubles to the dollar,” he said………………………………………..Full Article: Source

Precious metals- a hedge against volatility in paper currency

Posted on 22 December 2014 by VRS  |  Email |Print

The observation of modern finance through the lens of sound money requires an onion peeler. Each time I imagine onions, I think of my soft contact lens patients; the ones who abuse them. I think of the patients who wear them too long or through periods of mild irritation or redness and practice poor hygiene.
Soft contact lenses mask normal corneal sensitivity. They act like tiny onion goggles. With soft lenses in place, one can literally chop onions and not feel the normal irritating sensation at all. The problem is they tend to be the last to know about the trouble………………………………………..Full Article: Source

Rouble crisis sparks run on Belarus currency

Posted on 22 December 2014 by VRS  |  Email |Print

Belarussians were in a panic over the Russian rouble’s plunge, rushing to convert their savings to dollars and euros as they fear a devaluation of their currency. The run on the Belarussian rouble forced the central bank to announce a “temporary” tax of 30 percent on all purchases of foreign currency. The bank also required all exporters to convert half of their foreign revenues into local currency.
Interest rates were raised to encourage Belarussians to keep their money in their bank accounts, according to a statement published on the central bank’s website. The Belarussian rouble is not officially pegged to the Russian currency, but the ex-Soviet country’s economy is heavily dependent on its giant neighbour………………………………………..Full Article: Source

Deadline to exchange pre-2005 currency notes ends on January 1

Posted on 22 December 2014 by VRS  |  Email |Print

People have only 11-days left to exchange currency notes of various denominations, including 500 and 1,000, which were printed before 2005. The deadline for exchanging the pre-2005 notes is January 1, 2015.
The Reserve Bank has so far shredded 144.66 crore such notes valued at Rs 52,855 crore since the launch of the drive to take out the pre-2005 notes from the circulation. Post-2005 notes have added security features and help in curbing the menace of fake currency………………………………………..Full Article: Source

Ruble Crisis Ripples Through Wheat as Bulls Advance: Commodities

Posted on 22 December 2014 by VRS  |  Email |Print

The ruble crisis is rippling through the global wheat market. As Russia’s currency extended a plunge to a record low against the dollar last week, the nation slowed grain shipments to preserve stockpiles and keep domestic prices in check. Russia is the fourth-largest exporter and the measures spurred hedge funds to triple their bets on higher prices.
Futures jumped to the highest since May last week after an exporters’ association said Russia denied certificates that grain sellers and buyers need………………………………………..Full Article: Source

Russia’s currency crisis poses risks to other emerging markets

Posted on 19 December 2014 by VRS  |  Email |Print

The rouble’s volatility has turned deteriorating sentiment into a sharper, broad-based sell-off that is even affecting oil importing countries. In August 1998, Russia announced it would devalue the rouble and default on its domestic debt. The crisis sent shockwaves through the global financial system and led to the collapse of Long-Term Capital Management, a US hedge fund.
The fact that parallels are now being drawn between the currency crisis that Russia is suffering and the country’s 1998 default speaks volumes about the severity of the turmoil that has engulfed Russia’s financial markets and led to sharp declines in other emerging market assets………………………………………..Full Article: Source

13 reasons why the Russian currency crisis is a game changer

Posted on 19 December 2014 by VRS  |  Email |Print

Russia has finally lost the economic war on the West, that much is clear. The Russian rouble turned to ‘rubble’ in the last few days as the once great currency went into free fall.
But what is still uncertain is what kind of knee-jerk reaction President Vladimir Putin might try next in a bid to keep his hand on the reins of power. We take a look at the key factors in what will inevitably evolve into an international game changer – if it hasn’t already………………………………………..Full Article: Source

