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Commodities Briefing - Category | Currencies more

Earnings hit ahead if commodities fail to recover

Posted on 10 July 2015 by VRS  |  Email |Print

The widespread rout in ­commodity prices threatens to slash BHP Billiton’s earnings if there is no rebound, according to new research. Investment bank UBS says earnings this year at the ­nation’s biggest company will come in 30 per cent below the bank’s original forecast if commodity prices stay at current levels.
Iron ore suffered its biggest one-day price fall on record overnight Wednesday, plunging a head-spinning 10.1 per cent to $US44.59 a tonne. The key steelmaking ingredient — Australia’s biggest export earner — is at its lowest price since the daily spot price began being tracked in mid-2009………………………………………..Full Article: Source

Bulgarian leva, Turkish lira are gaining currency in Greece

Posted on 10 July 2015 by VRS  |  Email |Print

Many Greek businesses are accepting the Bulgarian leva and Turkish lira as tourism plummets and capital controls limit businesses’ access to euros, the Financial Times reported Thursday. Acceptance of neighbors’ currencies has become common, especially in the retail and tourism industry.
Last-minute bookings have fallen between 30% and 40% compared with the same period last year, according to Greece’s tourism confederation. “There is nothing bad in accepting Bulgarian leva because it is stable and pegged to the euro so why not accept to do business with it? It is legal. There is no reason not to accept,” said supermarket owner Athanasos Kritsinis, according to the FT. ……………………………………….Full Article: Source

Greece currency swap faces rocky road

Posted on 10 July 2015 by VRS  |  Email |Print

As the stand-off between Greece and its international creditors approaches its likely end on Sunday, eurozone officials are openly discussing the possibility that Greece may leave the monetary union and introduce a new currency.
However, even if “Grexit” were to occur, economists warn the transition would not be a clear-cut process. Given the technical challenges involved in setting up a new tender, Greece could face a period where a new parallel currency — under the form of IOUs — circulates alongside the euro………………………………………..Full Article: Source

Look out: Currency hedging is on the loose in ETF world

Posted on 09 July 2015 by VRS  |  Email |Print

That stampeding sound you hear is coming from fund managers scurrying to get into the currency-hedging trade. In recent weeks firms have brought more than a dozen new offerings in that category to the exchange-traded fund universe. ETFs looking to hedge exposure to currency issues across Europe, South America and Asia have blossomed as investor money pours into the strategy.
As is often the case on Wall Street, the natural worry is whether the rush might come too late. Foreign exchange dynamics present earlier this year have abated somewhat, making the need to protect against currency movements less urgent for the moment………………………………………..Full Article: Source

Euro, drachma, bitcoin? Greece’s currency options

Posted on 09 July 2015 by VRS  |  Email |Print

European leaders have given Greece until the weekend to reach an aid-for-reforms deal with its creditors or risk bankruptcy and banking collapse. Here, we outline the currency options available to Greece if it leaves the single currency.
Keep the euro - Greece could unilaterally “adopt” the euro, even if it left the euro zone. This option would see it join countries like Monaco, Andorra, San Marino and Vatican City which all use the euro as their national currency, despite not being euro zone member states………………………………………..Full Article: Source

BRICS to switch to national currency settlement soon - VTB head

Posted on 09 July 2015 by VRS  |  Email |Print

BRICS countries will definitely start using their local currencies for mutual settlements quite soon, the head of Russia’s VTB bank Andrey Kostin told RT Wednesday at the BRICS summit in Ufa.
“We definitely see a growing interest from the countries to make settlements in local currencies,” the CEO of Russia’s second biggest bank said. 40-50 percent of all the mutual settlements among the BRICS countries can be performed in domestic currencies, Kostin estimated, RIA reported………………………………………..Full Article: Source

IOU-currency would put Greece in line to quit euro

Posted on 08 July 2015 by VRS  |  Email |Print

The thinning oxygen supply to Greek banks could leave Athens with little choice but to introduce a form of second currency, European officials believe, a temporary means of freezing its membership of the bloc but one that risks its ultimate exit. The idea of putting Greece’s euro membership on hold - a temporary ‘Grexit’ - was recently raised by Germany’s finance minister Wolfgang Schaeuble.
Greeks say they have no intention of leaving the currency zone, temporarily or otherwise. But a suggestion by Yannis Varoufakis, who quit on Monday as Greece’s finance minister, that Athens might issue IOUs like the state of California did during a budget impasse in 2009, could amount to the same thing………………………………………..Full Article: Source

