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Commodities Briefing - Category | Currencies more

Rajan Sees Rupee as Investment Currency

Posted on 05 November 2015 by VRS  |  Email |Print

India’s central bank Governor Raghuram Rajan hailed prospects for deepening his nation’s debt market and cited diminishing dollar borrowing that would help reduce vulnerability should the U.S. currency climb.
“There are lots of people elsewhere who want to buy rupee bonds because of higher rupee interest rates and greater confidence in Indian inflation prospects, bolstered by our new inflation targeting framework,” Rajan, 52, said in an interview at the Reserve Bank of India headquarters in Mumbai on Tuesday. “I think that the rupee will become more attractive as an investment currency,” he said, adding that the central bank is trying to encourage corporate borrowing abroad in rupees………………………………………..Full Article: Source

El Niño is drying up gains for this major currency

Posted on 05 November 2015 by VRS  |  Email |Print

El Niño is wreaking havoc in the currency market. Since the week began, the New Zealand dollar has shed 3.1% of its value against the dollar—reversing more than half of its monthly gain for October, when it was the best-performing currency among its G-10 peers.
Analysts have attributed its declines to the weather phenomenon, which could drastically reduce crop yields. This is a major problem for an economy that is dependent on agricultural exports—and many believe it will further weaken the kiwi. “It’s definitely a material risk in our view,” said Adam Cole, head of G-10 FX Strategy at RBC Capital Markets………………………………………..Full Article: Source

Bitcoin will be 6th biggest reserve currency by 2030 – study

Posted on 05 November 2015 by VRS  |  Email |Print

Bitcoin will become the world’s sixth largest reserve currency by 2030, according to an investment agency. The rising popularity of the virtual currency will also see banks invest around $1 billion in blockchain technology.
The claims were made by UK-based Magister Advisors, which helps to advise the technology industry on mergers and acquisitions. They came to the conclusions after interviewing a number of Bitcoin companies from around the world and there was a general view it would become a key reserve currency in the space of just 15 years………………………………………..Full Article: Source

Bitcoin to be 6th largest reserve currency by 2030: Research

Posted on 04 November 2015 by VRS  |  Email |Print

Bitcoin industry insiders have issued an optimistic prediction for the cryptocurrency over the next few decades, suggesting it could be as widely used as the Swiss franc or the Australian dollar. U.K.-based Magister Advisors, which advises the technology industry on mergers and acquisitions, interviewed thirty of the leading bitcoin companies from across the globe. It found a consensus view that bitcoin will become the sixth largest global reserve currency within 15 years.
A reserve currency is a currency that is held in large amounts by governments and institutions as part of their foreign exchange reserves, with the U.S. dollar currently being the most popular………………………………………..Full Article: Source

Is bitcoin a better investment than gold?

Posted on 03 November 2015 by VRS  |  Email |Print

An autumn rally has put bitcoin on track to finish the year in the green. Gold, meanwhile, is on track for a loss. The digital currency rose to a fresh 2015 high on Monday, when one bitcoin bought $338.72, according to the Coindesk bitcoin price index. It has gained 5.8% so far this year.
Meanwhile, gold slumped to its lowest price in nearly a month on Monday, closing at $1,135.90 an ounce. Gold futures traded on Nymex have shed about 4.6% of its value this year………………………………………..Full Article: Source

Turkish lira soars after AKP win

Posted on 03 November 2015 by VRS  |  Email |Print

The Turkish lira and stocks soared on Monday after President Recep Tayyip Erdogan’s Justice and Development Party (AKP) was returned to power in a surprise weekend election victory, but analysts warned the rebound may be shortlived.
The lira jumped almost four percent to 2.8 to the dollar in late afternoon trade, after earlier gaining 4.4 percent in the morning to its highest level in seven years. The currency had tumbled more than 25 percent this year on concerns about the faltering economy in the key emerging market and months of political turmoil………………………………………..Full Article: Source

China gives currency largest boost in a decade

Posted on 03 November 2015 by VRS  |  Email |Print

China raised the central rate for its yuan currency by the largest amount in a decade Monday, officials and reports said, just three months after a surprise devaluation sent shockwaves through global markets.
The world’s second largest economy adjusted the yuan’s mid-rate upwards by 0.54 percent against the US dollar, according to an announcement by the central People’s Bank of China (PBOC). Bloomberg News reported that the increase was the largest since 2005, when Beijing unpegged the yuan from the dollar………………………………………..Full Article: Source

Is a world currency war ahead?