Russian currency collapses: rouble trouble

Posted on 18 December 2014 by VRS  |  Email |Print

Will Russia’s economic woes finally force Vladimir Putin to stop his adventurism and concentrate on problems at home? Russia’s attempt to defend the rouble by pushing up interest rates has failed miserably, as such reactions often do. After a slight rally following the central bank’s intervention, the currency was on the slide once more because the economy’s problems are far more deep-seated than can be dealt with through monetary policy alone.
The fall in oil prices has painfully exposed the Russian economy’s dependence upon world consumption at a time of falling demand. Moscow has also found itself at the mercy of Saudi Arabia, which could have pushed Opec to cut supplies and restore prices, but chose not to. That was mainly to see off the threat from American shale, but also gave the Saudis the chance to hurt Russia for supporting their enemies in Syria and Iran…………………………………….Full Article: Source

Nigeria’s Currency at Record Low

Posted on 18 December 2014 by VRS  |  Email |Print

Nigeria’s currency slumped to an all-time low against the U.S. dollar Wednesday, pummeled by the tumbling price of oil, rendering the central bank’s staunch efforts to stem the decline ineffective.
The dollar rose as high as 187 naira in early afternoon, eclipsing a previous record of 186.90 set on Dec. 2. That brings the buck’s year-to-date climb against the naira to 16.8% and its appreciation so far in December to 4.7%…………………………………….Full Article: Source

The falling rouble – all you need to know about Russia’s currency crisis

Posted on 17 December 2014 by VRS  |  Email |Print

Economic and political headwinds are battering Russia whose currency has been weakened by the freefalling oil price and western sanctions. The Russian central bank raised interest rates to 17% in an attempt to prevent the rouble’s collapse. But the dramatic move failed to stem the decline, with the currency hitting new all-time lows against the dollar.
Russia’s central bank has taken the drastic step of raising its main interest rate to 17%, a rise of 6.5 percentage points. The announcement – made around 1am local time – is a desperate attempt to restore confidence in the rouble, which has almost halved in value against the dollar in six months. Last week, the central bank raised rates by 1%, but this failed to calm jitters about an economy that is suffering from falling oil prices and western sanctions……………………………………..Full Article: Source

Rouble Woes: Six Stages Of A Currency Crisis

Posted on 17 December 2014 by VRS  |  Email |Print

With the rouble on extremely shaky ground, it is far from certain that the IMF would be willing to come to Russia’s rescue. If you’ve never witnessed a currency crisis, here’s how they usually go, in six simple steps:
1. Your currency gradually creeps downwards. This can happen over a matter of months as your current account deficit - the country’s ledger with the rest of the world - deteriorates. 2. Suddenly, overnight, investors panic. Their withdrawals of money from your country, until now a steady stream, become a flood……………………………………..Full Article: Source

Russian ruble’s fall: A classic ‘currency collapse’

Posted on 17 December 2014 by VRS  |  Email |Print

The decline of the ruble is the result of Western policy. The question now is how will Putin respond? The Russian economy was already in the running for having the worst year in 2014, sandwiched somewhere between Congressional Democrats and Sony Entertainment Pictures.
Then the price of oil—the commodity upon which the Russian economy is built—began to fall sharply, draining the nation’s economy of foreign money and crimping its growth. This dynamic drove the ruble sharply lower, culminating in an 11% drop on Monday, which forced Russia’s central bank to raise interest rates by a whopping 650 basis points, all but assuring a deep and painful recession in 2015……………………………………..Full Article: Source

Russian Ruble Crashes to World’s Worst-Performing Currency

Posted on 16 December 2014 by VRS  |  Email |Print

The ruble collapsed by 10 percent against the U.S. dollar Monday earning the Russian currency the dubious laurels of the world’s worst-performing currency this year. The Russian currency has now fallen 49.3 percent against the greenback since January, according to data from the Moscow Exchange. The drop takes it below the Ukrainian hryvna, which has weakened 47.9 percent in 2014.
Monday’s plunge was the largest single-day fall for the ruble since the financial crisis of 1998 when Russia was forced to default on its debt after exhausting its reserves in a fruitless bid to prop up the currency………………………………………Full Article: Source

Which poorly performing currency will rise in 2015?

