JPMorgan predicts Gold At $1,800 by mid 2013 As South Africa “In Crisis” And “Escalating Instability” In Middle East. J.P. Morgan Chase & Co. stated gold would rise to $1,800 an ounce by the middle of 2013, with the mining industry in South Africa “in crisis,” based on reports. South Africa, once the largest gold producer confronts industrial unrest, high wage inflation and also adverse regulatory changes for local mines, Allan Cooke, an analyst in the bank, stated in a report dated recently.
Gold will get an increase in price from prospects of more stimulus from the U.S., Japan and Europe, the potential for escalating uncertainty in the Middle East as well as low interest rates, based on the report. (Press Release)

The US dollar rose against its leading counterparts as risk-related currencies pulled back from recent highs while the UK pound was a notable underperformer.
Sterling hit its weakest level in more than five months against the dollar amid negative sentiment on the UK economy after figures released on Friday showed a sharper-than-expected contraction in growth in the fourth quarter of last year………………………………………..Full Article: Source

The exchange-traded fund (ETF) industry has grown into a trillion dollar business since the first ETF was launched 20 years ago. Today’s traders and investors have access to a growing number of ETFs, offering exposure to a wide variety of popular and niche markets.
One of these is the currency ETF market, providing exposure to both individual as well as baskets of currencies. Here we will take a look at some of the more popular currency ETFs on the market today……………………………………….Full Article: Source

The Canadian dollar ended higher Tuesday, carried aloft by a general rebound in commodity currencies. The U.S. dollar was at C$1.0024 late Tuesday from C$1.0061 late Monday, according to data provider CQG.
The U.S. dollar had push persistently higher against the loonie in recent sessions after the Bank of Canada said last Wednesday that the prospect of monetary tightening had become less imminent, but stalled around the C$1.0100 mark………………………………………..Full Article: Source

By now you must already know the deal with the sagging Japanese yen. Japan has a new Prime Minister who has embarked on a promise of aggressive fiscal and monetary easing in order to beat deflation. The yen has been plummeting since November. That’s one currency that everyone’s bearish on.
The other story, and this is just getting started in the last few weeks is the British pound. Last week, the country came out with a negative GDP print, and people are talking about a “triple-dip” recession………………………………………..Full Article: Source

George Soros, one of the most outspoken critics of Germany’s proposed austerity policies to solve the European debt crisis, said the euro is here to stay and will gain as other nations seek to devalue their currencies.
Soros, who made $1 billion shorting the British pound in 1992, said that while the causes of the euro crisis haven’t been solved, the acute phase of the turmoil is over………………………………………..Full Article: Source

In many ways, things are better than in 2012. Though unemployment remains high in some countries and the global recovery looks fragile, some big political uncertainties (like the U.S. election) are off the table, and the dysfunctional U.S. Congress has stepped back twice from the fiscal brink.
But most important, the euro zone doesn’t look like it’s going to implode. In fact, the Economist reported, “the invalids in Europe’s medical ward are making a remarkable recovery.”……………………………………….Full Article: Source

The best currencies to invest in for 2013 come from Asia, South America, Australia - but not the United States. The Federal Reserve’s misguided insistence on a loose monetary policy, ongoing resistance to government spending cuts, and another increase in the U.S. debt ceiling will all conspire to boost inflationary pressures and restrain the value of the U.S. dollar.
That will, of course, impact domestic market performance and cut into real returns on dollar-denominated investments - but it will also provide major opportunities for U.S. investors who can target issues denominated in the strongest foreign currencies………………………………………..Full Article: Source

The South African rand tumbled to a four-year low versus the U.S. dollar Wednesday, as negative sentiment over the country’s economic prospects triggered a selloff ahead of an interest-rate announcement.
On Wednesday, speculative investors prepared for the South African Reserve Bank’s policy announcement Thursday by testing–and breaking–the dollar’s market-implied ceiling against the rand at around ZAR9.0. The central bank is expected to cut key rates by 0.25 percentage point to boost the country’s flagging economy………………………………………..Full Article: Source

The Australian dollar is at risk of losing its status as the top pick amongst the so called commodity currencies. More on this below, but first a look at the most recent rates:
The pound vs Australian dollar exchange rate is unchanged on Friday’s closing rate at 1.5093. The euro vs Aussie is 0.14 pct down at 1.2655. Against the US dollar the Australian currency is 0.14 pct higher at 1.0525………………………………………..Full Article: Source