Citibank Is Working On Its Own Digital Currency, Citicoin

Posted on 08 July 2015 by VRS  |  Email |Print

In a move that should be of no surprise to anyone familiar with the space, Citibank has admitted to running a test platform for digital currencies and is pondering its own solution, CitiCoin.
According to the International Business Times, Citigroup has built its own digital currency based on bitcoin and the blockchain. This, in itself, isn’t very difficult – anyone can create a cryptocurrency in a few seconds with a bit of programming knowledge. But the fact that Citibank, at least in its R&D arm, is looking into the technology is promising………………………………………..Full Article: Source

Fail: Gold can’t even rally on a currency crisis

Posted on 07 July 2015 by VRS  |  Email |Print

Gold, the world’s oldest currency and the most basic store of wealth, used to be where the world turned when times got rough. But after a Greek referendum that put the future of the euro in question and an equity bear market in China, bullion has barely budged.
Gold futures was little changed through midday Monday after jumping immediately after the Greek “no” vote in overnight trading. Gold is now down almost 2 percent for 2015 and virtually unchanged over the last one month amid these financial shocks. In the past, when a country got ready to abandon a currency, gold typically would fill that void………………………………………..Full Article: Source

Markets prepare for new Greek currency as Grexit prospect grows

Posted on 07 July 2015 by VRS  |  Email |Print

For months “Grexit” has been a regular topic for speculation among foreign currency specialists. But the working assumption has been that all parties in Greece’s drawn-out saga would find a way of resolving their differences and keep the country in the eurozone.
That is no longer the case following the resounding “No” vote in the Greek referendum. As the financial markets digested the referendum outcome, foreign exchange strategists began to factor in the increased probability, instead of mere possibility, of Grexit. Barclays described that outcome as a “now high probability”, while JP Morgan said Grexit “appears more likely than not”………………………………………..Full Article: Source

Malaysia currency hits 16-year low amid political crisis

Posted on 07 July 2015 by VRS  |  Email |Print

Malaysia’s ringgit hit a 16-year low on Monday (Jul 6) on growing political uncertainty following allegations that a probe into a state investment fund found hundreds of millions of dollars were transferred into the prime minister’s personal accounts. The currency dropped 0.8 percent to 3.8088 against the greenback in Kuala Lumpur, the lowest level since May 1999.
The currency was fixed at 3.8 to the US dollar in 1998 during the Asian financial crisis after it slumped 35 percent the previous year. The peg was dropped in 2005. Malaysian stocks were also down 1.3 percent, in line with regional markets that have been roiled by the Greek debt negotiation saga………………………………………..Full Article: Source

Greek Economic Crisis: Is A ‘Parallel’ Currency The Answer?

Posted on 06 July 2015 by VRS  |  Email |Print

With Greek banks reported to be preparing contingency plans for a potential ‘bail-in’ of depositors as fears grow that Greece is heading for an economic collapse, some urgent measures now need to be found. Could then a parallel currency provide an answer and be an alternative for Greece?
The latest bail-in development, which apparently calls for a haircut of 30% on bank deposits over €8,000 (c.US$8,880), comes just after the International Monetary Fund (IMF) warned last week that the country required a massive further €60 billion (c.US$66bn) in funds to stabilize the economy over the next three years until the end of 2018………………………………………..Full Article: Source

Egypt’s currency drops to new low against the dollar

Posted on 06 July 2015 by VRS  |  Email |Print

The Egyptian pound has fallen to a new low against the U.S. dollar, the second such drop in days, the country’s central bank said Sunday, in a move that could help boost much-needed foreign investment.
The central bank set a cutoff rate of 7.73 Egyptian pounds per dollar in an auction that sold $39.6 million on Sunday, compared to a previous low of 7.63 on Thursday. Before that, the pound had held at 7.53 since February. The new rate was the lowest level since the Egyptian government introduced an auction system in December 2012 aimed at regulating the pound’s devaluation………………………………………..Full Article: Source