Posted on 16 December 2014 by VRS  |  Email |Print

The Russian rouble is among the worst-performing currencies this year, shedding nearly 40 percent of its value against the U.S. dollar year to date. The recent slump in energy markets could signal more losses ahead, following central bank governor Elvira Nabiullina’s decision last month to tie the rouble’s fortunes to the price of oil.
Fuel prices have been in a downtrend since June, losing nearly 50 percent of their value, on the back of a price war waged by OPEC (the Organization of Petroleum Exporting Countries) against the U.S. shale producers and as demand from China decreased amid slowing growth………………………………………Full Article: Source

Rupee stands tall amid currency slides, likely to take emerging market crown

Posted on 15 December 2014 by VRS  |  Email |Print

The Indian rupee is poised to end the year as the best-performing major emerging market currency versus the US dollar as hopes of economic and political stability drew funds despite a slide in peer currencies such as Russia’s rouble and Brazil’s real on fund flow back to the US expecting higher interest rates.
In contrast to 2013 when the rupee was the worst performer sliding about 12.36 per cent (according to ETIG data), the currency is down less than a percentage this year as foreign funds invested Rs 2.62 lakh crore or around $42 billion in equity and debt, data from the Securities and Exchange Board of India ( Sebi) showed………………………………………..Full Article: Source

Russia loses trust in its currency

Posted on 15 December 2014 by VRS  |  Email |Print

The Russian ruble continues to fall dramatically. The official rate of the dollar for December 13-15, set by the Central Bank, is 56.8919 rubles. The euro has reached 70.5289 rubles. Russian prime minister Dmitry Medvedev said that “the ruble has had many crises, but then it became stronger; we need to stay patient and everything will be good, we should not fuss but simply wait for the future.”
His optimism, however, is not shared by the experts. Member of the State Duma Committee on Financial Markets, Boris Kashin, commenting on the situation with fluctuations on the foreign exchange market, said that the Central Bank cannot cope with the tasks: “Now, in search for the guilty in the critical situation that has transpired, the Central Bank is often pointed at. From my point of view, the policy of the Central Bank is really helpless.”……………………………………….Full Article: Source

Russia Currency Derivatives Aren’t a Threat, Nabiullina Says

Posted on 12 December 2014 by VRS  |  Email |Print

Russia’s financial stability isn’t under threat from currency-derivative operations conducted by companies as the ruble slides, central bank Governor Elvira Nabiullina said. Most of the over-the-counter derivatives have already been terminated and the central bank doesn’t expect more risks to emerge, Nabiullina said.
Companies lost tens of billions of rubles when they were forced to close out contracts after Russia accelerated a plan to adopt a free float last month, Sergey Moiseev, the Bank of Russia’s head of financial stability, said yesterday, according to Interfax………………………………………..Full Article: Source

The digital currency boom: Britain can claim first-mover advantage by acting now

Posted on 12 December 2014 by VRS  |  Email |Print

The UK has always been at the forefront of financial innovation, and we continue to lead the way today. This year, we became the first Western country to issue sukuk sovereign bonds. But we risk being caught on the hop in the emerging digital world.
Within a few years, digital currencies, like Bitcoin, have gone from non-existent to mainstream. The market capitalisation of the 10 that are most widely used hovers around the £4bn mark. If Britain is the first country to embrace these currencies, we could see the huge benefits of a first-mover advantage………………………………………..Full Article: Source

Why currency volatility has staged a remarkable comeback

Posted on 11 December 2014 by VRS  |  Email |Print

Foreign-exchange volatility has returned, and several analysts said it’s here to stay, as the monetary policy of the world’s central banks begins to diverge after years of near-universal dovishness. Volatility in the foreign exchange market—best-characterized by the movement of the dollar-euro and dollar-yen currency pairs — dropped sharply between the summer of 2013 and the summer of 2014. But midway through this year, it began a sudden leap higher, as depicted in the above chart.
“That trend is likely to continue, especially if the Fed actually abandons the zero interest policy and embarks on a tightening cycle in 2015,” said Boris Schlossberg, managing director of FX strategy at BK Asset management………………………………………..Full Article: Source

