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Commodities Briefing - Category | Currencies more

Goldman’s Cohn: “We are in currency wars”

Posted on 23 January 2015 by VRS  |  Email |Print

Countries around the world are already engaged in a currency war in a bid to boost growth, Gary Cohn, the president and chief operating officer of Goldman Sachs, said on Thursday.
“We are in currency wars,” Cohn told a panel discussion at the World Economic Forum in Davos, Switzerland. “The prevailing view is that the easy way to stimulate economic growth is to have a low currency.”……………………………………….Full Article: Source

Is Dollar Next? Investors Reassess After Swiss Shock: Currencies

Posted on 22 January 2015 by VRS  |  Email |Print

After Switzerland shocked markets by scrapping its currency cap, investors are beginning to ask whether a policy surprise may be lurking for the dollar, too. Samson Capital Advisors LLC said the Swiss move, which sent the franc surging as much as 41 percent against the euro last week, was “a good reminder” of the risks of following the herd, just as speculators pushed bets on a dollar rally to a new high.
A shock from the Federal Reserve, such as raising interest rates less quickly than investors expect, may derail the greenback after it advanced to the highest in a decade, State Street Global Advisors Inc. warned………………………………………..Full Article: Source

Egypt’s currency falls to historic low against dollar

Posted on 22 January 2015 by VRS  |  Email |Print

Egypt’s currency has fallen to a historic low against the dollar after a central bank auction. The bank said it offered 40 million dollars on Wednesday, selling a total of $38.4 million at a cutoff rate of 7.34 Egyptian pounds per dollar.
The central bank, which controls the official exchange rate, has allowed the currency to slide several times over the last week. On the black market it has traded even lower, with dollars fetching up to 7.94 Egyptian pounds at private exchanges………………………………………..Full Article: Source

Commodity Currencies: What’s Behind The Big Moves?

Posted on 21 January 2015 by VRS  |  Email |Print

It is a new trading week and currencies are on the move. The Canadian and New Zealand dollars saw the largest swings intraday with the yen pairs not far behind. USD/CAD rose to its strongest level in 5.5 years ahead of the Bank of Canada’s monetary policy announcement.
While the BoC is not expected to lower interest rates, the decline in oil prices, job losses in December, slowdown in manufacturing activity, drop in housing starts and building permits gives them plenty of reasons to be concerned about the outlook for their economy. Since their last monetary policy meeting on December 3, oil prices dropped more than 30% and this morning we learned that manufacturing sales dropped for the second month in a row………………………………………..Full Article: Source

Obama’s Currency Manipulation Dilemma: Pay Me Now Or Pay Me Later

Posted on 21 January 2015 by VRS  |  Email |Print

A vital aspect of free and fair trade is that countries that trade with one another shouldn’t artificially devalue their currencies in order to make their imports and exports more profitable at their trading partners’ expense.
Currency manipulation is no small thing and it’s widespread. The way it works is that a central bank buys a lot of foreign currency, usually dollars, in order to lower the value of its own currency against the foreign one. That makes exports less expensive and more attractive to foreign buyers………………………………………..Full Article: Source

Denmark vows to keep currency peg, likely to cut rates on Thursday

Posted on 21 January 2015 by VRS  |  Email |Print

Denmark’s political and central banking establishment is uniting in a campaign to kill speculation that the country might follow Switzerland in scrapping a currency link to the euro.
With markets expecting upward pressure on the Danish crown to persist, most analysts predict an interest rate cut as soon as Thursday - which would be the second this week - if the European Central Bank moves to stimulate the euro zone economy………………………………………..Full Article: Source

How Can Exchanges Compete with a Bitcoin ETF?

Posted on 20 January 2015 by VRS  |  Email |Print

Much of the bitcoin community is excited at the prospect of a bitcoin ETF due to the assumption that it could bring many new speculators into the market. After all, if everyone with access to assets traded on the NASDAQ can just as easily trade bitcoin in the same account as their other investments, it’s possible that more traditional investors may take a shot at the digital currency.
While there’s been plenty of attention on the possible Winklevoss bitcoin ETF, there hasn’t been much discussion on the effect the ETF could have on current bitcoin exchanges. Once traders have access to a regulated bitcoin ETF on the NASDAQ, why would they spend time trading on one of the frequently-hacked bitcoin exchanges?……………………………………….Full Article: Source

Will Denmark be the next country to cause currency chaos?

