In the latest news regarding Iran’s insistence that all international transactions (including oil sales) be conducted in euros, Brazil has become the first Latin American country to buy in to Tehran’s anti-dollar campaign. Iran is interested in Brazilian cars, trucks, jetliners, as well as replacement equipment for its refineries and oil wells. These sales would […]
Do you smell the smokey scent of burning paper? That’s the beginning of the impending War On Cash. A recent editorial that appeared on Bloomberg Business today boldly declares, “Bring On the Cashless Future.” In reference to the growing push for fully digital currencies to replace other forms of money, the editorial staff extols the […]
Within the omnibus spending bill recently passed by Congress is the obscured Division E, Title I, Section 117, which prevents the U.S. Treasury Department from redesigning the one dollar bill. Despite the mostly cosmetic alterations to the $5, $10, $20, and $50 bills—color changes, added watermarks, etc.—the design of the one dollar bill has remained […]
Contrary to expectations, the US dollar rally after the Fed’s first interest rate hike since 2006 has failed to materialize. Conventional wisdom held that an increase in interest rates would strengthen the dollar, especially as the other major central banks continued their stimulus programs. But the dollar is not responding to the rate hike as […]
South Africa is home to the highest-cost gold miners in the world, placing the country’s huge gold and platinum mining industries in peril due to persistently low metal prices. The country has been in turmoil in other ways as well, with a floundering South African rand and lack of government stability a common theme.
There is always a fair amount of buzz in the financial news regarding the imminent demise of the dollar—and rightly so. This is especially true in the long-run. The “reigning heavyweight champion” of fiat currencies is still, by and large, the world’s reserve currency of choice. However, there’s increasingly reason to believe that the USD […]
With all of the upheaval on its stock market and hand-wringing over the consistency of its currency’s value, China has nonetheless pushed forward with a two-pronged plan to shore up its financial system. Through a consistent program of adding gold to its reserves and following the prescriptions of the International Monetary Fund (IMF), it seems […]
The US dollar continued its rally today, crushing all comers. The euro is at a seven-month low of 1.0575 against the dollar this morning. EUR parity with USD becoming a more likely scenario as ECB president “Super Mario” Draghi announces he is going to feed the ECB’s quantitative easing program a yellow mushroom next week. […]
The New York Attorney General’s Criminal Enforcement and Financial Crimes Bureau has opened an investigation into forex manipulation by four interdealer brokers who operate currency trading platforms. Subpoenas were served last week to Tullet Prebon PLC, BGC Partners, Inc, GFI Group, and TFS-ICAP Ltd. TFS-ICAP is a joint venture between ICAP Plc and Cie. Financiere […]
The global commodity markets are showing no signs of breaking out of their prolonged slump with more pressure from the dollar and unfavorable weather patterns around the world. (The weather may be a weak explanation for poor consumer spending—think last winter—but unavoidable as a factor influencing resource extraction.) The precious metals followed the broader commodities […]
While even the most cautious observers think it’s all but certain that the Fed tightens monetary policy at its December gathering, what’s an even greater certainty is that central banks in Japan and Europe are planning to move even further in the opposite direction.
The big news in currency markets this morning is the recommendation by a policy committee of the IMF that China’s currency, the yuan, be included in the Special Drawing Rights basket of currencies. Forex traders put the odds of the yuan’s inclusion in the SDR at the IMF’s November 30 meeting at around 80%. This […]
The European Central Bank (ECB) made its announcement from yesterday’s policy meeting this morning at 7:45 am, and the tone was certainly dovish. ECB President Mario Draghi repeatedly highlighted the merits of the central bank’s quantitative easing program that kicked off at the beginning of the year—even though, to date, the measure has produced virtually […]
What is Bitcoin, exactly? For many months (that have now dragged into years), the international investing community has grappled with this question to differing degrees. While it is in essence considered by its proponents to be a “cryptocurrency,” or encrypted digital currency, the official status of Bitcoin has been laid out by the government: the […]
Although it hasn’t been given much attention during the last month with all eyes on China’s economy and the Federal Reserve, the forex market is hardly immune from these developments in the global economy. There are even reason to believe that emerging market currencies now behave more closely to their developed market counterparts than not. […]
Kazakhstan’s currency, the tenge, took a 23% plunge on Thursday morning, joining the long list of emerging market currencies—from the Turkish lira to the Brazilian real—that have tanked so far this year. While the major world currencies of certain developed markets like the pound sterling and the euro have been largely steady, and others such […]
There have been a number of analysts of the foreign exchange market (shorthand: forex) who in recent months have pointed out a troubling trend by central banks. Through extreme monetary tools such as quantitative easing, or “QE,” countries have been systematically devaluing their currencies in order to gain a competitive advantage in international trade. By […]
The Chinese government uncorked a shocker of a move today, when it suddenly devalued the renminbi (yuan) by over 1.9%. This is the largest drop in the value of China’s currency in over 20 years, causing global markets to reel. A continuing decline in exports and domestic demand apparently forced Beijing’s hand. While not officially […]
This summer’s strong rally in the dollar has figured into the discussion of nearly every economic subject, from commodities to corporate earnings. As the first interest rate hike in nine years by the Fed looms ever-closer, the dollar has been coiling in a 6-point range. It’s due for a breakout–but in which direction?