The 5 Most Important Virtual Currencies Other Than Bitcoin

Posted on 11 December 2014 by VRS  |  Email |Print

Bitcoin introduced a decentralized currency system based on a peer-to-peer network where currency is not issued per se; instead it is mined with advanced computers by cracking difficult math-based equations. Bitcoin can be called the trendsetter, as its success has spurred the launch of many other virtual currencies (there are more than 150 cryptocurrencies).
The currencies inspired by Bitcoin are collectively called altcoins and have tried to present themselves as improvised and modified versions of Bitcoin. These currencies are easier to mine, but involve greater risk in terms of lesser liquidity, acceptance and value retention. Here are five digital currencies picked from the lot………………………………………..Full Article: Source

How Currency Risk Affects You

Posted on 10 December 2014 by VRS  |  Email |Print

If you take the time to leaf through one of those big, densely written fund prospectuses that arrive in your mailbox every now and then, you’ll see a long section called “Risks” that attempts to lay out every possible way the fund could end up disappointing you. A fund that invests in foreign securities might include “currency risk” on that list. Sometimes that idea lands under a broader discussion of “foreign investment risk.”
But what is currency risk? How important is it? What steps do fund managers take to address it, and how should individual investors think about it?……………………………………….Full Article: Source

Strong dollar may have ‘profound impact’ on world economy

Posted on 10 December 2014 by VRS  |  Email |Print

With the dollar marching closer to an eight-year high, the impact of a solid greenback has started to worry traders and economists. The Bank for International Settlements, referred to as the central bankers’ bank, warned in its quarterly review that the strengthening dollar could “have a profound impact on the global economy,” and particularly on emerging markets.
“Should the U.S. dollar — the dominant international currency — continue its ascent, this could expose currency and funding mismatches, by raising debt burdens. The corresponding tightening of financial conditions could only worsen once interest rates in the United States normalize,” Claudio Borio, head of the monetary and economic department at BIS, said in a briefing about the quarterly review, which was published on Sunday………………………………………..Full Article: Source

Why You Should Use Currency Hedging Via ETFs

Posted on 09 December 2014 by VRS  |  Email |Print

When it comes to buying international stocks, investors have a lot of decisions to make. Should you buy a broad exchange-traded fund or just play regionally? Maybe a single country? Developed or emerging markets? And depending on the country, you might even have different themes to choose from.
Well, there’s another option that investors need to decide on when it comes to buying international stocks, and it’s one that most investors don’t even know they have: currency hedging. Believe it or not, buying something as broad as the iShares Core MSCI EAFE (IEFA) — with its 2,500 international stocks — can leave your portfolio to the whims of the cruel forex gods………………………………………..Full Article: Source

Why the Dollar Could Keep Climbing. And Why That’s Worrying

Posted on 09 December 2014 by VRS  |  Email |Print

The dollar’s been galloping higher. And it’s likely to keep going up. Indeed, momentum could even build the more the currency appreciates. At some point, this could become a very substantial global problem.
Since mid-summer the dollar has climbed 12% on a trade-weighted basis, which is to say its exchange rate against other currencies in proportion to how much the U.S. trades with those countries. But that’s only the latest leg of a move that started from the U.S. currency’s lows of the past three decades (at least) in the autumn of 2011–it’s up some 27% from then. It is now the highest it has been since the first half of 2006………………………………………..Full Article: Source

Currency ties key to dollar reserve hegemony: BIS study

Posted on 08 December 2014 by VRS  |  Email |Print

Changes in the size of a loosely defined global “dollar zone” could lead to faster than expected shifts in the composition of world currency reserves, potentially eroding the role of the U.S. unit, said a study published on Sunday.
The study, part of a quarterly review by the Bank for International Settlements, argues the dollar’s domination of reserves stems chiefly from the extent to which many currencies are tied either formally or through trade links like a dependency on oil or other dollar-priced commodities………………………………………..Full Article: Source

Why the dollar is still king

Posted on 08 December 2014 by VRS  |  Email |Print

A question that has frustrated even the most experienced economists in the last few decades is how the dollar has remained the most prominent reserve currency in the world despite the global share of U.S. output eroding away. The Bank for International Settlements (BIS), a Basel-based institution that is known as the central bank of central banks, thinks it has found the answer.
“We argue that the dollar’s role may reflect instead the share of global output produced in countries with relatively stable dollar exchange rates – the ‘dollar zone’,” it said in its new quarterly report released on Sunday………………………………………..Full Article: Source