Posted on 20 January 2015 by VRS  |  Email |Print

Investors are worried that the Danish central bank could abandon its peg, following the Swiss in eschewing the link between its currency and the euro. In the aftermath of the market panic triggered by the Swiss National Bank’s shock decision to scrap its euro ceiling for the franc, investors are asking whether Denmark could do the same.
Denmark is the last major economy to peg its currency - the krone - to the euro, and has conducted a fixed exchange rate policy since the 1930s………………………………………..Full Article: Source

The Truth About Currency Manipulation

Posted on 20 January 2015 by VRS  |  Email |Print

U.S. President Barack Obama’s signature international economic initiative, and the centerpiece of his pivot to Asia, is the Trans-Pacific Partnership (TPP), a trade agreement of a dozen Asia-Pacific countries. But the partnership faces a major hurdle. Bipartisan majorities of both houses of Congress insist that the TPP forcefully address the manipulation of exchange rates, the practice through which some countries keep their currencies artificially weak and thus unfairly make their exports more competitive.
The U.S. auto industry, likewise, has indicated that it will oppose the TPP unless the issue is effectively addressed, and it has politically important supporters in the labor unions and the steel industry. At the same time, however, many observers believe that a U.S. effort to raise currency concerns would torpedo the agreement. ……………………………………….Full Article: Source

Commodities shaken by the Swiss depeg from euro

Posted on 19 January 2015 by VRS  |  Email |Print

A week of exceptional volatility culminated on Thursday with the shocking move by Switzerland’s central bank. The removal of the Swiss franc’s peg to the euro triggered an unbelievable rush of buy orders into the currency, pushing it as much 40 percent higher against the euro before settling back to a 19 percent gain. By then, however, the damage to market confidence had been done and a major risk-off move had swept across most asset classes, including commodities.
Precious metals saw the biggest gains of the week with both silver and gold dislocating further from the ongoing rise of the dollar. The Swiss move has been interpreted as a precursor for the full scale introduction of quantitative easing by the European Central Bank next Thursday…………………………………………Full Article: Source

Q&A: Why Switzerland has ditched its currency ceiling

Posted on 19 January 2015 by VRS  |  Email |Print

Why was the Swiss National Bank trying to manage the value of its franc against the euro? During the middle of the eurozone crisis, investors piled into assets they considered safe. The price of gold soared; the precious metal was thought likely to maintain its value even amid economic turmoil.
The same logic applied to Swiss assets. Money piled into the country. The Swiss National Bank decided to implement a minimum exchange rate — capping the value of the franc at just over à0.83 — to keep things under control and ensure the country’s exporters were not hurt by the franc getting too strong………………………………………..Full Article: Source

Swiss Currency Has Shot Up 15% So Far Today. Here’s Why That Matters

Posted on 16 January 2015 by VRS  |  Email |Print

Chaos in the currency market is a sign of deep problems for Europe—and the whole global economy. The global economy got a lot more interesting today, and maybe a little more scary, when the Swiss National Bank ended its commitment to a fixed exchange rate between the Swiss Franc and the euro.
Currency markets went into a frenzy. The Swiss franc immediately rose 30% in value against the euro, mirrored by a spike in its U.S. dollar value. Some of those gains have pulled back, with the currency up about 15% at midday. That’s still a huge move………………………………………..Full Article: Source

Currencies: Going cuckoo for the Swiss

Posted on 16 January 2015 by VRS  |  Email |Print

Currencies don’t normally move that far on a daily basis—2 to 3% is a big shift. The exception is when a country on a fixed exchange rate suffers a devaluation; then a 20-30% fall is a possibility. But a 20-30% plus upward move is almost unprecedented. That, however, is what happened to the Swiss franc on January 15th, as Switzerland’s central bank abandoned its policy (instituted back in 2011) of capping the currency at Sfr1.20 to the euro.
Only a month ago, the central bank said it would enforce the policy with the “utmost determination”. The Swiss National Bank (SNB) announced that: The minimum exchange rate was introduced during a period of exceptional overvaluation of the Swiss franc and an extremely high level of uncertainty on the financial markets………………………………………..Full Article: Source