The carry trade is alive and well, at least in emerging-market currencies. As safe-haven currencies in the developed world such as the Swiss franc and the Japanese yen begin to depreciate, investors are using them to fund positions in higher-yielding currencies such as the Russian ruble and Mexican peso.
The strategy didn’t work particularly well in emerging-market currencies last year. But the lag in their appreciation compared with the gains posted by advanced-economy currencies–such as the euro and the Australian dollar, which benefited as fears of a European sovereign crisis faded–could in itself be a reason for these currencies to rally this year………………………………………..Full Article: Source

Experts expect the price of the Egyptian pound to continue to depreciate against foreign currencies throughout 2013, a result of a rise in the US dollar on the Egyptian market towards the end of 2012.
Throughout 2012 Egypt’s currency dropped 8.4% against the euro, which cost EGP 8.4 by the end of the year. Egypt’s currency dropped a total of 11% against the sterling in 2012………………………………………..Full Article: Source

Singapore’s dollar will underperform most regional counterparts this year as a pickup in the global economy and faster growth among its peers reduces demand for the republic’s top-rated securities, according to HSBC Global Asset Management and Mizuho Asset Management Co.
Interest in the slowest-growing nation of Southeast Asia’s five-biggest economies will diminish in 2013 as returns waver, Gordon Rodrigues, investment director at HSBC Global Asset in Hong Kong, said in a Jan. 14 interview. Prime Minister Lee Hsien Loong said on Dec. 31 that the $240 billion economy will expand 1 percent to 3 percent this year, less than the past decade’s 6 percent average………………………………………..Full Article: Source

As nations see Japan’s success in weakening the yen, some begin to take notice. Emerging markets nations often attempted to devalue their currencies in the past in order to improve competitiveness.
But these days developed economies are doing it as well. This morning the Russians called these policies “currency wars”, which is a good way to describe the latest developments. And such policies are not limited to Japan………………………………………..Full Article: Source

The global risk appetite weakened over the US and Asian sessions, as the World Bank revised to the downside the Japanese and US growth, and predicted a second year of contraction in the Euro-Zone.
While 2013 was seen as a recovery year for the world’s leading economies so far, the anticipations lost pace as the structural, economical and political concerns remain far from being resolved, particularly in US and the Euro-Zone. In Japan, the Yen weakness raised concerns regarding a potential debt default, while the Fed President Plosser warned over the broadening of ‘currency wars’………………………………………..Full Article: Source

Faced with a stubbornly slow and uneven global economic recovery, more countries are likely to resort to cutting the value of their currencies in order to gain a competitive edge.
Japan has set the stage for a potential global currency war, announcing plans to create money and buy bonds as the government of Prime Minister Shinzo Abe looks to stimulate the moribund growth pace………………………………………..Full Article: Source

The World Bank’s top economist said a global series of tit-for-tat currency devaluations is possible but unlikely this year, despite the organization’s forecasts of upward pressure on exchange rates of major commodity exporters.
Kaushik Basu, the World Bank chief economist, said fear of retaliation is likely to prevent a series of competitive devaluations known as a currency war. Expensive yen, Brazilian reais and Australian dollars make those countries’ products more expensive in world markets, curbing exports………………………………………..Full Article: Source

For the first time in three years, Asia will lead a rally in emerging-market currencies as rising global trade lifts the region’s exports, according to the most- accurate foreign-exchange forecasters.
India’s rupee will climb 5 percent in 2013 after losing 17 percent over the past two years, according to Oversea-Chinese Banking Corp Ltd, the best forecaster based on data compiled by Bloomberg News. The Philippine peso will gain 4.3 percent to its highest since 1999, said Standard Chartered Plc and Wells Fargo & Co, which tied for second. That would put them among the top-three developing-nation currencies, Bloomberg News data show………………………………………..Full Article: Source

Iran has decided to replace dollar and Euro with other currencies in its trade with foreign partners, Economic and Finance Minister Seyed Shamseddin Hosseini said.
According to him, the government is intended to change the model of the country’s foreign trade relations. In foreign trade transactions, Iran is intended to use the local currencies of Iran’s trade partners………………………………………..Full Article: Source

The New Zealand and Australian dollars gained versus their U.S. counterpart as commodities rose the most in more than a week. New Zealand’s currency, nicknamed the kiwi, advanced versus all 16 of its most-traded peers after the nation’s statistics agency said the value of retail transactions on electronic cards increased 0.3 percent in December, the third-straight monthly advance.
The Aussie dollar reached the highest level in more than four years against the yen………………………………………..Full Article: Source

