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China agrees to reduce currency intervention ‘as conditions permit’

Posted on 11 July 2014 by VRS  |  Email |Print

U.S. and Chinese leaders have agreed that China will reduce its intervention in the currency market when conditions are ripe, reaching an understanding on a prickly issue that has hurt ties between the world’s two biggest economies for years.
China’s Central Bank Governor Zhou Xiaochuan said on the sidelines of annual high-level talks between the two nations that China will “significantly” reduce its yuan intervention when some prerequisites are met. He did not give further details………………………………………..Full Article: Source

China Signs Currency Deals, Except in the U.S.

Posted on 11 July 2014 by VRS  |  Email |Print

In recent years, China has signed a flurry of currency deals with countries around the world. One notable absence: the U.S. The Chinese government has been pushing for a greater role for the tightly controlled yuan in global trade, investment and finance, as part of its effort to revamp the country’s creaky financial system and to one day challenge the U.S. dollar’s dominance in the international monetary system.
To promote the yuan on the world stage, Beijing has been trying to foster yuan-trading hubs outside the mainland by making it easier for foreign banks to obtain the yuan as well as to clear yuan-denominated transactions………………………………………..Full Article: Source

Democratic Senators Urge U.S. to Press China on Currency

Posted on 10 July 2014 by VRS  |  Email |Print

A pair of Senate Democrats on Wednesday called on U.S. officials meeting for high-level talks in Beijing to “decisively confront” Chinese officials over management of their currency, calling White House efforts to date “insufficient.”
In a letter timed to coincide with the latest round of the U.S.-China Strategic and Economic Dialogue, Sen. Charles Schumer of New York and Sen. Bob Casey of Pennsylvania said U.S. efforts to persuade China to allow market forces to determine the value of its currency aren’t working………………………………………..Full Article: Source

Why 2014’s hottest currency won’t lose its shine

Posted on 10 July 2014 by VRS  |  Email |Print

As the New Zealand dollar trades within striking distance of its post-float high, the trade that’s been on fire since mid-2013 looks unstoppable, analysts told CNBC. The kiwi was trading around $0.8820 early Thursday, just short of its post float all-time high of $0.8842 hit on August 1 2011, boosted by the move by credit rating agency Fitch to reaffirm the country’s AA rating and upgrade its outlook to positive from stable on Tuesday.
“As one of the only two currencies with any appreciable yield in the advanced industrialized universe, the kiwi has been the darling of the yield chasers and the upgrade by Fitch will only serve to reinforce its strength,” said Boris Schlossberg, managing director of BK Asset Management………………………………………..Full Article: Source

FAQ on the Essential Commodities Act

Posted on 09 July 2014 by VRS  |  Email |Print

The Essential Commodities Act (ECA) was enacted by the Central Government in 1955 to control and regulate trade and prices of commodities declared essential under the Act. The Act is again in the limelight, as the Government is making it more stringent while bringing onions and potatoes under its purview. Here are some facts about its provisions that you may want to know and explanations about how the Act works.
The Act empowers the Central and state governments concurrently to control production, supply and distribution of certain commodities in view of rising prices. The measures that can be taken under the provision of the Act include, among others, licensing, distribution and imposing stock limits. The governments also have the power to fix price limits, and selling the particular commodities above the limit will attract penalties……………………………………Full Article: Source

Currency Reserves Swell in Asia

Posted on 09 July 2014 by VRS  |  Email |Print

Asia’s central banks snapped up dollars and other currencies in June at the fastest pace since 2011, bringing total foreign-currency reserves to $7.47 trillion, the latest in a series of records, in an effort to fend off the impact of a wave of cheap global capital.
According to the latest data, holdings in Hong Kong, Singapore, South Korea and Taiwan all hit new highs, while Japan’s reserves rose to $1.28 trillion. Citigroup Inc. economists estimate that China will report a record $3.99 trillion in reserves within the next week……………………………………Full Article: Source