Brazil probes currency market activity of 15 global banks

Posted on 03 July 2015 by VRS  |  Email |Print

Fifteen of the world’s largest banks are under investigation on suspicion of rigging the Brazilian currency, antitrust watchdog Cade said on Thursday, the first such probe in one of the busiest foreign exchange markets globally.
In a document, Cade alleged that the banks colluded to influence benchmark currency rates in Brazil by aligning positions and pushing transactions in a way that deterred competitors from the market between 2007 and 2013, at least. Foreign exchange trading in Brazil is estimated at about $3 trillion a year, excluding swaps and derivative transactions………………………………………..Full Article: Source

Switzerland’s Currency Conundrum

Posted on 03 July 2015 by VRS  |  Email |Print

One topic currently dominates Swiss financial circles: Having abandoned its efforts to prevent the franc from appreciating beyond 1.20 to the euro, what does the Swiss central bank have left in its toolbox to prevent an economy-crushing drift toward parity for its currency?
The big worry in the financial community is that the franc is a one-way bet in the direction that will trash the country’s exports. The Greek drama in the euro zone, combined with the global currency war among countries seeking to devalue their way to greater prosperity, amplifies the Swiss currency’s haven status………………………………………..Full Article: Source

How About a Global Currency?

Posted on 02 July 2015 by VRS  |  Email |Print

It’s almost a truism to say that membership in the euro exacerbated the Greek crisis. The thinking goes like this: Because Greece doesn’t have its own currency, it couldn’t increase its competitiveness and boost growth through devaluation. Although devaluation is a valuable instrument, I think most countries and companies would benefit if the world, not just Europe, used a single currency.
Today’s fragmented financial world is unfair. On the one hand, there’s Denmark with such a glut of currency, local and foreign, that its central bank’s key deposit rate is minus 0.75 percent and companies are considering overpaying their taxes because the Tax Ministry pays 1 percent interest on the excess………………………………………..Full Article: Source

Bitcoin’s price surges as Greeks rush to buy in

Posted on 02 July 2015 by VRS  |  Email |Print

Greeks have rushed to Bitcoin as the country’s financial future hangs in the balance. The digital currency has risen seven per cent since Friday and, at £262, is at its highest level since March. Interestingly, gold – which has long been relied on as a store of wealth during crises – has actually fallen in value. The precious metal is priced 1 per cent lower than on Friday, at $1,168 a troy ounce.
Bitcoin exchanges are reporting increased interest from Greek investors, and with people desperate to store their cash outside the country’s nearly-empty banks, the digital currency may seem like a viable alternative………………………………………..Full Article: Source

Would Grexit spell disaster for Europe’s single currency?

Posted on 02 July 2015 by VRS  |  Email |Print

The prospect of Greece leaving the euro has sent shock waves, not just through Greece, but also the eurozone. Greeks can look to the examples of Argentina and Iceland to see what experience may await them after default and devaluation. But the fate of the eurozone is more complex and uncertain.
With Greece making up less than 2% of the eurozone’s gross domestic product (GDP), its exit might not have much of an immediate impact. Most economists expect the European Central Bank (ECB) would step in to support bond prices against market speculation targeting the weaker euro members………………………………………..Full Article: Source

China targets counterweight in gold trade with yuan fix

Posted on 01 July 2015 by VRS  |  Email |Print

A decade after China kicked off a series of gold market reforms, plans to establish a yuan price fix mark one of Beijing’s biggest step so far to capitalise on the country’s position as the world’s top producer and a leading consumer.
While no immediate threat to the gold pricing dominance of London and New York, the benchmark could ultimately give Asia more power over bullion trade, particularly if the yuan becomes fully convertible, industry sources say. The yuan fix is due to launch by the end of 2015 via the Shanghai Gold Exchange (SGE), which last year allowed foreign players to trade gold using offshore yuan………………………………………..Full Article: Source

With Greek Uncertainty, Investors Seek Safety in Gold and Bitcoin

Posted on 01 July 2015 by VRS  |  Email |Print

As Greece descends into financial crisis, its citizens and investors globally are turning to hedges old and new. European demand for the age-old safe haven of gold coins has risen in recent weeks, as has the relatively new concept of investments in digital bitcoins, market participants say.
As the situation in Europe grows more precarious, the price of both have risen in recent weeks as concerns have grown about the threat to banks in Greece and the risk that turmoil could spread to other countries in the eurozone and elsewhere………………………………………..Full Article: Source

How do you change a currency – fast?