Posted on 03 November 2015 by VRS  |  Email |Print

As the world gets bigger it seems to become ever more volatile. So its financial markets ride an endemic eight or nine rollercoaster with dizzying, white-knuckle peaks occurring in 1972, 1981, 1989, 1998, 2007-08 and now maybe in 2015 too. Once more, disappearing money flows are the culprits behind crashing stock markets.
We no longer appear slaves to defunct economists, as John Maynard Keynes prophesised. Instead, we are unattractively chained to a world money cycle. Capital flows, liquidity and swings in currencies matter for investors and risk managers as never before. Businesses cannot operate without cash and summing the amounts that are available to borrow and invest across world financial markets makes up global liquidity………………………………………..Full Article: Source

China, South Korea in Currency Pact

Posted on 02 November 2015 by VRS  |  Email |Print

China’s central bank said it has agreed with South Korean government to set up a direct exchange-trading mechanism between the yuan and the won in its domestic market, as part of efforts to boost bilateral financial cooperation.
The People’s Bank of China said on Saturday that it supports South Korea’s issuing yuan-denominated sovereign debt in China, while Seoul will also facilitate Chinese institutions’ issuing bonds in South Korea………………………………………..Full Article: Source

Defying currency critics, Africa’s biggest economy chokes growth

Posted on 02 November 2015 by VRS  |  Email |Print

Nigeria’s economy is growing at the slowest pace this decade as oil prices drop. Companies are complaining they can’t get the dollars they need to do business. And trading in the naira has long since dried up. There are many good reasons why Godwin Emefiele, who runs the central bank of Africa’s biggest economy, should lift currency controls and let the naira depreciate. One of the things holding him back is politics.
Devaluing the naira may give opposition parties the opportunity to claim that Emefiele’s main supporter, President Muhammadu Buhari, has lost control of the economy. With his backing, the policy chief will be able to resist his critics into 2016 before the worsening economic slump eventually forces him to capitulate, according to Standard Chartered and Bank of America………………………………………..Full Article: Source

Currency-Hedging Creators Develop A New Approach

Posted on 30 October 2015 by VRS  |  Email |Print

One of the most successful ETF issuers in 2015 is adding three exchange traded funds to its offerings. In 2009 WisdomTree was at the forefront of a now ubiquitous movement to nullify the effect currency fluctuations were having on investor returns. Currency-hedged ETFs have multiplied since due to the ability to capture necessary diversification without exposure to volatile currencies.
The approach has developed a strong headwind in emerging markets. ETF Trends chatted with WisdomTree’s Associate Director of Research, Christopher Gannatti, to discuss details, “High interest rates have implemented a 4-5% cost on any currency-hedged ETF that tracks emerging markets. With the volatility these investments have seen this year that cost is seen as too high by WisdomTree so they’ve developed an approach that looks to capture dollar strength rather than offset currency fluctuations.”……………………………………….Full Article: Source

Yuan Slips Back to Fifth Place in Global Payments Rankings

Posted on 30 October 2015 by VRS  |  Email |Print

The yuan slipped back to fifth place in terms of usage for global payments in September, a setback that’s forecast to be short-lived as China encourages greater usage amid a push for reserve-currency status at the International Monetary Fund.
The Chinese currency’s share of transactions declined to 2.45 percent last month from a record 2.79 percent in August, when it overtook the Japanese yen to rank fourth, according to Society for Worldwide Interbank Financial Telecommunications. That’s still up from 1.39 percent in January 2014. Hong Kong accounted for 69.8 percent of global yuan payments in September, ahead of Singapore with 6.7 percent and the U.K.’s 6.2 percent………………………………………..Full Article: Source

Barcelona Officials Plan Alternative Currency

Posted on 29 October 2015 by VRS  |  Email |Print

As humanity increasingly loses faith in debt-backed fiat currencies run by opaque central banks and corrupt governments, the city of Barcelona, Spain, is the latest to announce plans to try something new — a local currency. The goal of the proposed alternative monetary system, according to local officials, is to stimulate business in the city and surrounding areas, especially local small and medium businesses still reeling from the economic crisis that ravaged the nation in recent years.
With over three million people in Barcelona, it could become the largest experiment of its kind, according to analysts. But not everybody is convinced, with some commentators suspecting ulterior motives………………………………………..Full Article: Source

