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Salmond: New currency argument needed for independence

Posted on 24 March 2016 by VRS  |  Email |Print

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

The currency war is over, says HSBC

Posted on 23 March 2016 by VRS  |  Email |Print

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

Currency war truce

Posted on 23 March 2016 by VRS  |  Email |Print

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

Moody’s Sees Gulf State Currency Pegs Withstanding Oil Rout

Posted on 23 March 2016 by VRS  |  Email |Print

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

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

Posted on 22 March 2016 by VRS  |  Email |Print

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

US dollar, not China, drives commodity falls

Posted on 22 March 2016 by VRS  |  Email |Print

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

IMF Pressing China to Disclose More Data on Currency Operations

Posted on 22 March 2016 by VRS  |  Email |Print

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

Currency wars, the Aussie and ECB strategy

Posted on 21 March 2016 by VRS  |  Email |Print

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

Egypt Said to Consider Tighter Regulations on Currency Bureaus

Posted on 21 March 2016 by VRS  |  Email |Print

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

Global Currencies Soar, Defying Central Bankers

Posted on 18 March 2016 by VRS  |  Email |Print

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

Currency Traders Baffle Norway’s Top Central Banker and Others

Posted on 18 March 2016 by VRS  |  Email |Print

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

Mozambique’s currency devalues again

Posted on 17 March 2016 by VRS  |  Email |Print

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

South African currency’s slide extends on political tension

Posted on 17 March 2016 by VRS  |  Email |Print

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

Commodity and currency slump expose frailties of African economies

Posted on 16 March 2016 by VRS  |  Email |Print

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

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

Posted on 16 March 2016 by VRS  |  Email |Print

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

China ‘weighs tax on currency trades’

Posted on 16 March 2016 by VRS  |  Email |Print

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

Brazil Real Falls as Commodities Drop Offsets Protest Movement

Posted on 15 March 2016 by VRS  |  Email |Print

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

Egypt Devalues Currency as Central Bank Looks to Ease Dollar Shortage

Posted on 15 March 2016 by VRS  |  Email |Print

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

Egyptian pound stable in official auction, firmer on black market

Posted on 14 March 2016 by VRS  |  Email |Print

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

The world’s most beautiful currencies, in pictures

Posted on 14 March 2016 by VRS  |  Email |Print

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

A Bitcoin-Style Currency for Central Banks

Posted on 11 March 2016 by VRS  |  Email |Print

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

Korea Mulls Easing Currency Forward Curbs, Affirms Growth Target

Posted on 11 March 2016 by VRS  |  Email |Print

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

Global currency wars are just beginning

Posted on 10 March 2016 by VRS  |  Email |Print

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

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

Posted on 10 March 2016 by VRS  |  Email |Print

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

Conquering Foreign Currency Concerns

Posted on 09 March 2016 by VRS  |  Email |Print

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

Mixed outlook for currency hedged ETFs

Posted on 08 March 2016 by VRS  |  Email |Print

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

Currency speculators are warming up to the dollar

Posted on 08 March 2016 by VRS  |  Email |Print

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

Commodity gains boost Australian, Canadian dollars

Posted on 08 March 2016 by VRS  |  Email |Print

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

Yuan to stay stable against currency basket

Posted on 07 March 2016 by VRS  |  Email |Print

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

Low oil prices put strains on Gulf currency pegs

Posted on 07 March 2016 by VRS  |  Email |Print

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

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

Posted on 07 March 2016 by VRS  |  Email |Print

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

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

Posted on 04 March 2016 by VRS  |  Email |Print

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

Reserve Bank bets on South Korean currency

Posted on 03 March 2016 by VRS  |  Email |Print

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

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

Posted on 03 March 2016 by VRS  |  Email |Print

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

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

Posted on 02 March 2016 by VRS  |  Email |Print

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

Is currency devaluation overrated?

Posted on 02 March 2016 by VRS  |  Email |Print

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

This country has nine currencies

Posted on 01 March 2016 by VRS  |  Email |Print

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

Emerging-Market Currencies Show Wear and Tear

Posted on 01 March 2016 by VRS  |  Email |Print

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

It’s Getting Harder for Currency Traders to Make Money

Posted on 29 February 2016 by VRS  |  Email |Print

The $5.3-trillion currency market is getting harder for traders to make money in as price changes that once took months or weeks now happen more quickly, says Hugh Killen, Westpac Banking Corp.’s head of trading for foreign exchange, fixed income and commodities.
Liquidity is drying up because investors and banks are shying away from taking risk, and that makes for sharper, quicker currency turns, said Killen, whose career in financial markets spans 27 years and positions in Sydney, London and New York………………………………………..Full Article: Source

Yen, not yuan, emerges as currency worry at G-20 meeting

Posted on 29 February 2016 by VRS  |  Email |Print

China’s currency was expected to be one of the the main topics at this week’s Group of 20 meeting. Instead, Japan’s yen and monetary policy were identified as a source of concern for some officials from the world’s leading economies.
“The debate was also about Japan, to be honest — there was some concern that we would get into a situation of competitive devaluations,” Eurogroup chief Jeroen Dijsselbloem said in Shanghai. Once one country devalues it’s currency, “the risk is very large that another follows and we get into competitive devaluation,” Dijsselbloem told reporters………………………………………..Full Article: Source

Japan considers making bitcoin a legal currency

Posted on 26 February 2016 by VRS  |  Email |Print

Japan’s governing Liberal Democratic party is planning to propose legal changes that would define bitcoin and other cryptocurrencies as currencies. The changes would mean bitcoin could be more tightly regulated and taxed, and are likely to lead to more investment in developing cryptocurrency infrastructure in Japan.
Tomonori Kanda, an official in the financial affairs section at the party’s headquarters, said legislative changes were discussed on Wednesday and the LDP aimed to raise the matter in parliament………………………………………..Full Article: Source

Gold moves revive memories of 1990s currency crisis

Posted on 26 February 2016 by VRS  |  Email |Print

Gold has performed better than most other major asset classes this year, rallying around 16 percent since the start of the year as investors rushed into traditional the safe haven asset.
With the price of the precious metal moving higher this week as sterling has plummeted, analysts are comparing gold’s moves to the European currency crisis in 1990s. Back then, the U.K. was forced to abandon a European currency peg in late 1992, famously helping investor George Soros make $1 billion by betting against the pound and the Bank of England………………………………………..Full Article: Source

How long before the cracks show in China’s great currency wall?

