Since the beginning of the year, Chinese officials have been re-allocating their trillion-dollar reserves into assets of other foreign nations. For the first six months of the year, China invested $3.4 billion in Korean securities and another $20.1 billion in Japanese government bonds. At the same time, it has slowly and steadily reduced its exposure to US Treasuries.
[Read more...]Sterling Bulls Get It All Wrong
August 17, 2010 By Leave a Comment
On August 11, the United Kingdom's Monetary Policy Committee released its outlook on the United Kingdom's inflationary and economic environment. The report, which offers traders and investors a peek into what the governing monetary policy body is thinking, was not good. It revised the country's growth and inflationary expectations lower, ending any hope that interest rate cuts were in the cards.
[Read more...]Australian Dollar’s Run May Hit a Short-Term Snag
August 6, 2010 By Leave a Comment
$3.2 billion. That's the record trade surplus Australia's Bureau of Statistics announced on August 3, thanks in part to Chinese demand for the country's rich iron ore and coal exports. And that's just the latest good news from the island continent that has speculators feeling bullish about the Australian dollar (AUD).
[Read more...]Forget “Stressâ€? Tests – Three Reasons the Euro’s Rise Is Only Temporary
July 29, 2010 By Leave a Comment
Who would have thought that the euro would have come this far, this fast? After falling to a 4-year low of $1.19 against the US dollar, the European currency has made a sharp recovery – trading today at around $1.30.
But don't think for a moment that the euro is a safe bet again. The fact is, the euro is floating higher because of three simple factors that could disappear at any time. And its surge has nothing to do with the European Central Bank's “stress tests� or even Europe's fundamentals.
[Read more...]BP Bids Likely to Be Short-Term Support for Sterling
July 23, 2010 By Leave a Comment
The British pound has continued to strengthen in the past week, especially against the US dollar. Up till now, with the country's economic turmoil and rising public concern over divided central bank officials, currency market sentiment sold the sterling short. However, some new speculation regarding one of Britain's largest companies has helped to at least support the underlying currency in the short term.
[Read more...]BP Bids Likely to Be Short-Term Support for Sterling
July 23, 2010 By Leave a Comment
The British pound has continued to strengthen in the past week, especially against the US dollar. Up till now, with the country's economic turmoil and rising public concern over divided central bank officials, currency market sentiment sold the sterling short. However, some new speculation regarding one of Britain's largest companies has helped to at least support the underlying currency in the short term.
[Read more...]The Secret Behind the Soaring Yen – And How High It Could Fly
July 1, 2010 By Leave a Comment
In the past couple of months, a lot of attention has been placed on the euro. The single currency has fallen hard and fast. But few people are focusing on the strength of the Japanese yen.
The Asian currency has appreciated rapidly over the last eight months against the US dollar. But more importantly, it has strengthened against the euro. From an exchange rate of 140 yen per euro back in the beginning of the year, it has jumped to just 108 yen per euro in the month of June. That's a 23% advance in a little over seven months.
[Read more...]Russia’s Central Bank Could Boost the Australian and Canadian Dollars
June 24, 2010 By Leave a Comment
The world's third-largest foreign exchange reserve is about to become even more diversified.
First Deputy Chairman Alexei Ulyukayev of the Russian central bank said it is looking to move into other currencies in the near term. The biggest beneficiaries are likely to be Australian and Canadian dollars – opening a door for long-term appreciation for both.
[Read more...]
How Japan and Switzerland Could Reshape the Currency Markets
Japan and Switzerland are facing the same threat to their economic health. And so far, every step they've taken to make things better has only made them worse.
But there is one way they could conceivably get out of this mess. And even though no one is talking about it yet, a mere hint of the possibility could send China-sized shockwaves throughout the global currency markets.
[Read more...]