What is the Fair Value of Gold? Ounces Over Dollars

Posted on 28 October 2015 by VRS  |  Email |Print

A huge reason we all tend to make these types of sophomoric mistakes is due to the fact that the bankers erased all real knowledge about sound money from textbooks and the collective conscience of society long before any of us living on this planet today had even been born.
Therefore, we were raised to believe that valuing gold and silver in terms of fake fiat currencies is acceptable, whereas if you transported a 5-year old child that lived during a period of a real gold standard persisted to the present day, that child would laugh at our foolishness regarding the manner in which we value physical gold and silver. During periods of true gold standards (and not anti-gold standards like the Bretton Woods system, that was still truly a US dollar standard), the only accepted way of valuing gold and silver was by its weight, in grams or in troy ounces………………………………………..Full Article: Source

JPMorgan’s Advice to Currency Traders: Keep Calm and Carry On, Briefly

Posted on 28 October 2015 by VRS  |  Email |Print

The prospect of additional accommodation from the People’s Bank of China, the European Central Bank, and the Bank of Japan, as well as fiscal stimulus in the world’s second-largest economy has the potential to breathe life into one of the foreign exchange world’s favorite trades.
But an analyst at JPMorgan Chase is warning currency traders not to get carried away with this more supportive backdrop for risk-taking. “[T]he FX carry trade revival should be brief and narrow,” wrote John Normand, JPMorgan’s head of FX, commodities and international rates research………………………………………..Full Article: Source

Currency wars will continue

Posted on 28 October 2015 by VRS  |  Email |Print

Currency wars are still underway as both the European Central Bank (ECB) and Bank of Japan prepare new rounds of QE which could weaken their currencies, experts say. Last week the euro fell against the dollar – reversing a trend in recent weeks – as ECB president Mario Draghi hinted he may ease monetary policy further.
“While weakness in the euro is not a central mandate for the ECB, its policy makers know the impact that QE stimulus will have on the currency. They are playing the currency wars by stealth,” argues Martin Arnold of ETF Securities. The shifting sands of central bank policy have had an impact on currencies around the world. From the dollar’s steady rise to the downwards path of the euro and yen, there has been no shortage of movements for investors to watch………………………………………..Full Article: Source

Currency Hedge Your ETF Or Not?

Posted on 27 October 2015 by VRS  |  Email |Print

Currency-hedged ETFs are hugely popular with investors, who continue to buy into these funds looking to mitigate currency risk associated with their international stock allocations. Some of these strategies—perhaps most notably the WisdomTree Japan Hedged Equity and the WisdomTree Europe Hedged Equity —performed very well last year, as the dollar rose against the Japanese yen and the euro.
But their returns have stalled relative to unhedged funds this year. So we asked three ETF strategists the following question: Should investors always opt to currency-hedge, to not currency-hedge, or to use both approaches in international stock investing?……………………………………….Full Article: Source

Central Bank Currency Games — For How Much Longer Are Equity Markets Willing to Play?

Posted on 27 October 2015 by VRS  |  Email |Print

Whenever the euro climbs towards 1.15 the ECB, like clockwork, starts making noise about easing more for longer. Following the noise the PBOC brings up China’s funk and eases, no longer willing to give the ECB a free pass on euro depreciation (welcome to 2015!).
Following thes thrust and parry of last week’s events the dollar catches its predictable bid and so too do markets. And now the FOMC enters the fray, timed to its six week schedule, knowing full well how the dollar’s appreciation since June 2014 has effectively tightened financial conditions in the US and slowed growth………………………………………..Full Article: Source