Posted on 01 July 2015 by VRS  |  Email |Print

With Grexit looming for Greece, how would the country bring a new currency into circulation as quickly as possible? The drachma was the world’s oldest existing currency before it was replaced by the euro on January 1, 2001. And it may be about to make a comeback. This Sunday’s referendum is described by European leaders as a vote for or against the euro. If Greece votes “oxi”, the country may soon be looking for a new currency.
Haris Theoharis, a politician in the centrist party To Potami, said: “There’s already a team within the prime minister’s office, with staff from the general accounting office, right now working on the drachma.”……………………………………….Full Article: Source

Greece’s Five Possible Future Currency Arrangements

Posted on 01 July 2015 by VRS  |  Email |Print

Greece is poised between remaining a member of the eurozone or leaving it. In fact, there are five possible future currency arrangements for Greece. Here they are: Greece stays in the eurozone: This is the option likely to cause the smallest short-term disruption to the Greek economy. The Greek central bank would retain access to liquidity from the European Central Bank, and the Greek banks would stay on life support.
This looks increasingly likely to be accompanied by some kind of further negotiated debt relief. To get it, Greece would almost certainly have to agree to more conditions of the sort successive Greek governments have found it hard to accept. Greece keeps the euro, but sits outside the eurozone: Jacob Funk Kierkegaard of the Peterson Institute for International Economics in Washington calls this the “Montenegro option” and argues this is the most likely outcome should Greece exit the eurozone………………………………………..Full Article: Source

Euro currency calm counters Greece fears

Posted on 30 June 2015 by VRS  |  Email |Print

Queues at cash machines, emergency bank holidays, introduction of capital controls and a hastily convened referendum — a cocktail of events that would normally be guaranteed to induce market heatstroke. And yet the way the euro reacted to these seemingly seismic events in Greece on Monday suggested the market was displaying a rare outbreak of cool maturity.
True, the start of the Asian trading session saw the euro drop 1.5 per cent against the dollar and much more against the yen. But when the European markets awoke, the euro was repairing much of those losses and that trend extended into the New York trading day, surprising plenty who had expected a lot more volatility from a market renowned for explosive reactions………………………………………..Full Article: Source

Swiss Sell Francs to Stabilize Currency After Greek Flare-Up

Posted on 30 June 2015 by VRS  |  Email |Print

Swiss National Bank President Thomas Jordan said the central bank intervened to stabilize the franc, which surged after Greek Prime Minister Alexis Tsipras called a referendum on bailout terms. “Yesterday and overnight there was an increased demand for francs,” Jordan told a conference of Swiss executives in Bern on Monday. “The euro was under selling pressure and the SNB intervened in the market.”
Tsipras’s decision to call what is effectively a public vote on Greece’s euro-area membership is also a blow for Switzerland, where the currency’s appreciation is pushing the economy toward a recession………………………………………..Full Article: Source

Currency brokers tighten trading rules on Greek fears

Posted on 29 June 2015 by VRS  |  Email |Print

Online currency trading platforms braced on Sunday for extreme market moves due to events around Greece, imposing higher margins on much trading of the euro and in some cases preventing traders taking up new speculative positions. Retail platforms FXPro, Mayzus, Alpari and U.S.-based FXCM were among those tweaking the terms of trade in a market that in theory trades all day every day but should only see volumes rise when Asian investors and traders return to their desks on Sunday evening.
“Depending on the severity of market conditions come Sunday night/Monday morning, we reserve the right to limit EUR trading to the closing of existing positions only,” FXPro said in a statement on its website on Saturday evening………………………………………..Full Article: Source