Dollar’s Rise Causes Pain Abroad

Posted on 05 December 2014 by VRS  |  Email |Print

A surging dollar and falling commodities prices are delivering a windfall to American shoppers and confounding central bankers by widening the gap between the expanding U.S. economy and struggling countries in Europe and Asia.
Currencies across the globe are tumbling against the greenback. On Wednesday, the euro dropped to a two-year low of $1.2311, and the yen fell to a seven-year low. The Australian dollar slid and the Malaysian ringgit fell to its lowest in almost five years, having recently suffered its biggest two-day loss since the Asian financial crisis in 1998………………………………………..Full Article: Source

Currency wars bode ill for the world economy

Posted on 05 December 2014 by VRS  |  Email |Print

Monetary policy has borne the burden of supporting faltering growth via weaker currencies and higher net exports, writes Nouriel Roubini. The recent decision by the Bank of Japan to increase the scope of its quantitative easing is a signal that another round of currency wars may be under way. The BOJ’s effort to weaken the yen is a beggar-thy-neighbor approach that is inducing policy reactions throughout Asia and around the world.
Central banks in China, South Korea, Taiwan, Singapore, and Thailand, fearful of losing competitiveness relative to Japan, are easing their own monetary policies – or will soon ease more. The European Central Bank and the central banks of Switzerland, Sweden, Norway, and a few Central European countries are likely to embrace quantitative easing or use other unconventional policies to prevent their currencies from appreciating………………………………………..Full Article: Source

A Currency War With Japan Won’t Help China Reform Its Economy

Posted on 05 December 2014 by VRS  |  Email |Print

China was well into an intended transformation toward a consumer-driven economy when Japan, fittingly enough, threw a wrench into the works. The latest iteration of the “Abenomics” stimulus measures, on top of news of recurring recession, drove down the value of the Japanese yen against the Chinese yuan (or renminbi) by 15% this year.
Of course, the rest of Asia was affected as well, and the business press noted other countries scrambling to keep their currencies from getting out of whack with the yen. But China has held firm so far, basically remaining stable against the U.S. dollar since June………………………………………..Full Article: Source

Currency Volatility Intensifies as 2014 Ends

Posted on 05 December 2014 by VRS  |  Email |Print

North American and European companies doubled their currency losses in the third quarter and the trend is intensifying, according to an upcoming report from FiREapps. “There is continuous, increased volatility going into yearend,” said Wolfgang Koester, chief executive of FiREapps, a currency risk-management consulting firm.
Companies in the third quarter lost $8 billion, split evenly between U.S. and European firms. That’s more than twice the $3.9 billion in losses reported during the second quarter. To put the currency swing into context, Mr. Koester noted the losses last quarter, on an annualized basis, equate to 640,000 jobs paying $50,000 a year………………………………………..Full Article: Source

How To Destroy A Currency, Russian Style

Posted on 04 December 2014 by VRS  |  Email |Print

When the oil price falls, so do petrocurrencies. That is, unless central banks intervene to stop them – if they can. Historically, petrocurrencies have tended to rise in value, damaging competitiveness in other export sectors. Central banks can always prevent their currencies from rising if they choose: after all, they can print unlimited quantities.
For an emerging market oil exporter to peg its currency to a developed market oil importer’s currency (usually the US$ or the Euro) has been eminently sensible for many years: the peg was easy to defend and the benefits to the economy were considerable………………………………………..Full Article: Source

Russia’s currency is going totally haywire

Posted on 04 December 2014 by VRS  |  Email |Print

If you watch the Russian ruble with any regularity, you are at risk of getting whiplash. Violent daily moves in the currency—both up and down, but mainly down—have become the norm. Jitters over the country’s deteriorating economy, Western sanctions, and the falling oil price have battered the currency—it’s down around 40% so far this year.
The Russian central bank stopped automatically supporting the ruble last month, after burning through billions of dollars in reserves with very little to show for it. The bank said it would intervene to prop up the currency only when its movements threatened financial stability………………………………………..Full Article: Source