IMF set for green light on China’s yuan joining currency basket

Posted on 26 October 2015 by VRS  |  Email |Print

International Monetary Fund staff are set to give the all-clear for China’s yuan to be included in the lender’s benchmark currency basket, laying the groundwork for a favorable decision by policymakers, people familiar with the discussions said on Sunday. The IMF’s executive board is scheduled to decide in November on putting the yuan on a par with the dollar, yen, euro and pound sterling and a key factor will be its performance against a checklist of technical criteria, as assessed by IMF staff.
Three people briefed on the IMF discussions, who asked not to be named because of the sensitivity of the issue, said a draft report from staff reached a favorable conclusion on including the yuan, also known as the renminbi (RMB)………………………………………..Full Article: Source

Virtual currency groups form alliance

Posted on 26 October 2015 by VRS  |  Email |Print

The Obama administration is joining with private companies in a partnership aimed at training enforcement officials about the virtual currency bitcoin and fighting crime arising from its use.
The goals of the partnership, called the Blockchain Alliance, include educating investigators on the ins and outs of how the technology works and enhancing the reputation of a digital currency that’s been associated with high-profile crime even as it has slowly gained mainstream acceptance and legitimacy………………………………………..Full Article: Source

EU Rules Bitcoin Is a Currency, Not a Commodity—Virtually

Posted on 23 October 2015 by VRS  |  Email |Print

Europeans: Go buy some bitcoins. They’re tax free. Virtual currency bitcoin took another step toward legitimacy Thursday, when Europe’s top court ruled that it must be treated like a currency—not a commodity—for tax purposes. The European Union’s Court of Justice ruled that bitcoin exchanges that transfer conventional currencies such as euros or Swedish krona into bitcoin for a fee are exempt from value-added taxes because of EU rules barring such taxes on transfers of “currency, bank notes and coins used as legal tender.”
The ruling is a significant boost for bitcoin in one of the world’s largest trading areas, removing the threat of taxes that would have raised the cost of buying or using the virtual currency in Europe………………………………………..Full Article: Source

China goes for an international currency with Europe’s help

Posted on 23 October 2015 by VRS  |  Email |Print

Chinese remnibi banknotes. On 21 October 2015, People’s Bank of China (PBC or PBOC), the central bank of China, launched a yuan-denominated bond auction in London, Britain. The move, said to be made for the first time outside of China, intends to internationalize China’s currency facilitating cross-border trade and investment in the offshore market.
The note, worth five billion yuan (about 690 million euro or 786 million US dollar), has an interest rate of 3.15 percent and its falls are due in 2016. The central bank’s announcement was made as Chinese President Xi Jinping is in Britain on a four-day official visit………………………………………..Full Article: Source

IMF presses Nigeria to devalue naira currency

Posted on 22 October 2015 by VRS  |  Email |Print

The IMF is pressing Nigeria to further devalue its naira currency amid uncertainty over the political and economic outlook for Africa’s biggest oil producer and economy. Analysts said there’s disappointment that President Muhammadu Buhari’s long-awaited Cabinet list — five months in the making and still not finalized — includes no economic stars to guide much-needed reform.
“There’s no economist on the (Cabinet) list that can suggest to the government ways to improve revenue generation and how to run the economy,” said Garba Kurfi, managing director of APT Securities and Funds………………………………………..Full Article: Source

What is a currency war and should investors arm themselves?

Posted on 22 October 2015 by VRS  |  Email |Print

The summer months of 2015, and August in particular, were unsettling for investors. The sharp sell-off in equity markets and volatility in bond markets were made all the more unnerving by what appeared to be very mixed messages from different economic regions.
On the one hand, we continue to see strengthening economic data from the US and the UK, and a stable picture of the eurozone’s progress. On the other hand we have the Chinese government and People’s Bank of China (PBoC) making strident changes to monetary policy to support the slowing economy. All while the oil price languishes around its lowest ebb in over six years. The addition of alarming headlines alluding to ‘currency wars’ doesn’t help, but this at least is one story we think investors can remain relatively sanguine about………………………………………..Full Article: Source

Smile! It’s the biggest EM currency rally since ‘98

Posted on 21 October 2015 by VRS  |  Email |Print

It may not feel like the global economy has been significantly happier recently. Indeed, it hasn’t. But emerging markets currencies have been rallying regardless. Analysts at HSBC point out that “EM currencies have seen some of their largest short-term gains since 1998,” writes Katie Martin.
They added: We don’t rule out a further squeeze that could still propel these currencies higher. Certainly, the mood has changed since the US churned out some drab nonfarm payrolls data at the start of this month, dimming expectations that the Fed is preparing for an imminent rise in rates………………………………………..Full Article: Source