China’s yuan shifts into currency major league

Posted on 15 January 2015 by VRS  |  Email |Print

After a surge in interest last year, China’s yuan is heading for the currency major league, with trading volumes more comparable to the euro, sterling, Australian dollar and Swiss franc than its emerging market peers.
Offshore trading in the yuan, whose convertibility is still tightly controlled by Beijing, soared some 350 percent on Thomson Reuters trading platforms in 2014. Rival platform EBS - the main venue for dollar, yen and euro trading - told Reuters the yuan ended last year as one of its top five traded currencies………………………………………..Full Article: Source

2015: The Currency War

Posted on 15 January 2015 by VRS  |  Email |Print

War sounds scary. In the traditional sense, war evokes casualties and loss. For investors, currency wars simply convey economic redistribution. For instance, if there were only two stores in town selling identical items and one store raised prices while the other store lowered prices, demand would certainly follow the discount … but overall demand would be the same.
Think of global central banks as the pricing departments for their respective countries. With sluggish demand and inflation pestering global economies, pricing departments have to become more aggressive to lure shoppers. So don’t be scared, but be aware. Currency war games will direct markets in 2015. Now let’s meet the combatants ………………………………………….Full Article: Source

Russia’s Ruble Sinks to Lowest Level Since December Currency Ru

Posted on 14 January 2015 by VRS  |  Email |Print

Russia’s ruble Tuesday sank to its lowest levels since a run on the currency mid-December, wounded by a fresh slump in oil prices and rising fears that the central bank’s emergency measures to rescue the currency last month aren’t enough to staunch the crisis.
New selling pressure is possible before the end of the week, traders say, when Russian government officials are expecting rating firm Standard & Poor’s to downgrade Russia’s status to junk………………………………………..Full Article: Source

The dollar will again shake the world in 2015

Posted on 14 January 2015 by VRS  |  Email |Print

The U.S. dollar, which rapidly strengthened in 2014, shook the world’s several local currencies, strong or weak, last year. Many local currencies lost value against the dollar. The euro, especially in the second half of 2014, was seriously shaken, but nevertheless, its annual average value in 2014 was the same as its average annual value in 2013. Thus, its position against the dollar stayed the same on an annual average basis. But it is difficult to say the same for 2015.
The Japanese yen, the British pound, Norwegian, Swedish and Danish krone and the Canadian dollar were all currencies that continuously lost value against the U.S. dollar. The rates are, of course, different; the currencies of emerging countries, including Turkey, lost values in different rates………………………………………..Full Article: Source

On track for a weaker yuan in 2015

Posted on 13 January 2015 by VRS  |  Email |Print

On 29 December, the State Administration of Foreign Exchange (SAFE) in China released its statement of China’s Net International Investment Position (IIP) for the third quarter of 2014. IIP is a statement of how much foreign currency assets the country has and how much of foreign currency liabilities the country has incurred. China’s net IIP declined in the third quarter.
The net IIP was $1.8 billion compared to $1.97 billion at the end of 2013. This has occurred despite the slight rise in China’s foreign exchange reserve assets from $3.88 trillion to $3.95 trillion during the same period. The culprits are the rise in (a) foreign currency loans and (b) currency and deposits. The latter refers presumably to foreign currency loans of the banking system………………………………………..Full Article: Source

Czech Koruna, The World’s Worst Performing Currency

Posted on 13 January 2015 by VRS  |  Email |Print

What’s the worst performing currency so far in 2015? Not the oil-soaked Norwegian krone, or even the crisis-hit Russian ruble. Nor the swooning euro or sterling. All have been pipped to the New Year’s wooden spoon by a perhaps surprising candidate: the usually dull Czech koruna.
The currency weakened by 1% against the euro on Monday following some disappointing retail sales data from the Czech Republic, taking its losses for the year so far to 2.7%. The prospect of further easing from the European Central Bank is dragging down the euro side of the equation here, but against the dollar, no currency has fared worse in 2015 than the koruna’s 5.4% loss………………………………………..Full Article: Source