Roubini: Currency wars coming, but don’t bet on gold

Posted on 04 December 2014 by VRS  |  Email |Print

At the end of October, the Bank of Japan announced that it would increase its quantitative easing program. In an unexpected move, the bank increased its purchases of Japanese government bonds to grow its monetary base to 80 trillion yen (about $730 billion) per year up from 60-70 trillion yen.
Nouriel Roubini, professor at New York University and chairman of Roubini Global Economics, believes that this was a dangerous move that could trigger a round of currency wars. “Domestic demand is weak in advanced economies, and the only way to grow the economy is to weaken currency in order to boost net exports,” he says………………………………………..Full Article: Source

Dollar gains on commodity-linked currencies

Posted on 03 December 2014 by VRS  |  Email |Print

The dollar rebounded on Tuesday, supported by a retreat in oil prices that has helped to lift it against commodity-linked currencies. In afternoon New York trade, the dollar index reached a 4-1/2 year high, while gaining 1.30 percent against the Norwegian crown and hitting a fresh seven-year high against the yen.
Upbeat comments from two influential U.S. Federal Reserve officials stressing the positive impact on the U.S. economy of the drop in energy prices contributed to the greenback’s strength………………………………………..Full Article: Source

Nigeria’s Tumbling Currency a Victim of Falling Oil Prices

Posted on 03 December 2014 by VRS  |  Email |Print

Nigeria’s currency tumbled to record lows on Tuesday, hammered by falling oil prices that have weighed on Africa’s top economy as it heads toward an election.
Nigeria overestimated oil prices this year by a wide margin—and is now suffering. Economists fear weak oil prices may prevent Africa’s most populous nation from hitting the 7% growth the International Monetary Fund has forecast for this year………………………………………..Full Article: Source

The return of currency wars

Posted on 03 December 2014 by VRS  |  Email |Print

The recent decision by the Bank of Japan to increase the scope of its quantitative easing is a signal that another round of currency wars may be under way. The BOJ’s effort to weaken the yen is a beggar-thy-neighbor approach that is inducing policy reactions throughout Asia and around the world.
Central banks in China, South Korea, Taiwan, Singapore, and Thailand, fearful of losing competitiveness relative to Japan, are easing their own monetary policies – or will soon ease more. The European Central Bank and the central banks of Switzerland, Sweden, Norway, and a few Central European countries are likely to embrace quantitative easing or use other unconventional policies to prevent their currencies from appreciating………………………………………..Full Article: Source

Commodities currencies hit fresh lows

Posted on 02 December 2014 by VRS  |  Email |Print

Sliding crude prices set the tone on currencies markets on Monday, and while the Russian rouble bore the brunt of the selling, it was not alone. The Norwegian krone hit a five-year low on Monday, while the Canadian dollar continued to weaken and the Nigerian naira hit a record low.
The currencies of oil exporting nations remained under pressure across the board after Opec signalled last week it would not reduce output quotas, leaving prices to balance supply after the impact on the market of the shale boom and new exporters, including the US………………………………………..Full Article: Source

Stop Worrying About ‘Currency Wars’

Posted on 02 December 2014 by VRS  |  Email |Print

John Maynard Keynes memorably noted how often people who consider themselves practical are really “the slaves of some defunct economist.” Outdated or misremembered economic history, it turns out, can also hold us in thrall.
Some practical people these days are fretting about “competitive devaluation” or “currency wars.” The concern is that countries are engaged in a zero-sum game of devaluing their currencies to boost their net exports………………………………………..Full Article: Source

How central banks can move currency markets

Posted on 01 December 2014 by VRS  |  Email |Print

In previous articles we addressed some of the different economic factors that can influence the price of currencies, such as interest rates and inflation. As interest rates are controlled by central banks to dictate the flow of investment to the country, consequently the respective leaders of each central bank play a very influential role in the financial markets, particularly the currency trading market.
A central bank’s leader is responsible for conveying to the public the strategy behind economic policy and the actions policy makers are taking to bring prosperity to the nation………………………………………..Full Article: Source