Chinese yuan on track to be included in IMF basket

Posted on 21 October 2015 by VRS  |  Email |Print

China’s yuan “ticks all the right boxes” for inclusion in the International Monetary Fund’s SDR list of global reserve currencies, the biggest international bank in China, HSBC, said in a report on Tuesday.
The report by the bank’s chief strategist Paul Mackel comes ahead of discussions within the Fund next month on whether to include the yuan, or renminbi, in the basket behind the Special Drawing Rights, a virtual currency that values IMF reserves and emergency payouts to members. Britain and other members of the Group of 20 leading economies are jostling for position as financial partners for China and have made positive noises about the inclusion of the yuan, which bankers say would be a turning point for trading of the currency………………………………………..Full Article: Source

U.S. Softens Criticism of Yuan Level Amid Currency Pressures

Posted on 20 October 2015 by VRS  |  Email |Print

The U.S. Treasury dropped its view that China’s currency is “significantly undervalued” while saying that the forces driving appreciation in the longer term remain and China needs to allow such strengthening eventually.
The yuan remains “below its appropriate medium-term valuation,” the department said Monday in its semiannual report on foreign-exchange policies. The “core factors” that have driven the appreciation of the yuan in recent years remain in place, such as a large and growing current-account surplus, and net inflows of foreign direct investment, the Treasury said………………………………………..Full Article: Source

Venezuela’s currency is so worthless that even some thieves won’t steal it

Posted on 20 October 2015 by VRS  |  Email |Print

How bad is inflation in Venezuela? So bad, according to a Monday story by the New York Times’s William Neuman and Patricia Torres, that some thieves are declining to steal Venezuelan currency because it’s so worthless.
The Venezuelan economy is a disaster, owing to the country’s byzantine currency pricing system as well as falling oil prices (the oil sector makes up 25 percent of Venezuela’s GDP and is the linchpin of its economy). According to International Monetary Fund projections, GDP is likely to shrink by 10 percent in 2015, the most severe contraction anywhere on the planet; inflation is at 157 percent. Basic goods are nearly impossible to find………………………………………..Full Article: Source

‘God have mercy on currency’: Zambia holds national prayer day to hold Kwacha from record drop

Posted on 19 October 2015 by VRS  |  Email |Print

Sunday saw a nationwide day of prayer in Zambia as president Edgar Lungu called for a divine intervention to save the African country’s currency, Kwacha, from a record drop. All football matches in the country were called off, with bars and restaurants forbidden from accepting clients for most of the day on Sunday.
The president’s call for a national day of prayer and fasting gained a wide support from Zambia’s churches, which conducted prayers all across the country for the mostly Christian population of 15 million people. The authorities turned to God after the country’s economy experienced a host of problems, which caused the national currency, the Kwacha, to plummet against the dollar by a record 45 percent in 2015………………………………………..Full Article: Source

Exeter Pound effect carries currency with global interest

Posted on 19 October 2015 by VRS  |  Email |Print

A new Westcountry currency is proving so successful that it is set to go digital – and is attracting interest around the world. Since it launched on September 1, the Exeter Pound has proved a big hit, with 119 businesses in the Devon city accepting the social currency and more than £E30,000 in circulation.
Now spokesman Ian Martin has revealed plans to take the currency into cyberspace, and that its progress is being monitored globally by other towns and cities which are considering following suit. Martin said: “The currency has been received very well. People want pride in their city and they want to contribute to the local economy – they want to use the Exeter Pound. Some of the notes have been snapped up by overseas collectors.”……………………………………….Full Article: Source

Is This How China’s Currency Will Make Its Mark on the World Stage?