If Greece leaves the euro

Posted on 29 June 2015 by VRS  |  Email |Print

What happens once a country leaves the euro? On financial markets a new currency first needs a new currency code that can be identified by computers for trading and payments. They are issued by the Swiss-based International Standards Organisation, a worldwide federation of national standards.
It provides an alphabetic three-character code, with the first two letters representing the country and the third the name of the currency. In Greece’s case it could not go back to its old code for drachma, GRD, because there are still some outstanding payments to be made. It would require a new code, most likely GRN………………………………………..Full Article: Source

Price War Rages in Currency-Hedged ETFs; ProShares Fires Salvo

Posted on 26 June 2015 by VRS  |  Email |Print

A price war is raging in the white-hot market for currency-hedged exchange-traded funds. ProShares, an ETF company best known for fast-moving leveraged products, unveiled its iterations of currency-hedged European and Japanese stock ETFs on Thursday. They appear boast lowest management fees on the market. So far.
The ProShares Hedged FTSE Europe ETF (HGEU) sports an 0.27% in annual expenses, while the ProShares Hedged FTSE Japan ETF (HGJP) cost s 0.23%. ProShares reckons that the asset-weighted average expense ratio for currency-hedged European stock ETFs was 0.56%; it’s 0.48% for currency-hedged Japan ETFs was 0.48%………………………………………..Full Article: Source

India’s RBI extends deadline to exchange pre-2005 currency notes

Posted on 26 June 2015 by VRS  |  Email |Print

Reserve Bank of India on Thursday extended the deadline for exchanging pre-2005 currency notes of various denominations, including of Rs 500 and Rs 1,000, by six months till December 31, 2015. The earlier deadline was expiring on June 30. “The Reserve Bank of India has extended the date for the public to exchange their pre-2005 banknotes till December 31, 2015,” it said in a press release.
RBI had, in December 2014, set the last date for public to exchange these notes as June end. It is easy to identify pre-2005 notes. The currency notes issued before 2005 do not have the year of printing on the reverse side. In notes issued post 2005, the year of printing is visible at the bottom on the reverse………………………………………..Full Article: Source

Israel Shekel World’s Worst Currency After Central Bank Buys

Posted on 26 June 2015 by VRS  |  Email |Print

The shekel depreciated the most among a basket of global peers, after the Bank of Israel intervened to beat back the currency’s best three-day rally since March. Israel’s currency weakened 0.8 percent, more than 30 other major currencies tracked by Bloomberg, to 3.7754 per dollar at 5:30 p.m. in Tel Aviv.
The Bank of Israel bought about $200 million after the shekel appreciated 2.1 percent in the three days through Wednesday. “It’s the Bank of Israel against the market,” Yariv Shalev, a currency dealer at Mercantile Discount Bank in Tel Aviv, said by phone………………………………………..Full Article: Source

Islamic State’s New Currency Is Monkey Nuts

Posted on 25 June 2015 by VRS  |  Email |Print

The so-called Islamic State is to issue its own currency. Crikey! The truth, though, is that the whole story is monkey nuts. The death cult is planning to release an “Islamic Dinar” in gold, apparently worth $140 (£90), with smaller denominations of silver and copper. They’ll be worth only their weight in the metal they are made from.
The “Caliphate” has pretensions to statehood and so running off coins and stamping them with Koranic verses helps shore up that image. The plan for an official currency was announced last November to allow IS to “emancipate itself from the satanic global economic system”………………………………………..Full Article: Source

Isis claims to mint gold and silver coins for currency free from ’satanic’ global economy

Posted on 25 June 2015 by VRS  |  Email |Print

Isis claims it is ready to start issuing its own currency in the form of gold and silver coins for use in its “caliphate”. Supporters of the so-called Islamic State have released pictures of what they said were new gold dinars on social media, amid a propaganda drive by the group as it approaches its one-year anniversary.
Abu Ibrahim Raqqawi, an anti-Isis activist who reports on events in the extremists’ Syrian stronghold for his website Raqqa Is Being Slaughtered Silently, shared photos of one and five dinar coins. “Isis say soon they will deal with the new coins,” he wrote on Twitter………………………………………..Full Article: Source

China Agrees to Limit Currency Interventions, Jacob Lew Says

Posted on 25 June 2015 by VRS  |  Email |Print

China has committed to limiting its currency interventions to moves countering damaging swings in exchange rates, U.S. Treasury Secretary Jacob Lew said Wednesday after high-level talks with top officials visiting from Beijing.
The commitment, agreed upon in the annual round of U.S.-China Strategic and Economic Dialogue negotiations, narrows the conditions under which China says it would be willing to manage the value of the yuan………………………………………..Full Article: Source

Are currency-hedged ETFs the right choice?