Emerging-market currencies look set to be 2013’s best performers, according to J.P. Morgan Private Bank. Sara Yates, the bank’s global currency strategist, has forecast that investors’ rising risk appetite will drive them towards such foreign-exchange markets, which she also said she expected to be supported by economic fundamentals.
‘2013 promises to be a year of loose monetary policy and less systemic risk,’ argued Yates. ‘As market confidence grows, we expect investors to feel more comfortable in taking on a larger amount of risk in their search for yield. In other words, we look for risk-on currencies to outperform.’……………………………………….Full Article: Source

For almost two decades, Japan — the world’s second largest economy (now third)– has been floundering in the swamp of stag-deflation. Following the assumption of leadership by Prime Minister Shinzo Abe this has changed, however.
Keeping up with his election campaign promises, Mr. Abe launched a $117 billion fiscal stimulus to stimulate the country’s ailing economy. At the same time, he has directed direct Bank of Japan, which lost its (short-lived) independence, to print an unlimited amount of money—creating a yen tsunami that will push the country from deflation to inflation!……………………………………….Full Article: Source

Commodities rallied their most on Thursday since the start of the year as signs that European interest rates might hold pushed the dollar sharply lower against the euro, boosting raw materials priced in the U.S.currency.
Supply and demand factors also influenced a run-up in crude oil and natural gas prices. London’s Brent crude neared three-month high and U.S. crude hit a four-month peak before paring gains at the close on news that No. 1 oil producer Saudi Arabia had cut output. Supportive economic data from China further fanned expectations for oil demand………………………………………..Full Article: Source

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In the past few years, central banks around the world have pumped trillions of dollars into the financial system, partly motivated by the desire to keep their currencies weak in relation to others.
Yet a weaker currency is not the booster conventional economic wisdom suggests, according to Steven Englander, head of currency strategy at Citi. The traditional view that a weaker currency boosts exports and therefore stimulates the economy is over-simplified, he argued………………………………………..Full Article: Source

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As the European debt crisis shows no signs of ending experts are divided on whether the Eurozone is doomed or the project is viable, even if some of its member drop out of the euro. “The eurozone is headed for deeper, more intense, and much less retractable trouble in 2013. There is no foreseeable way for the region to recover as it exists today in its current form,” economic expert Margaret Bogenrief from ACM Partners said.
With Greece’s exit from the Eurozone looming and a lack of agreement between EU leaders on crisis fighting measures, the region’s economy was on the verge of collapse several times last year………………………………………..Full Article: Source

Sidetracked by the discussion over the “fiscal cliff” and possibly a New Year’s hangover, it’s time to face 2013 in earnest. Is the yen doomed? Will the euro shine? What about Asian and emerging market currencies? Will gold continue its ascent? And the greenback, will it be in the red?
“Central banks hope for the best, but plan for the worst” was our theme a year ago. With everyone afraid of the fallout from the Eurozone, printing presses in major markets were working overtime………………………………………..Full Article: Source

The Brazilian real led declines among emerging-market currencies Tuesday on concerns that higher future energy prices could stifle economic growth in Latin America’s biggest economy.
Driving the worries, the Folha de Sao Paulo newspaper reported that Brazil’s government might have to ration energy as it is concerned that low water levels in reservoirs could put a strain on energy capacity………………………………………..Full Article: Source

The euro turned lower against the dollar on Tuesday, giving up modest gains after Japan’s finance minister said Tokyo would use part of its foreign-exchange reserves to buy bonds issued by the European Stability Mechanism, the euro zone’s bailout fund.
The ICE dollar index, which measures the greenback against a basket of six major currencies, rose to 80.323 compared with 80.256 in U.S. trading late Monday………………………………………..Full Article: Source

The yen and dollar face a tough 2013 as the Japanese and US central banks print money furiously to stimulate their economies, making the euro and sterling unlikely relative winners despite Europe’s gloomy prospects.
With a global economic recovery looking shaky, analysts say the major central banks will be happy to see their currencies weaken this year if it helps their exporters to become more internationally competitive……………………………………….Full Article: Source