Currency swings pose challenges for Asian groups

Posted on 12 January 2015 by VRS  |  Email |Print

Viewed from the South Korean port of Ulsan, home to the world’s largest shipbuilder Hyundai Heavy Industries, it is jackpot time on the international currency markets. Hyundai derives nearly all its revenues in dollars, a rising currency, while a big chunk of its spending is in weak euros — a sweet equation for its bottom line.
Machinations at the Federal Reserve and European Central Bank are reverberating across Asia through the currency markets, and for many companies, the impact is not as benevolent as at Hyundai. Makita, a Japanese power tool maker which generates 40 per cent of its sales in Europe, loses Y600m of operating profit for every Y1 rise against the euro………………………………………..Full Article: Source

How to Stop Currency Manipulation

Posted on 12 January 2015 by VRS  |  Email |Print

If the new Congress can agree on anything this year, it may well be the Trans-Pacific Partnership, a trade deal between the United States and 11 other countries throughout the Asia-Pacific region. Passions run high when it comes to trade deals these days, and the Obama administration is working hard to sell it to labor unions, which roundly oppose it.
So far the pitch has been about what the deal, as written, will do to help the American economy — a pitch that hasn’t won over many, on either side of the partisan divide. But there’s one thing the administration can do that will both win over some opponents and address one of the biggest issues in global trade: add a chapter on currency manipulation………………………………………..Full Article: Source

Beware the Currency Wars of 2015

Posted on 09 January 2015 by VRS  |  Email |Print

It will be very difficult to avoid deflation and promote growth in 2015 and beyond without major changes to the global monetary system, some of which are unthinkable right now. Policy makers in Asia and Europe are already devaluing their currencies, apparently driven by the failure of low interest rates to stimulate investment and by the recognition that the U.S. is the only place that is showing real growth.
Making their exports cheaper, they believe, will help their economies grow. The problem is that if every country devalues its currency, no one wins. And if devaluations become more aggressive and disorderly, it could create great systemic risks world-wide. Dollar borrowers would struggle to find liquidity. U.S. corporations would see their export markets evaporate………………………………………..Full Article: Source

2015: The Year Of Currency Hedging

Posted on 09 January 2015 by VRS  |  Email |Print

One of the great things about exchange-traded funds is that they put institutional-quality tools within reach of every investor. Take the Schwab U.S. Equity ETF: The fund charges 0.04 percent per year, and provides exposure to essentially every stock listed on a U.S. exchange. You can’t get much better than that.
One of my favorite developments along these line in recent years is the advent of currency-hedged ETFs. In 2015, I think they can be critical tools for investors. Most investors don’t realize it, but when you invest in international stocks, currency movements have a huge impact on your returns………………………………………..Full Article: Source

Bitcoin: The magic of mining

Posted on 09 January 2015 by VRS  |  Email |Print

A huge aircraft hangar in Boden, in northern Sweden, big enough to hold a dozen helicopters, is now packed with computers—45,000 of them, each with a whirring fan to stop it overheating. The machines work ceaselessly, trying to solve fiendishly difficult mathematical puzzles. The solutions are, in themselves, unimportant. Yet by solving the puzzles, the computers earn their owners a reward in bitcoin, a digital “crypto-currency”.
The machines in Boden are in competition with hundreds of thousands more worldwide. The first to solve a puzzle earns 25 bitcoins, currently worth $6,900. Since bitcoin’s invention in 2008 by a mysterious figure calling himself Satoshi Nakamoto, people have increasingly traded it for real money, albeit at a wildly varying price……………………………………….Full Article: Source

Indexology: A strong US dollar isn’t bad for all commodities

Posted on 08 January 2015 by VRS  |  Email |Print

A strong US dollar is generally bad news for commodities since historically as the US dollar strengthens, goods priced in dollars become more expensive for other currencies. The historical negative relationship between the US dollar and the S&P GSCI is shown below.
While the broad based indices are negatively correlated with the U.S. dollar, some commodities are more negatively correlated with the US dollar than others. In the long term, since the inception of each single commodity index, ten commodities have a lower than -0.3 correlation to the US dollar: lead, copper, aluminum, nickel, gold, Kansas wheat, Brent, WTI, unleaded gasoline and gasoil with lead leading the pack with the biggest negative relationship at -0.52………………………………………..Full Article: Source