Posted on 24 June 2015 by VRS  |  Email |Print

Recent volatility in currency markets has awakened investors to the negative effect currency movements can have on asset returns, but is this a call for wider adoption of currency-hedged strategies or simply short-term noise which should be ignored by long-term investors?
Divergent central bank policies have driven significant currency swings in recent years. Unhedged equity returns have been eroded by moves like the Japanese yen falling 33.6% against the euro between July 2012 and December 2013 and the euro falling 22.1% against the US dollar between March 2014 and March 2015. Consequently, inflows into currency-hedged international equity ETFs have surged in 2015………………………………………..Full Article: Source

Currency Markets Check Plumbing on Potential Greek Spasm

Posted on 24 June 2015 by VRS  |  Email |Print

The operator of a key piece of the foreign-exchange market’s financial plumbing says it’s readying its systems for potential spasms in trading if Greece leaves the euro. “It makes sense to prepare your systems for all eventualities,” said Dino Kos, the head of global regulatory affairs at CLS Group Holdings AG. “We are certainly doing so at CLS.”
CLS settles more than $5 trillion of currency transactions every day. It was established in 2002 to eliminate the risk that a party to a currency trade would fail to deliver an asset after the transaction had been executed. U.S. regulators have designated it a Systemically Important Financial Market Utility whose failure could threaten market stability………………………………………..Full Article: Source

The U.S. Needs to Recognize China’s Currency Aspirations in the Latest IMF Review

Posted on 24 June 2015 by VRS  |  Email |Print

There’s an important opportunity this year to rework the global currency system, and the U.S. must make sure it takes part in the related discussions. Ousmène Mandeng, a senior fellow at the Reinventing Bretton Woods Committee, lays out this opportunity in a recent article in the Financial Times.
Here’s what’s happening. This year the International Monetary Fund this year is reviewing special drawing rights, which are foreign exchange reserves held by the IMF. Their value is based on a basket of four currencies: the dollar, the pound, the euro and the yen. As Mandeng points out, countries can exchange SDRs for usable currencies to supplement their international reserve holdings………………………………………..Full Article: Source

Currency-Hedged ETF Magic: A Less-Known Benefit

Posted on 23 June 2015 by VRS  |  Email |Print

The jury’s out on currency-hedged international ETFs. They won admirers by hauling in outsize profits this past year as stimulus measures drove down the euro and yen vs. the dollar, which hurt nonhedged portfolios. Now it’s the skeptics’ turn.
The greenback’s movements are cyclical, they say, and its rally may already be starting to lose steam. Morningstar analyst Patricia Oey recently analyzed the U.S. dollar’s performance over the past 40 years and its impact on portfolios. She found hedging currency risk provided little real long-term benefit………………………………………..Full Article: Source

Funds pinch their nose and buy euros

Posted on 23 June 2015 by VRS  |  Email |Print

The notion that funds have been buying euros every time the Greek crisis deteriorates sounds daft. But the latest run of data covering funds’ activity does seem to bear it out. This will make any reaction to a Greek deal if (big if) we get one tough to call. As we’ve noted recently, the euro has held remarkably firm even while the Greek crisis has run right to the wire with few signs of progress or even good will, writes Katie Martin.
Bets against the euro have clearly been shrinking. Take a look at the dollar positioning chart below from ANZ. It covers positioning data from the Commodity Futures Trading Commission. This represents a tiny slice of the currencies market as a whole, but it’s a pretty good proxy for funds’ activity………………………………………..Full Article: Source