Posted on 16 October 2015 by VRS  |  Email |Print

London will become the first overseas market for renminbi-denominated Chinese sovereign debt. George Osborne will be grinning ear to ear when Chinese President Xi Jinping leaves London on October 23, after a four-day state visit. China has chosen London as the first international financial hub to issue renminbi-denominated Chinese sovereign debt.
According to the Financial Times, Chinese President Xi Jinping, on his trip to London next week, will announce that Chinese Treasury bonds will be issued in London. Osborne, the British chancellor of the exchequer (treasury chief), has sought to turn London into the primary western hub for financial interactions within Chinese markets………………………………………..Full Article: Source

Currency hedging urged before baht

Posted on 16 October 2015 by VRS  |  Email |Print

Standard Chartered Bank urges traders to consider currency hedging again because the market could send the baht back on an upward trajectory by the end of this year and into next year after turning pessimistic on the US dollar’s prospects.
The market had been bullish on the greenback since last year as it expected the US Federal Reserve to start normalising interest rates, making the baht and other regional currencies turn to weakness. However, the Fed has taken no action yet. It has delayed its decision on raising interest rates because the economic data of the US do not look great………………………………………..Full Article: Source

How to hedge out currency volatility with ETFs

Posted on 15 October 2015 by VRS  |  Email |Print

In the past year, acquiring protection against growing currency volatility has become increasingly important. The onset of the Greece debt crisis and the very active role that central banks are playing in monetary policy has driven large currency movements, highlighting the impact of “incidental” currency exposure in portfolios holding foreign assets.
Currency hedged and currency ETPs can serve two primary purposes: allow investors to focus on investment objectives by offsetting the effect of currency fluctuations on foreign investments and provide investors with a means of expressing a view on a currency rate and an underlying asset simultaneously………………………………………..Full Article: Source

Yuan now third most traded currency on EBS platform

Posted on 15 October 2015 by VRS  |  Email |Print

China’s currency is now the third most traded on the EBS platform, overtaking such pairs as the dollar-Swiss franc and euro-yen on one of the main independent venues where banks trade currencies.
Officials at ICAP-owned EBS Brokertec, which competes with Thomson Reuters’ Matching platform in bank-to-bank currency trading, said the number of players trading every day in China’s yuan, or renminbi, had grown 50 percent in the past year. That follows the announcement by the banking payment network SWIFT that the yuan is now the fourth most used currency in ordinary day-to-day payments worldwide………………………………………..Full Article: Source

Yuan-Proof ETFs Fall Short as Cure-All for China Stock Buyers

Posted on 14 October 2015 by VRS  |  Email |Print

The quest to lure cash back to China after August’s shock currency devaluation is running into obstacles before it’s even begun. Deutsche Bank AG’s wealth management unit and Hong Kong-based CSOP Asset Management Ltd. plan to tempt investors back to the world’s second-largest economy — and their products — with the first exchange-traded funds that protect against losses tied to the value of the yuan.
While similar products in developed markets have drawn about $47 billion in the U.S. this year, protection in China is more expensive, restricting demand………………………………………..Full Article: Source

Singapore Set to Ease as Currency Faces Rerun of ‘97 Asia Crisis

Posted on 13 October 2015 by VRS  |  Email |Print

Singapore’s central bank is poised to ease monetary policy for the second time in 2015 in an effort to revive dwindling growth, economists predict. The Monetary Authority of Singapore, which manages the economy through guiding the currency rather than setting interest rates, will boost stimulus when it meets Wednesday, according to 16 of 25 economists surveyed by Bloomberg.
The remainder predict no move. The MAS eased policy at an unscheduled meeting in January, saying it would seek to slow the pace of the local dollar’s gains versus its trading partners. At the first of this year’s two scheduled meetings in April, it refrained from further action………………………………………..Full Article: Source

Turkish lira slides as blasts risk deepening political tension

Posted on 13 October 2015 by VRS  |  Email |Print

Turkey’s lira declined for a second day and bonds fell as bombings in Ankara threatened to ratchet up political tension before elections next month. The currency weakened as much as 1.8 percent, trading 0.4 percent lower at 2.9218 against the dollar at 6:45 p.m. in Istanbul, after blasts killed at least 97 people at a peace rally on Saturday. The yield on two-year notes rose the most in two weeks.
The Ankara attack was the deadliest in Turkey’s recent history and has heightened the nation’s political and ethnic tensions already exacerbated by the civil war in neighboring Syria. The lira has plunged 20 percent this year, the biggest decline after Brazil’s real among 24 emerging-market currencies tracked by Bloomberg, after inconclusive elections in June failed to produce a majority government as security risks escalated at home and abroad………………………………………..Full Article: Source