Sterling a thing of the past in commodity pricing

Posted on 08 January 2015 by VRS  |  Email |Print

Sterling — once the dominant currency of commodities markets during the golden years of the British empire — now only keeps its status in a handful of raw materials, the largest being cocoa. If some traders get their way, the British pound could become a thing of the past there too.
As recently as 1993, sterling was still playing a major role in commodities markets.The London Metal Exchange copper contract was denominated in the UK currency until then and shifted to dollars after the ERM crisis; aluminium traded in sterling until 1987, as was tea until 1992 and robusta coffee, the lower quality coffee bean used for instant granules………………………………………..Full Article: Source

Russia’s Currency Crisis Continues: The Ruble Is Crashing Again

Posted on 07 January 2015 by VRS  |  Email |Print

As the price of oil continues its relentless and seemingly unstoppable march down towards $50 a barrel, there has been growing chaos in the Russian financial system. The partial calm of late December, after heavy Central Bank intervention succeeded in putting a temporary halt to the currency’s swoon, has decisively ended.
Earlier today the risk of insuring Russian government bonds against default rose to the highest level since the worst days of the 2009 financial crisis, reflecting widespread concern among investors that “a cut in the nation’s credit rating to junk is imminent.” Perhaps market sentiment about Russia could get worse, but it’s hard to see how………………………………………..Full Article: Source

“Funerals” for Lithuania’s National Currency: Lithuania Joins the Euro

Posted on 07 January 2015 by VRS  |  Email |Print

There was something touching in the symbolic funeral in Vilnius held for the Lithuanian currency, the litas, which received its resting notice as the country formally adopted the euro on January 1. The litas had been in use between 1993 and 2014. If you had asked Nigel Farage of Britain’s UK Independence Party about the service, he would probably have suggested they were burying the wrong one. (The colourful populist insisted on a mock burial of the euro in 2011.)
Moving over to the euro was always a thorny issue. A November poll suggested that 39 percent of the population was against it. Their grounds of suspicion were well founded. While supporters of the euro’s adoption believe – and in this, it is very much a belief – that the adoption of the currency will lead to easier foreign loans and investments – the converse may actually be true………………………………………..Full Article: Source

Belarus lowers official currency rate by 7 pct vs dollar

Posted on 06 January 2015 by VRS  |  Email |Print

The Belarus central bank said on Monday it was lowering its official rate for the Belarussian rouble versus the dollar by around 7 percent, its latest step to defend the currency from the market turmoil affecting neighbouring Russia.
The bank said it was reducing the currency’s official rate to 12,740 roubles per dollar starting on Jan. 6 from 11,900 roubles on Monday and had reduced to 10 percent the tax on buying foreign currency that it had put in place because of increased demand………………………………………..Full Article: Source

Europe readies for another Greek currency crisis

Posted on 06 January 2015 by VRS  |  Email |Print

Talk of Greece crashing out of the euro is back. And the question of whether Europe can handle another crisis in Greece is heightening financial uncertainty for the currency union just as it is struggling to grow and create jobs.
Some analysts and politicians say Greece 2.0 wouldn’t be as rough on the eurozone as the original Greek crisis and default in 2010-2012. They claim the currency bloc has new safeguards. Most investors seem to agree for now. Others argue that’s dangerous complacency………………………………………..Full Article: Source

Why The Canadian Dollar Is Under Pressure

Posted on 05 January 2015 by VRS  |  Email |Print

The Canadian dollar has fallen alongside commodity prices. Global policy in 2014 was not supportive of commodity producers. As the U.S. dollar continues to strengthen, further weighing on commodity prices, the Canadian currency could fall further.
The Canadian dollar continues to fall as commodity prices remain under pressure, as well as heightened interest rate expectations for U.S. policy. CurrencyShares Canadian Dollar Trust is down almost 10% since July, as is seen in the chart below………………………………………..Full Article: Source