Time to transform the world’s currency system

Posted on 23 June 2015 by VRS  |  Email |Print

The IMF should expand special drawing rights inclusion beyond the renminbi.T he pending International Monetary Fund review of special drawing rights is much more than a rejigging of a currency basket, or a decision on whether or not the Chinese renminbi will be included. It is about whether the IMF is willing to take serious steps towards the transformation of the international monetary system.
It will matter greatly for the interplay of currencies and for financial markets. The SDR is an international reserve asset and it gives countries the right to exchange SDRs for freely usable currencies to supplement their international reserve holdings. The SDR is denominated as a basket of four currencies, the dollar, euro, pound and yen………………………………………..Full Article: Source

India: Only 10 days left to exchange your pre-2005 currency notes

Posted on 22 June 2015 by VRS  |  Email |Print

Only 10 days are left to exchange pre-2005 currency notes, including those of Rs 500 and Rs 1,000 denominations, at banks as the deadline to do so is ending on June 30. Seeking cooperation for withdrawing pre-2005 currency notes from circulation, the RBI has asked the public to deposit the old design notes in their bank accounts or exchange them at a bank branch convenient to them.
The earlier deadline was January 1, but later the Reserve Bank of India had extended it till the end of this month. All pre-2005 notes continue to remain a legal tender. These notes can be exchanged for their full value at bank branches. It is easy to identify pre-2005 notes. The currency notes issued before 2005 do not have the year of printing on the reverse side. In notes issued post 2005, the year of printing is visible at the bottom on the reverse………………………………………..Full Article: Source

Euro Resilient Amid Greek Crisis

Posted on 19 June 2015 by VRS  |  Email |Print

Greece’s debt negotiations have taken a heavy toll on stocks and bonds in Europe, but the euro is on the rise. Many currency investors expect the euro to slump if Greece fails to reach an agreement with its creditors and leaves the currency area. But they are reluctant to make trades based on the outcome of unpredictable political negotiations.
Instead, fund managers are focusing on the volatility in financial markets caused by the Greek uncertainty, which is prompting them to scale back bets that the euro will fall, in an effort to protect their portfolios from risk. Given the popularity of wagers against the euro—often for reasons unconnected to Greece—this trimming of positions has resulted in a wave of buying that has propped up the currency………………………………………..Full Article: Source

The changing faces of U.S. currency

Posted on 19 June 2015 by VRS  |  Email |Print

The United States Treasury announced plans Wednesday to put a woman on the $10 bill. The change, which will happen in 2020, is notable not just because a woman will be on paper currency but also because the faces of U.S. money have been relatively stable.
“Portraits do not change often,” according to Casey Hernandez, a spokeswoman for the Treasury Department. U.S. currency as we know it today really began in 1913 when the Federal Reserve Act established the Federal Reserve as the nation’s central bank. In 1914, the reserve began issuing new bills called Federal Reserve notes — the same money we use today………………………………………..Full Article: Source

The curse of being a safe haven currency

Posted on 18 June 2015 by VRS  |  Email |Print

It’s tough being a low-yielding safe haven currency. In good times, nobody wants you and you are used for carry trades. In bad times, you’re highly sought after and your value seems completely decoupled from your economy.
Such is the fate of the Swiss franc. The Swiss National Bank must feel like it’s Groundhog Day. Four years ago, as the Greek crisis heated up and everyone feared an imminent break-up of the euro zone, the SNB took radical action by pegging the Swiss franc against the euro. That worked beautifully for more than three years. Until the European Central Bank signaled it was going to embark on a massive round of bond-buying and the peg was no longer tenable………………………………………..Full Article: Source

How to avoid currency conversion catastrophe on holiday

Posted on 18 June 2015 by VRS  |  Email |Print

Not being able to accurately perform currency conversions is costing UK holidaymakers as they overspend when they’re away, new research says. Barclaycard’s Holiday Habits study claims these currency miscalculations mean we are spending an average of £127 extra per person.
More than half of us (52%) try to keep track of our spending by converting foreign currency into pounds, but over a quarter of us get the calculation wrong. And that miscalculation can be costly – for more than a quarter (27%) the muddled maths mean they run out of money while they’re away………………………………………..Full Article: Source