In a move that could see a gradual shift of the onshore currency market to offshore, two leading global exchanges — Intercontinental Exchange (ICE) and CME Group — will launch foreign exchange futures contracts on the Indian rupee on January 22 and 28, respectively.
Already, an over-the-counter (OTC) USD-INR non-deliverable forward (NDF) offshore market for trading in currencies that have no full convertibility, such as the Indian rupee, is in existence, but experts reckon that the launch of standard rupee futures contracts on the two American exchanges will lure foreign investors, who are now prohibited from participating in the Indian OTC and exchange-traded markets………………………………………..Full Article: Source

The currencies of eastern Europe have emerged as the best performers of 2012 in the forex market, shrugging off both weaker growth in the eurozone and domestic funding issues as investors flocked to higher interest rates in Hungary and Poland.
The Hungarian forint and the Polish zloty have both risen 11 per cent against the US dollar in the past 12 months, making them the strongest performing of the world’s major currencies this year………………………………………..Full Article: Source

Commodity currencies enjoyed gains against the dollar and yen on Wednesday as hopes rose that a solution to the US budget and tax crisis had been found.
The dollar and yen traded lower against most other currencies as risk appetite was boosted by the deal in US Congress to avert the fiscal cliff………………………………………..Full Article: Source

In an affirmation of what market participants believed would be the defining trend of the year, the first trading day of 2013 opened with the theme of divergence within emerging market currencies.
The Russian ruble and the Mexican peso were gainers on the session after Congress signed a deal to avert a slew of spending cuts and tax increases known as the fiscal cliff. But the gains weren’t felt across the board, with the South African rand among the decliners………………………………………..Full Article: Source

The US dollar ended mixed against major currencies on the last trading day of 2012 after President Barack Obama said an agreement to avert the “fiscal cliff” was “within sight” but “not done” yet.
In late New York trading on Monday, the euro was traded around $1.3190 and the dollar bought about 86.7 Japanese yen. For the whole year of 2012, the euro has gained 1.8 percent against the dollar this year, despite lingering worries over eurozone debt crisis and mainly boosted by a series of good news from Europe recently………………………………………..Full Article: Source

The simmering currency war among the world’s major economic powers is set to heat up significantly over the coming year following the decision by the US Federal Reserve earlier this month to step up its so-called “quantitative easing” program.
Under the new initiative the Fed will expand its holdings of financial assets from their present level of $2.9 trillion to some $4 trillion by the end of 2014 through continuing purchases of mortgage-backed securities and Treasury bonds………………………………………..Full Article: Source

The lack of participation in the FX market today has meant an increase in volatility for many of the major currencies. The EUR/USD for example soared at the start of the U.S. session as equities opened higher only to give up those gains when stocks turned negative.
U.S. markets were open for trading, but with Europe closed for Boxing Day and most U.S. investors out for the entire week, there was very little reason for the excitement during the North American hours………………………………………..Full Article: Source

Emerging-market currencies could go from this year’s laggards to next year’s outperformers, investors and analysts say. Most currencies from the developing world rose slightly against the dollar in 2012, but couldn’t compete with returns from emerging-market dollar-denominated debt.
The MSCI EM Currency (USD) index is up about 5% year-to-date, while emerging-market sovereign dollar-denominated debt has soared to see total returns of 18%, according to a Barclays index………………………………………..Full Article: Source

It’s forecast season again, and the currency strategists are hunched over their crystal balls and chart, busily producing their best calls for 2013.
At Wells Fargo, one group of currencies in favor for the new year is what they call the ‘nifty NAFTA.’ The strategists, led by Nick Bennenbroek, say the Canadian dollar and Mexican peso are poised to outperform other risk-sensitive currencies like the Australian and New Zealand dollars………………………………………..Full Article: Source

Japan’s newly elected president, Shinzo Abe, has signaled his intention to do whatever he can to devalue the Japanese yen in order to provide a boost to the nation’s ailing economy. This virtually assures a lower yen and this article looks at how traders and investors can profit from it.
Last weekend Japan’s Liberal Democratic Party (LDP) led by Shinzo Abe won a clear majority in the country’s general election. Shinzo Abe has said that his top priority is the Japanese economy which has been combating deflation for over two decades………………………………………..Full Article: Source

Europe’s currency is toughening up, in part because fiscal crises in the US and Japan suddenly seem much more dire. But how long will it last? The euro had been in decline against the dollar and the yen since the end of February through July 24. After a rally through Oct. 17, it dropped again until Nov. 13. During those specific declines and during that seven-month period in general, money flowed into dollars and yen and into assets denominated in those currencies.
A rising dollar weighed on the price of commodities such as gold and oil. Japanese exporters found themselves at a painful disadvantage in selling their goods — such as cars — to European customers who weren’t inclined to buy anyway as their economies slipped into recession…………………………………….Full Article: Source