Dollar beat all currencies in 2014

Posted on 05 January 2015 by VRS  |  Email |Print

The dollar continued its world-beating ways on speculation the Federal Reserve will raise interest rates this year while other central banks extend stimulus measures. The US currency climbed versus all of its 16 major peers in 2014 and extended those gains Friday as two manufacturing gauge signaled expansion.
The euro slumped to a 4 1/2-year low after European Central Bank President Mario Draghi said he can’t exclude the risk of deflation and signaled the likelihood of quantitative easing is increasing. The Swiss franc weakened to parity with the dollar for the first time in four years and the pound fell as UK factory output slowed………………………………………..Full Article: Source

Commodities to stay volatile in 2015 on strong dollar

Posted on 02 January 2015 by VRS  |  Email |Print

Commodities capped the biggest annual loss since the global financial crisis in 2008, retreating for a record fourth year, as a global glut spurred a rout in oil prices and a stronger dollar cut the allure of raw materials.
The Bloomberg Commodity Index, which tracks 22 products from crude to copper, ended 1.7% lower at 104.3285 points on Wednesday, after dropping as much as 1.8% to the lowest since March 2009 earlier. It lost 17% last year, with crude, gasoline and heating oil the biggest decliners. The fourth year of losses was the longest run since at least 1991………………………………………..Full Article: Source

Euro starts new year at new lows in Asia

Posted on 02 January 2015 by VRS  |  Email |Print

The euro started the new year at 29-month lows in Asia after the head of the head of the European Central Bank fanned expectations it would take bolder steps on stimulus this month, so underlining the U.S. dollar’s rate advantage.
In an interview with German financial daily Handelsblatt, Mario Draghi said the central bank stood ready to respond to the risk of deflation. Consumer price data for the euro zone due on Jan. 7 are widely expected to show a fall in annual terms………………………………………..Full Article: Source

China quietly joins Asia’s currency wars to avert deflation

Posted on 23 December 2014 by VRS  |  Email |Print

China is exposed like a sore thumb as countries devalue on all sides, from Russia, to Japan, Indonesia and Malaysia. China has for the first time warned openly about the excessive strength of the Chinese yuan, a sign that the country may be shifting its exchange rate policy as deflation takes hold and currencies slide across Asia.
Yi Gang, the deputy governor of the People’s Bank of China (PBOC), said the yuan’s rise had been “very fast” over the past year as it surges in tandem with the US dollar, making it the world’s second strongest currency………………………………………..Full Article: Source

Russian currency may reach 61 rubles vs dollar in 2015 with current oil prices — Kudrin

Posted on 23 December 2014 by VRS  |  Email |Print

The Russian currency may reach 60-61 rubles to the dollar by late 2015, if the world oil prices stay at their current level and the West does not tighten its sanctions against Russia, former Finance Minister Alexey Kudrin said on Monday.
“If oil prices stay at the current level, the sanctions are not tightened and the government takes sound measures, the ruble exchange rate will even strengthen in the first quarter of 2015,” Kudrin said. World oil prices are currently hovering at slightly over $60 per barrel. “By the end of the year (2015), it may reach its current value of about 60-61 rubles to the dollar,” he said………………………………………..Full Article: Source

Precious metals- a hedge against volatility in paper currency

Posted on 22 December 2014 by VRS  |  Email |Print

The observation of modern finance through the lens of sound money requires an onion peeler. Each time I imagine onions, I think of my soft contact lens patients; the ones who abuse them. I think of the patients who wear them too long or through periods of mild irritation or redness and practice poor hygiene.
Soft contact lenses mask normal corneal sensitivity. They act like tiny onion goggles. With soft lenses in place, one can literally chop onions and not feel the normal irritating sensation at all. The problem is they tend to be the last to know about the trouble………………………………………..Full Article: Source