Currency wars: A strong euro is a problem entirely of the eurozone’s own making

Posted on 09 July 2014 by VRS  |  Email |Print

According to Fabrice Brégier, chief executive of Airbus’s passenger jet business, the euro is far too high. Quoted in this morning’s FT, he called on the European Central Bank to take immediate steps to devalue the currency by around 10 per cent against the dollar. His opinion echoes remarks by Sir Mike Rake, president of the CBI, about the pound sterling, which he similarly views as far too high.
It scarcely needs saying that race to the bottom, competitive currency devaluation is ultimately a zero sum game that benefits no one. Unfortunately, that hasn’t stopped several of the world’s major currencies from playing it. The US was first out of the hatches with central bank money printing (quantitative easing) in the immediate aftermath of the Lehman Brothers collapse, followed swiftly by the Bank of England……………………………………Full Article: Source

U.S. to fire early warning shot at China over currency

Posted on 08 July 2014 by VRS  |  Email |Print

The U.S. Treasury is expected to put pressure on China over recent weakness in its currency during high-level meetings in Beijing this week. Before leaving for the Beijing talks, Treasury Secretary Jacob Lew expressed concern over China’s foreign-exchange intervention. Lew said China seemed to follow a path of “two steps forward and part of a step back” on the exchange rate. Although the yuan has appreciated by 14% since 2010, it “still needs to appreciate more, it is undervalued,” Lew said.
Nicholas Borst, an economist with the Peterson Institute for International Economics, said that the U.S. wants to send “an early warning shot” at China in order to put a floor under depreciation. While some of the weakness of the yuan appears to be market driven, some is “policy-driven,” Borst added……………………………………..Full Article: Source

China Faces Yuan on Yuan as U.S. Decries Weak Currency

Posted on 07 July 2014 by VRS  |  Email |Print

Among the half-dozen U.S. Treasury officials traveling to Beijing for talks with their Chinese counterparts this week, Sharon Yuan will, as usual, carry the heaviest suitcase.
Yuan’s stuffed gray Travelpro befits the scope of her two jobs. As head of the department’s trade and investment policy and its chief China coordinator, she often arrives before her colleagues and makes multi-city stops. After the July 9-10 U.S.- China Strategic and Economic Dialogue, she’s off to Brussels for trade talks………………………………………..Full Article: Source

Global body raises concerns about virtual currencies

Posted on 07 July 2014 by VRS  |  Email |Print

The real and potential money laundering and terrorism financing risks of virtual currencies have been highlighted by the Financial Action Task Force (FATF), an inter-governmental body established by the Group of Seven that sets policies and standards on anti-money laundering and combating terrorist financing.
In a report on virtual currencies FATF notes virtual currencies such as Bitcoin are potentially vulnerable to money laundering and terrorist financing for many reasons. FATF last year recognised “significant progress” by New Zealand in addressing previously identified deficiencies following the coming into force of our Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) Act………………………………………..Full Article: Source

Colombia’s currency strikes again

Posted on 04 July 2014 by VRS  |  Email |Print

It all seems to be going so well for Colombia: its national football team has reached the quarter finals of the World Cup for the first time, the economy grew by a startling 6.4 per cent in the first quarter, while unemployment hit a new low last week at 8.8 per cent, and economists say confidence is riding high.
But officials appear to be worrying once again about one of the hazards of economic success: the appreciation of the peso………………………………………..Full Article: Source

China Takes Step Toward Freeing Currency from State Control

Posted on 04 July 2014 by VRS  |  Email |Print

China has permitted banks to freely set their own exchange rates for the renminbi against the dollar in over-the-counter transactions — another step toward freeing the exchange rate from government control.
Banks were previously required to price the exchange rate that they offered clients within 3 percent in either direction of the Chinese central bank’s midpoint on a given day………………………………………..Full Article: Source

South Korea Issues Rare Warning on Currency Surge

Posted on 03 July 2014 by VRS  |  Email |Print

South Korea’s financial authorities issued a rare warning on Wednesday about the surging Korean currency as the won hit a six-year high against the dollar, which threatens to erode the nation’s export competitiveness. The won has risen about 10% in the past year and is the best-performing Asian currency of 2014.
In a joint message, the Bank of Korea and the finance ministry said they were concerned “about the possibility of overly one-sided moves among market participants,” adding that financial authorities were watching for any unusual trading patterns. The joint warning—the first in eight months—put traders on watch for possible won-weakening intervention by the central bank………………………………………..Full Article: Source