No one wins currency wars

Posted on 12 October 2015 by VRS  |  Email |Print

China’s decision to tweak its exchange rate peg with the dollar in August provoked reactionary howls of derision, from the United States to India, that Beijing was gearing up for a new wave of international currency warfare. But do currency wars really work?
Before its bi-annual World Economic Outlook in Peru, which wrapped up on Sunday, the International Monetary Fund waded into the debate. It released a definitive set of findings confirming that weaker currencies are still an effective tool for economies to expand their way out of trouble………………………………………..Full Article: Source

Still Paying the Price of Keynesian Currency

Posted on 09 October 2015 by VRS  |  Email |Print

Donald Trump has denounced giving President Obama trade-promotion authority on the grounds that trade deals do not address “currency manipulation,” which he claims is the reason “we get beaten in trade.”
It is true that the international monetary system since 1971—when Richard Nixon ended the dollar’s convertibility to gold—has been corrupted, as in the 1930s, by countries devaluing their currency to boost their exports and economies. But Mr. Trump and all the other presidential candidates must consider the appropriate and effective means necessary to correct the problem………………………………………..Full Article: Source

Best Forecasters of World’s Worst Currency See More Brazil Pain

Posted on 08 October 2015 by VRS  |  Email |Print

Brazil’s real is the worst-performing major currency this year. Ask the top-ranked forecasters and they’ll say it’s set for more losses. The three most accurate currency analysts see the real trading at an average of 4.1 per dollar by year-end, data compiled by Bloomberg show. To get there, the real would have to slide another 6 percent, adding to its 31 percent drop this year.
The real’s collapse amid concern the country’s finances are deteriorating threatens to undermine government efforts to fight inflation that’s running close to 10 percent while gross domestic product heads for its longest decline since the 1930s………………………………………..Full Article: Source

Why Is Kazakhstan’s Currency the World’s Most Volatile?

Posted on 08 October 2015 by VRS  |  Email |Print

Earlier this summer, Kazakhstan lost out on claiming Central Asia’s first Olympics, coming up short against Beijing. Now, though, Kazakhstan can boast a new — and far more dubious — honor. According to Bloomberg, Astana now hosts the world’s “most volatile currency,” with fluctuations in Kazakhstan’s tenge outpacing those of Russia’s ruble and Ukraine’s hryvnia to take the dubious title.
While the ruble’s decline has proven steeper than the tenge’s over the past 12 months – a 41 percent drop against a 33 percent drop, respectively – Kazakhstan’s recent currency swings have whipsawed its citizens’ savings………………………………………..Full Article: Source

Why is Brazil’s currency now so weak?

Posted on 07 October 2015 by VRS  |  Email |Print

Tourists who came to Brazil for last year’s World Cup are probably lamenting the fact that the tournament wasn’t held in 2015 instead. Since the beginning of the year, Brazil’s real has been one of the fastest-falling currencies among major economies.
A tourist arriving in Rio de Janeiro with $6,600 (£4,300) in January would have been able to book a suite for a week in the city’s luxurious Copacabana Palace. Now the same amount of US dollars can stretch to ten nights. Brazil is not alone in its currency woes………………………………………..Full Article: Source

Currency risk: how can expats safeguard their hard-earned money?

Posted on 07 October 2015 by VRS  |  Email |Print

Expats face a number of risks when they move abroad - everything from cultural differences to new laws that need to be learnt and abided by. But one of the biggest dangers to your finances is currency risk, where fluctuations in exchange rates can make you richer or poorer at a stroke if you have to convert a sterling income into the currency of your new home.
The speed with which exchange rates move can be mind boggling, and for the layman it is extremely hard to identify moves - whether political or economic - that will impact on currency values. For those in the eurozone there have been some recent examples which show all too clearly how much impact this single issue can have on your wallet………………………………………..Full Article: Source

Yuan Picks Up Pace as Global Currency

Posted on 06 October 2015 by VRS  |  Email |Print

Devaluation, market volatility sparked a surge in use of China’s currency in the last week of August. The recent rocky ride for China’s markets has helped the country’s currency take another step toward a bigger global presence.
In August, for the first time, the yuan moved ahead of Japan’s yen for fourth place in a league table of the most-used currencies for cross-border payments compiled by Swift, the international payments provider. A “substantial” increase in usage of the currency in the final week of August was triggered by market volatility caused by concerns about the Chinese economy and Beijing’s devaluation of the yuan, Swift said in a report………………………………………..Full Article: Source