Rouble crisis sparks run on Belarus currency

Posted on 22 December 2014 by VRS  |  Email |Print

Belarussians were in a panic over the Russian rouble’s plunge, rushing to convert their savings to dollars and euros as they fear a devaluation of their currency. The run on the Belarussian rouble forced the central bank to announce a “temporary” tax of 30 percent on all purchases of foreign currency. The bank also required all exporters to convert half of their foreign revenues into local currency.
Interest rates were raised to encourage Belarussians to keep their money in their bank accounts, according to a statement published on the central bank’s website. The Belarussian rouble is not officially pegged to the Russian currency, but the ex-Soviet country’s economy is heavily dependent on its giant neighbour………………………………………..Full Article: Source

Deadline to exchange pre-2005 currency notes ends on January 1

Posted on 22 December 2014 by VRS  |  Email |Print

People have only 11-days left to exchange currency notes of various denominations, including 500 and 1,000, which were printed before 2005. The deadline for exchanging the pre-2005 notes is January 1, 2015.
The Reserve Bank has so far shredded 144.66 crore such notes valued at Rs 52,855 crore since the launch of the drive to take out the pre-2005 notes from the circulation. Post-2005 notes have added security features and help in curbing the menace of fake currency………………………………………..Full Article: Source

Ruble Crisis Ripples Through Wheat as Bulls Advance: Commodities

Posted on 22 December 2014 by VRS  |  Email |Print

The ruble crisis is rippling through the global wheat market. As Russia’s currency extended a plunge to a record low against the dollar last week, the nation slowed grain shipments to preserve stockpiles and keep domestic prices in check. Russia is the fourth-largest exporter and the measures spurred hedge funds to triple their bets on higher prices.
Futures jumped to the highest since May last week after an exporters’ association said Russia denied certificates that grain sellers and buyers need………………………………………..Full Article: Source

Russia’s currency crisis poses risks to other emerging markets

Posted on 19 December 2014 by VRS  |  Email |Print

The rouble’s volatility has turned deteriorating sentiment into a sharper, broad-based sell-off that is even affecting oil importing countries. In August 1998, Russia announced it would devalue the rouble and default on its domestic debt. The crisis sent shockwaves through the global financial system and led to the collapse of Long-Term Capital Management, a US hedge fund.
The fact that parallels are now being drawn between the currency crisis that Russia is suffering and the country’s 1998 default speaks volumes about the severity of the turmoil that has engulfed Russia’s financial markets and led to sharp declines in other emerging market assets………………………………………..Full Article: Source

13 reasons why the Russian currency crisis is a game changer

Posted on 19 December 2014 by VRS  |  Email |Print

Russia has finally lost the economic war on the West, that much is clear. The Russian rouble turned to ‘rubble’ in the last few days as the once great currency went into free fall.
But what is still uncertain is what kind of knee-jerk reaction President Vladimir Putin might try next in a bid to keep his hand on the reins of power. We take a look at the key factors in what will inevitably evolve into an international game changer – if it hasn’t already………………………………………..Full Article: Source

Russian currency collapses: rouble trouble

Posted on 18 December 2014 by VRS  |  Email |Print

Will Russia’s economic woes finally force Vladimir Putin to stop his adventurism and concentrate on problems at home? Russia’s attempt to defend the rouble by pushing up interest rates has failed miserably, as such reactions often do. After a slight rally following the central bank’s intervention, the currency was on the slide once more because the economy’s problems are far more deep-seated than can be dealt with through monetary policy alone.
The fall in oil prices has painfully exposed the Russian economy’s dependence upon world consumption at a time of falling demand. Moscow has also found itself at the mercy of Saudi Arabia, which could have pushed Opec to cut supplies and restore prices, but chose not to. That was mainly to see off the threat from American shale, but also gave the Saudis the chance to hurt Russia for supporting their enemies in Syria and Iran…………………………………….Full Article: Source

Nigeria’s Currency at Record Low

Posted on 18 December 2014 by VRS  |  Email |Print

Nigeria’s currency slumped to an all-time low against the U.S. dollar Wednesday, pummeled by the tumbling price of oil, rendering the central bank’s staunch efforts to stem the decline ineffective.
The dollar rose as high as 187 naira in early afternoon, eclipsing a previous record of 186.90 set on Dec. 2. That brings the buck’s year-to-date climb against the naira to 16.8% and its appreciation so far in December to 4.7%…………………………………….Full Article: Source