Currency shocks have mom and pop giving hedged ETFs record cash

Posted on 17 June 2015 by VRS  |  Email |Print

On a recent flight, Susanne Alexandor saw an advertisement for currency-hedged exchange-traded funds. The promotion on the seat in front of her highlighted just how aggressively these strategies are being marketed to the masses.
“They are incredibly appealing for the retail space because the retail investor can separate out the market decision from the currency decision,” said Ms. Alexandor, a Toronto-based senior member of the investment team at Cougar Global Investments Ltd., which has about $1.5-billion (U.S.) in assets under management and advisory for clients including high net-worth individuals………………………………………..Full Article: Source

Currency Volatility Took $32 Billion Chunk Out of First Quarter Results

Posted on 17 June 2015 by VRS  |  Email |Print

Currency volatility’s blow to corporate earnings and revenue is at its highest level in years— amounting to a total cost of at least $31.7 billion for North American and European companies in the first quarter, up from $20.2 billion in the fourth quarter.
North American and European companies that told investors they struggled with foreign currency on quarterly conference calls reported a 57% increase in hits to sales and earnings from currency movements, according to a study by FiREApps. A foreign exchange risk management company, FiREApps analyzed 1200 conference calls to arrive at the latest figure, which was the highest in years………………………………………..Full Article: Source

4 Trillion Reasons China’s Currency Isn’t Ready for Prime Time

Posted on 17 June 2015 by VRS  |  Email |Print

A lot of hyperventilation has lately been devoted to the future international role of China’s currency, the renminbi (RMB). The latest flurry of excitement centers on China’s bid to have the RMB included in the basket of currencies represented in the Special Drawing Rights (SDR) issued by the International Monetary Fund (IMF).
According to accepted wisdom, the RMB’s inclusion in the SDR basket would be a landmark step, formal recognition of its coming-of-age as a global reserve currency. SDR status, many say, would give central banks the green light to add RMB to their reserves, and encourage investors to pour money into Chinese stocks and bonds………………………………………..Full Article: Source

Gold market to remain resilient despite stronger US dollar

Posted on 16 June 2015 by VRS  |  Email |Print

The World Gold Council expects the gold market to remain resilient despite the stronger US dollar. Managing Director (Far East) Albert Cheng said the yellow metal tends to do well during periods of high inflation and can be a good investment hedge against inflation risk.
He said this at the Gold Precious Metals Price Outlook Conference and Financial Markets Price Outlook Conference here on Monday. The World Gold Council is the market development organisation for the gold industry………………………………………..Full Article: Source

Cuba likely to end dual currency system

Posted on 16 June 2015 by VRS  |  Email |Print

Cuba is likely to eliminate its dual currency system by the end of this year in a first step to simplifying a multiple exchange system that investors view as a serious obstacle to business. Cuba currently operates two currencies: the peso (CUP), which largely circulates in the domestic economy, and the so-called convertible peso (CUC).
Residents and tourists can purchase CUCs at government exchange offices at a rate of one for 25 CUP ($0.04). State and foreign companies must exchange CUCs at the official one-to-one rate. Neither currency is convertible outside the island………………………………………..Full Article: Source

Zimbabwe phases out local currency at 35 quadrillion to US$1

Posted on 16 June 2015 by VRS  |  Email |Print

Zimbabwe has started retiring its almost worthless local currency in favor of the US dollar. Today, 35 quadrillion Zimbabwean dollars are equal to US $1, as a result of hyperinflation which hit the country in 2009.
The demonetization process of the Zimbabwe dollar started on Monday and will run till September 30. People with accounts of up to 175 quadrillion (175,000,000,000,000,000) Zimbabwean dollars will be paid $5. Those who preserved bills at home will receive a rate of 250 trillion to $1 for their 2008-issued notes and 250 to $1 for their 2009-issued notes………………………………………..Full Article: Source

China Rallies Around Yuan as IMF Mulls Reserve-Currency Inclusion

Posted on 16 June 2015 by VRS  |  Email |Print

China’s central bank is preparing to take new steps to lift the global profile of the yuan as the International Monetary Fund reviews whether to grant it elite status as a reserve currency.
In a report issued late last week, the People’s Bank of China detailed moves it will take to encourage the IMF to take that step, putting the currency on a par with the dollar, euro, yen and pound sterling. Reserve status could potentially encourage other central banks to increase their holdings of the currency………………………………………..Full Article: Source

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