Hungary’s Currency Weakens on Government Plan to Convert Loans

Posted on 02 July 2014 by VRS  |  Email |Print

Hungary’s currency weakened sharply on Tuesday in reaction to the government’s latest plan to ease the debt burden for foreign-currency borrowers at the expense of banks, with a European Union warning that the country may return next year under strict budget oversight adding to the forint’s slide.
The Hungarian forint fell about 1% against the euro intraday, with the euro trading above 312 forints by the end of the day after opening around 309 and 310 forints. The forint weakened as implications of the government’s plan to convert foreign-currency loans into forints at below-market rates sunk in, said Peter Attard Montalto, economist at Nomura………………………………………..Full Article: Source

US says China’s currency undervalued

Posted on 02 July 2014 by VRS  |  Email |Print

US Treasury Secretary Jacob Lew says China’s yuan currency remains undervalued, a longstanding sore point that will be raised at next week’s high-level bilateral negotiations in Beijing. Lew said that the yuan, or renminbi, has appreciated 14 per cent since 2010, when China began taking small steps to allow its currency to trade more freely.
‘It still needs to appreciate more. It’s undervalued,’ said Lew, who will lead the US economic team at the US-China Strategic and Economic Dialogue (SED) in Beijing next Monday and Tuesday………………………………………..Full Article: Source

Hong Kong Defends Currency Peg for First Time Since 2012

Posted on 02 July 2014 by VRS  |  Email |Print

Hong Kong’s de facto central bank stepped in for the first time since December 2012 to prevent the city’s currency from rising against the U.S. dollar, as demand rose on commercial activities.
The Hong Kong Monetary Authority said it bought $2.099 billion within the past 24 hours at HK$7.75 a dollar, the upper limit of a convertibility range that triggers intervention. The purchases, disclosed on the authority’s Bloomberg page, were confirmed by phone………………………………………..Full Article: Source

California Lifts Ban on Bitcoin

Posted on 01 July 2014 by VRS  |  Email |Print

Technically, all transactions using digital or alternative currencies had been illegal in California until Monday. California lawmakers approved a bill Monday that lifted an outdated ban on the use of bitcoin and other alternative currencies, as more states seek to clarify and revise virtual currency laws.
AB 129, which Governor Jerry Brown had signed on Saturday, will ensure that “various forms of alternative currency such as digital currency” will be legal in purchasing goods and transmitting payments, according to the bill’s text. The bill reflects the growing use of digital currencies, revising Section 107 of California’s Corporations Code that prohibits use of “anything but the lawful money of the United States.”……………………………………….Full Article: Source

Businesses said to refuse new Kuwaiti currency

Posted on 01 July 2014 by VRS  |  Email |Print

Some businesses have reportedly refused to accept new bank notes circulated in Kuwait from Sunday. Customers have complained that some sales people were unaware that the new plastic notes had been introduced, blaming a lack of awareness and preparation.
Kuwait joined only a handful of countries in the world to use the more durable banknotes, which are made from polymer and last significantly longer than paper currency because they are resistant to heat, water, humidity and dust………………………………………..Full Article: Source

China Expands Trial to Liberalize Foreign-Currency Deposit Rates

Posted on 27 June 2014 by VRS  |  Email |Print

China’s central bank took a small step toward its long-promised liberalization of interest rates by partially removing a cap on foreign-currency deposit rates in Shanghai. The incremental move is part of a longer-term bid to introduce more competition within China’s banking system.
The People’s Bank of China said Thursday it would expand a pilot program to all of Shanghai involving small-account foreign-currency deposit rates that was previously confined to Shanghai’s free-trade zone………………………………………..Full Article: Source

Czechs to Keep Currency Cap for Longer on Low Inflation

Posted on 27 June 2014 by VRS  |  Email |Print

Czech policy makers kept their koruna ceiling in place for a fifth meeting and said they won’t scrap the limit on the currency’s gains before the second quarter of 2015 due to slower inflation (CZCPYOY) at home and abroad.
The central bank kept the benchmark interest rate at 0.05 percent for a 13th meeting, matching the estimates of all 18 analysts in a Bloomberg survey. Policy makers also reaffirmed a commitment not to let the koruna “strengthen too much” beyond 27 per euro, the limit on the currency pair set on Nov. 7………………………………………..Full Article: Source

Brazil Real Leads Global Gains as Support for Currency Extended

Posted on 26 June 2014 by VRS  |  Email |Print

Brazil’s real climbed to a one-month high and led gains among major currencies after the central bank said it will extend daily intervention for at least another six months as part of an effort to curb inflation.
The real rose 0.8 percent to 2.2078 per U.S. dollar at the close of trade in Sao Paulo, the strongest since May 21. The rally was the biggest among the 31 most-traded currencies tracked by Bloomberg………………………………………..Full Article: Source

Is Indonesia Facing a Currency Crisis?