The falling rouble – all you need to know about Russia’s currency crisis

Posted on 17 December 2014 by VRS  |  Email |Print

Economic and political headwinds are battering Russia whose currency has been weakened by the freefalling oil price and western sanctions. The Russian central bank raised interest rates to 17% in an attempt to prevent the rouble’s collapse. But the dramatic move failed to stem the decline, with the currency hitting new all-time lows against the dollar.
Russia’s central bank has taken the drastic step of raising its main interest rate to 17%, a rise of 6.5 percentage points. The announcement – made around 1am local time – is a desperate attempt to restore confidence in the rouble, which has almost halved in value against the dollar in six months. Last week, the central bank raised rates by 1%, but this failed to calm jitters about an economy that is suffering from falling oil prices and western sanctions……………………………………..Full Article: Source

Rouble Woes: Six Stages Of A Currency Crisis

Posted on 17 December 2014 by VRS  |  Email |Print

With the rouble on extremely shaky ground, it is far from certain that the IMF would be willing to come to Russia’s rescue. If you’ve never witnessed a currency crisis, here’s how they usually go, in six simple steps:
1. Your currency gradually creeps downwards. This can happen over a matter of months as your current account deficit - the country’s ledger with the rest of the world - deteriorates. 2. Suddenly, overnight, investors panic. Their withdrawals of money from your country, until now a steady stream, become a flood……………………………………..Full Article: Source

Russian ruble’s fall: A classic ‘currency collapse’

Posted on 17 December 2014 by VRS  |  Email |Print

The decline of the ruble is the result of Western policy. The question now is how will Putin respond? The Russian economy was already in the running for having the worst year in 2014, sandwiched somewhere between Congressional Democrats and Sony Entertainment Pictures.
Then the price of oil—the commodity upon which the Russian economy is built—began to fall sharply, draining the nation’s economy of foreign money and crimping its growth. This dynamic drove the ruble sharply lower, culminating in an 11% drop on Monday, which forced Russia’s central bank to raise interest rates by a whopping 650 basis points, all but assuring a deep and painful recession in 2015……………………………………..Full Article: Source

Russian Ruble Crashes to World’s Worst-Performing Currency

Posted on 16 December 2014 by VRS  |  Email |Print

The ruble collapsed by 10 percent against the U.S. dollar Monday earning the Russian currency the dubious laurels of the world’s worst-performing currency this year. The Russian currency has now fallen 49.3 percent against the greenback since January, according to data from the Moscow Exchange. The drop takes it below the Ukrainian hryvna, which has weakened 47.9 percent in 2014.
Monday’s plunge was the largest single-day fall for the ruble since the financial crisis of 1998 when Russia was forced to default on its debt after exhausting its reserves in a fruitless bid to prop up the currency………………………………………Full Article: Source

Which poorly performing currency will rise in 2015?

Posted on 16 December 2014 by VRS  |  Email |Print

The Russian rouble is among the worst-performing currencies this year, shedding nearly 40 percent of its value against the U.S. dollar year to date. The recent slump in energy markets could signal more losses ahead, following central bank governor Elvira Nabiullina’s decision last month to tie the rouble’s fortunes to the price of oil.
Fuel prices have been in a downtrend since June, losing nearly 50 percent of their value, on the back of a price war waged by OPEC (the Organization of Petroleum Exporting Countries) against the U.S. shale producers and as demand from China decreased amid slowing growth………………………………………Full Article: Source

Rupee stands tall amid currency slides, likely to take emerging market crown

Posted on 15 December 2014 by VRS  |  Email |Print

The Indian rupee is poised to end the year as the best-performing major emerging market currency versus the US dollar as hopes of economic and political stability drew funds despite a slide in peer currencies such as Russia’s rouble and Brazil’s real on fund flow back to the US expecting higher interest rates.
In contrast to 2013 when the rupee was the worst performer sliding about 12.36 per cent (according to ETIG data), the currency is down less than a percentage this year as foreign funds invested Rs 2.62 lakh crore or around $42 billion in equity and debt, data from the Securities and Exchange Board of India ( Sebi) showed………………………………………..Full Article: Source

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