Swiss franc dips after ‘no’ to gold vote, Aussie wilts

Posted on 01 December 2014 by VRS  |  Email |Print

The Swiss franc slipped against the euro early on Monday after the Swiss National Bank affirmed its pledge to cap the currency as voters rejected proposals for the central bank to boost its gold reserves.
The other major currencies were more subdued with the euro a touch firmer against both the dollar and yen at $1.2452 and 148.05 respectively. The greenback held firm at 118.86 yen, just below a seven-year peak of 118.98 set late in November………………………………………..Full Article: Source

I see currency wars

Posted on 01 December 2014 by VRS  |  Email |Print

Nobel Prize-winning economist James Tobin once joked that when it feels like everybody needs to devalue, it’s time for global monetary expansion. Tobin’s quip is germane to concerns over the intensification of ‘currency wars’ in recent weeks. US macroeconomic outperformance is driving up the US dollar and helping push down global commodity prices.
With global commodities typically elastic with respect to the US dollar, the appreciating greenback is working to intensify disinflationary, even deflationary, pressure outside the US, where macrofundamentals are less propitious………………………………………..Full Article: Source

Citi Chief Economist: Bitcoin is Closest Commodity to Gold

Posted on 28 November 2014 by VRS  |  Email |Print

Gold is a commodity like bitcoin and other cryptocurrencies, Citi’s chief economist argues in a research note published yesterday, ahead of a Swiss vote that could cause the global gold price to spike.
Switzerland will hold a popular referendum on Sunday called ‘Save Our Swiss Gold’. If passed, it would mandate the Swiss National Bank to hold a fifth of its assets in gold and to repatriate its holdings from England and Canada. The bank would also be banned from selling its gold in future. Gold prices have dropped as markets await the referendum. If the referendum is passed, gold prices will surge, although this is unlikely, CNBC reported……………………………………Full Article: Source

Nigeria currency devaluation to curb banks’ Eurobond bonanza

Posted on 28 November 2014 by VRS  |  Email |Print

Nigerian banks’ overseas borrowing bonanza looks to be over in the wake of a dramatic currency devaluation this week, but while risks are rising, repaying existing debt should not be a problem for most.
Companies in Africa’s largest economy have rushed in recent years to take advantage of rock-bottom global borrowing costs and investors’ hunger for yield, selling some $5 billion in hard currency bonds since 2007, according to Thomson Reuters data……………………………………Full Article: Source

How foreign currencies affect your investment returns

Posted on 27 November 2014 by VRS  |  Email |Print

There is money to be made from backing the right foreign currencies via the right funds. Here we predict the future winners. The movement of currencies on the foreign exchanges may sound like a matter for professional traders in the City of London, not ordinary investors. But, in fact, anyone with an Isa should appreciate the risks – and opportunities – that can be offered by currency fluctuations.
Over the next couple of years, small fortunes are there to be made not just by picking the right funds or shares but by backing the winning currencies, according to experts…………………………………..Full Article: Source

Nigeria devalues naira and raises rates after oil price slide

Posted on 26 November 2014 by VRS  |  Email |Print

Nigeria has devalued the naira, saying a drop in oil prices had made it hard to defend its currency. The country’s bank central bank also raised interest rates from 12% to 13% in a bid to stem foreign reserve loses. Nigeria has spent billions of dollars defending the naira using “dwindling foreign reserves”, the bank’s governor said.
Falling oil prices also affected the Angolan kwanza, which hit a record low against the dollar on Tuesday. The bank’s governor Godwin Emefiele said: “Falling oil prices have consistently reduced the accretion to external reserves, thus constraining the ability of the bank to continually defend the naira and sustain the stability of the naira exchange rate.”…………………………..Full Article: Source

Could Digital Currency Make Our Money More Secure?

Posted on 26 November 2014 by VRS  |  Email |Print

Some parts of the architecture of digital currency are vastly superior to existing systems. When you pay for something with a credit card, you are giving someone all the information they need to know to buy something online. What an idiotic way to architect a system — that if I pay someone, I tell them everything they need to spend my money.
If I’m paying you, you shouldn’t have to know how to buy something with my credit card. You should have to know how to receive something with my credit card. It was a decades ago stupid mistake to make it work that way……………………………Full Article: Source

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