China’s currency surges to No.4 spot in global payments in August, overtaking Japanese yen

Posted on 06 October 2015 by VRS  |  Email |Print

China’s currency snatched the world’s No. 4 spot in global payment value in August from Japan, financial infrastructure organisation SWIFT said on Tuesday in its latest gauge of payment flows. The yuan had a 2.79 per cent share of world payment value in August, up from just 0.84 per cent three years earlier, or No. 12 globally.
The yen’s share of the market was 2.76 per cent in August, trailing the yuan for the first time ever. The yuan’s No. 4 ranking was still a distant one, however. The US dollar takes 44.82 per cent of the market, the euro 27.2 per cent and the British pound 8.46 per cent, according to SWIFT data………………………………………..Full Article: Source

China wants freely traded yuan, but no speculation

Posted on 06 October 2015 by VRS  |  Email |Print

In another one of its conflicting policy moves, the Chinese government wants to clamp down on currency speculation, while simultaneously letting the yuan trade freely. Beijing plans to further open up its capital markets and develop its foreign exchange market as it aims to “accelerate the renminbi convertibility on the capital account,” Deputy Central Bank Governor Yi Gang wrote in an article published in China Finance magazine, a central bank publication. Renminbi is another name for the yuan.
While the yuan is already convertible under China’s current account, the broadest measure of trade in goods and services, the capital account, which covers portfolio investment and borrowing, is still subject to restrictions due to worries about abrupt capital flight and hot money inflows, reported Reuters………………………………………..Full Article: Source

South Sudan’s hard currency shortage

Posted on 05 October 2015 by VRS  |  Email |Print

There can be no surer sign of an economy in meltdown than the absence of that most ubiquitous of products, Coca-Cola. Like many other companies operating in South Sudan, the local franchise of the US group has run out of dollars for imports.
The hard currency shortage — so acute that some banks have stopped not only foreign exchange transactions but also payouts on local dollar accounts — reveals more about the consequences of civil war and economic mismanagement in the world’s newest nation than the lack of market potential in the country of 12m people………………………………………..Full Article: Source

To Find Top Currency Forecaster, Skip London and Head to Warsaw

Posted on 05 October 2015 by VRS  |  Email |Print

Konrad Bialas, part of the most accurate currency forecasting team in the past year, bolsters the mathematical and political variables in his economic models with an extra consideration: Murphy’s Law.
From the 80-person headquarters of TMS Brokers in Warsaw’s financial district, Bialas’s four-person research group was the best overall forecaster of major currencies in the 12 months through September, according to Bloomberg rankings of 61 firms. TMS was also among the top four predictors among seven exchange rates, including the Australian dollar and the British pound. ……………………………………….Full Article: Source

Funds Who Speculated Against Danish Currency Told to Drop Hedges

Posted on 02 October 2015 by VRS  |  Email |Print

Denmark’s government is warning its pension funds never to bet against their own currency regime again. “There’s no need to speculate against the krone, not even for the purposes of risk management,” Business Minister Troels Lund Poulsen said Thursday in an e-mailed response to questions. The krone’s peg to the euro “is not up for discussion.”
Denmark’s fixed currency regime was attacked in January, after Switzerland’s decision to send its franc into a free float spurred conjecture the krone might be next. Unlike their Swiss counterparts, Danish policy makers prevailed and hedge funds and other speculators were beaten back………………………………………..Full Article: Source

Why The Modern Currency Wars Are Unproductive

Posted on 02 October 2015 by VRS  |  Email |Print

HSBC believes that the inflationary environment created by currency devaluation in the 1930s is an unrealistic goal for modern economies. In recent years, the devaluation of 60 percent of global currencies has come at the expense of the stronger 40 percent of currencies. The modern world cannot collectively devalue.
In a new report, HSBC Global Research analyst Stephen King discusses why the global currency wars in recent years have been completely unproductive. According to King, expecting the same positive outcome from currency devaluation that occurred in the 1930s in the modern global economy is absurd………………………………………..Full Article: Source

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