As some analysts feared, Wednesday’s launch of a new wave of Federal Reserve money printing (more politely known as “QE4″, or the central bank’s fourth round of “quantitative easing”) failed to spur a rally in precious metals markets as prices for both gold and silver ended the week below where they began.
Since, in the past, new stimulus measures by the Fed have been a major factor in pushing metal prices higher, this has prompted some concern amongst investors……………………………………..Full Article: Source

There’s always a difference in the markets between “de facto” (”in practice”) and “de jure” (”in law”), and recent announcements regarding international reserve currencies would seem to reflect that difference. Word came out in mid-November that the IMF is likely to reclassify the Australian dollar and Canadian dollar as “official” reserve currencies. While this is indeed a significant development, it seems more a reflection of reality than a major prospective change.
Foreign exchange reserves are held by most governments as a means of facilitating trade and better managing (and maintaining) credit……………………………………..Full Article: Source

One of the most important and oft-discussed topics in asset management is benchmarking. Even though the daily turnover in global currency markets has reached over $4.7 trillion, (according to Bank for International Settlements) investors need to be aware of some key issues when it comes to benchmarking currency portfolios.
Growth in Global Currency Markets: In terms of daily turnover, global currency markets are almost 20 times the size of global equity markets and about 36 times the size of global bond markets. From 2007 to 2010, just the daily spot transactions had a 48% increase, from $1 trillion to $1.49 trillion……………………………………..Full Article: Source

With the euro zone debt crisis is far from over, a new strategy has been put forward to alleviate the strain currently faced by households and consumers across the continent. Consultancy firm Strategic Decisions Groupis urging Europe’s leaders to adopt a dual currency approach as an alternative to the greater fiscal integration that is currently being discussed at EU summits.
Managing director of its Europe and Middle East arm, Mazen Skaf, says that struggling countries should be given the flexibility to introduce national currencies alongside the euro………………………………………..Full Article: Source

There’s always a difference in the markets between “de facto” (”in practice”) and “de jure” (”in law”), and recent announcements regarding international reserve currencies would seem to reflect that difference.
Word came out in mid-November that the IMF is likely to reclassify the Australian dollar and Canadian dollar as “official” reserve currencies. While this is indeed a significant development, it seems more a reflection of reality than a major prospective change………………………………………..Full Article: Source

Hopes of the US Federal Reserve Bank announcing more stimulus measures to boost economy could drive gold higher on Tuesday. However, the dollar’s weakness against a basket of major currencies could cap gains.
Economists say that the US Fed will announce purchase of bonds worth $ 45 billion after its meeting on Tuesday and Wednesday. This would mean pumping money in the US economy to improve employment prospects………………………………………..Full Article: Source

The Polish zloty led a resurgence against the euro Tuesday. The currency, along with other emerging European currencies, got a boost after a key economic indicator in Germany surged in December raising expectations of growth in that economy.
Germany is the main market for Polish and Czech exports, and these economies had slowed in the third quarter due to weaker demand for goods. Investors had begun to worry that the downturn would extend well into 2013, and this had weakened the Polish zloty and Czech koruna…………………………………………Full Article: Source

The Aussie dollar has rallied to its highest level in almost three months after a rebound in German investor confidence lifted global markets. At 7am this morning, the currency was trading at US105.22 cents, up from US104.82c.
It reached a high of US105.33c overnight, its highest level since September 17, after a closely watched indicator of economic sentiment in Germany rose to 6.9 points, from minus 15.7 in November………………………………………..Full Article: Source

The head of the Bank of England warned on Monday that too many countries were trying to weaken their currencies to offset the impact of the slow global economy and the trend could grow next year.
“You can see, month by month, the addition to the number of countries who feel that active exchange rate management, always to push their exchange rate down, is growing,” Mervyn King said in a speech………………………………………..Full Article: Source

Brazil’s real gained on Monday after a central bank director said the currency still has room to appreciate, adding to expectations that the government may further intervene in the foreign exchange market.
Other Latin American currencies also strengthened as a positive Wall Street session fueled investors’ appetite for risk, while Venezuela’s bonds rallied after ailing President Hugo Chavez named a successor, raising the prospect of his departure after 14 years in power………………………………………..Full Article: Source