Posted on 25 February 2016 by VRS  |  Email |Print

China still owns the world’s largest currency reserves, but it has been burning through them at such a pace that some think Beijing might soon have to allow a sharp fall in the yuan or back-pedal on liberalisation and tighten its capital controls.
Foreign exchange reserves in China declined $99.5 billion in January to $3.23 trillion, following a record fall the previous month, and have shrunk by $762 billion since mid-2014, more than the gross domestic product of Switzerland………………………………………..Full Article: Source

Nigeria urged by IMF to devalue currency

Posted on 25 February 2016 by VRS  |  Email |Print

Nigeria’s central bank should allow the local currency to devalue as part of a package of aggressive economic policies to reverse the impact of low oil prices on Africa’s biggest economy, the International Monetary Fund said Wednesday.
The IMF said Nigeria’s economy would grow by 4.9% in 2017 from 3.2% this year as long as the government takes immediate action to cut spending and better manage the naira, its national currency. Traders have turned against the naira as global oil prices have plummeted, betting that Africa’s top crude producer would struggle to replace the revenue it uses to fund 80% of its budget………………………………………..Full Article: Source

ETF flows prompt bounceback for gold

Posted on 24 February 2016 by VRS  |  Email |Print

Gold rebounded as money flowed back into exchange traded funds but analysts cautioned that the gains might be limited without physical demand from India and China. The precious metal has been one of the best-performing commodities this year, rising 15 per cent thanks to flows into gold-backed exchange traded funds.
Investors have bought more tonnes of gold through ETFs this year than they sold during the whole of last year, amid a search for haven assets amid sinking stock markets and negative central bank interest rates. Holdings in gold-backed ETFs have risen 49.8 tonnes over the past two days, the biggest two-day increase since May 2010 during the eurozone debt crisis, according to data compiled by Bloomberg………………………………………..Full Article: Source

These Commodity Currency ETFs Outpacing Dollar to Start 2016

Posted on 24 February 2016 by VRS  |  Email |Print

The global market upheaval triggered off by China hit the most risky asset classes at the start of 2016, instigating a flight to safety. Also, the uncertainty in the oil patch and growth worries in Japan and Euro zone made matters worse. Back home, the economic health suffered as several recent readings came in soft.
The US economy cooled off in Q4 with the annualized growth pace of 0.7% missing the market estimate of 0.8% and falling sharply from the prior quarter’s expansion of 2%. A stronger greenback, sluggish manufacturing activity and weak consumer spending weighed on U.S. economic growth. This held the Fed back from showing too much aggression on the policy tightening issue………………………………………..Full Article: Source

Japan Considers Regulating Bitcoin as Currency

Posted on 24 February 2016 by VRS  |  Email |Print

Regulators in Japan have reportedly proposed treating digital currencies like bitcoin as methods of payment, a distinction that would make them legally equivalent to conventional currencies in the country.
According to a report by Nikkei, Japan’s Financial Services Agency (FSA) is considering whether to make revisions to legislation that would classify digital currencies as “fulfilling the functions of currency”. “They are now recognized as objects but are not treated on a par with their more established counterparts,” the report states……………………………………….Full Article: Source

Barclays Says Sharp Yuan Devaluation Needed to Shift Psychology

Posted on 24 February 2016 by VRS  |  Email |Print

A sharp, one-off devaluation of the yuan is among options China’s central bank might consider to stem capital outflows and shift market psychology to appreciation from depreciation, according to Barclays Plc.
The risk of such a move, which Barclays says would need to be in the region of 25 percent to alter perceptions, is rising as China’s foreign-exchange reserves plunge, analysts Ajay Rajadhyaksha and Jian Chang wrote in a report………………………………………..Full Article: Source

G-20 Likely to Reiterate Currency Commitments

Posted on 23 February 2016 by VRS  |  Email |Print

Global financial leaders likely will reiterate previous currency policy commitments, a senior U.S. Treasury official signaled Monday, despite concerns that lackluster growth around the world may tempt some countries to use devalued currencies to juice exports.
A senior U.S. official, speaking ahead of a gathering of finance ministers and central bankers from the Group of 20 largest economies in Shanghai later this week, said exchange-rate commitments in previous G-20 communiqués have been “constructive and helpful, and I think nicely articulate the rules of the game.”……………………………………….Full Article: Source

Getting Rid of Big Currency Notes Could Help Fight Crime

Posted on 23 February 2016 by VRS  |  Email |Print

Few Europeans use the 500-euro note, and most Americans rarely encounter the $100 bill. Yet hundreds of millions of these notes are in circulation around the world, where they are often used by drug cartels, corrupt politicians, terrorists and tax cheats to evade law enforcement.
That’s why officials in Europe and elsewhere are proposing to end the printing of high-denomination bills. Getting rid of big bills will make it harder for criminals to do business and make it easier for law enforcement to detect illicit activity………………………………………..Full Article: Source

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