Posted on 26 June 2014 by VRS  |  Email |Print

Indonesia’s rupiah is headed south, fuelled by rising oil prices, and is nearing the 2008 lows once again. The USD/IDR is currently trading a little below the record 12,500 mark touched in 2008, but the currency situation now is not as grave as it was during the 2008 crisis, at least for corporate investors.
At the 2008 trough of 12,503, the rupiah was about 25% weaker from its end-2007 level. And the JSE composite, Indonesia’s benchmark stock index, had fallen nearly 35% during the same period………………………………………..Full Article: Source

De-dollarization continues: China starts direct currency trading with UK

Posted on 25 June 2014 by VRS  |  Email |Print

China is pursuing its quest to strip the US dollar of its global reserve currency status. After establishing the mechanisms for direct ruble-yuan trading and settlement, Beijing is now kicking the dollar out of its transactions with the Great Britain.
Several years ago it was impossible to imagine a world in which direct currency trading between European countries and China would be possible. Even today most cross-currency trading is done via the US dollar……………………………………….Full Article: Source

Brazilian Real’s Volatility Falls to Year Low Amid Intervention

Posted on 25 June 2014 by VRS  |  Email |Print

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

Commodity-Based Currencies Gain After China Data Show Growth

Posted on 24 June 2014 by VRS  |  Email |Print

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

A Gold Alternative? The Swiss Franc

Posted on 24 June 2014 by VRS  |  Email |Print

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

Should the Ruble Be a Global Currency?

Posted on 24 June 2014 by VRS  |  Email |Print

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

Trading the yuan: Yuawn

Posted on 23 June 2014 by VRS  |  Email |Print

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

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

Posted on 23 June 2014 by VRS  |  Email |Print

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

China media: UK currency deal

Posted on 20 June 2014 by VRS  |  Email |Print

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

Swiss National Bank Reaffirms Commitment on Currency Floor

Posted on 20 June 2014 by VRS  |  Email |Print

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

City of London boosted by China currency trading move

Posted on 19 June 2014 by VRS  |  Email |Print

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

Iceland’s currency struggles to regain people’s trust

Posted on 19 June 2014 by VRS  |  Email |Print

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

Alternatives to Currency Manipulation

Posted on 19 June 2014 by VRS  |  Email |Print

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

China’s push to build a global currency

Posted on 18 June 2014 by VRS  |  Email |Print

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

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Ruble Weakens Third Day as Russia Scales Back Currency Support

Posted on 18 June 2014 by VRS  |  Email |Print

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

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

Posted on 17 June 2014 by VRS  |  Email |Print

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

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

Posted on 17 June 2014 by VRS  |  Email |Print

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

Where will Bitcoin go?

Posted on 16 June 2014 by VRS  |  Email |Print

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

Digital currency association formed to boost uptake in Singapore

Posted on 16 June 2014 by VRS  |  Email |Print

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

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

Posted on 13 June 2014 by VRS  |  Email |Print

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

Why China May Continue Depreciating Its Currency?

Posted on 13 June 2014 by VRS  |  Email |Print

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

Currency market rigging could become criminal offence

Posted on 12 June 2014 by VRS  |  Email |Print

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

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

Posted on 12 June 2014 by VRS  |  Email |Print

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

PBOC keeps yuan traders guessing as currency rallies

Posted on 11 June 2014 by VRS  |  Email |Print

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

Zambia’s currency poised to strengthen

Posted on 11 June 2014 by VRS  |  Email |Print

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

World needs currency modernisation

Posted on 10 June 2014 by VRS  |  Email |Print

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

Keep calm and carry on is the message from currencies

Posted on 10 June 2014 by VRS  |  Email |Print

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

Barbados disagrees its currency should be devalued

Posted on 09 June 2014 by VRS  |  Email |Print

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

Currencies: Survival of the weakest

Posted on 06 June 2014 by VRS  |  Email |Print

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

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