There is a war raging behind the scenes among the world’s currencies. Chris Mancini, an analyst with the $400-million Gabelli Gold Fund, believes that gold will emerge the victor. In this interview with The Gold Report, Mancini makes his case for why gold is a currency and not just a relic, and why . . . → Read More: Gold as a Weapon in the Currency War: Chris Mancini
Intercontinental Exchange has announced cash-settled futures on the Indian Rupee and the Brazilian Real [press release] [Saabira Chaudhuri in the Wall Street Journal]. With this, ICE is the first serious global exchange to start trading in the rupee.
Vimal Balasubramaniam and I have pointed out that the global market for the Indian rupee is adding . . . → Read More: Rupee and Real futures at ICE
by Shubho Roy and Ajay Shah.
The macroeconomic setting
India’s macroeconomic woes consist of a high inflation, low GDP growth and a drop in asset prices. The loss of momentum is visible in the seasonally adjusted data:
Indicator Early 2009 Latest GDP growth (QoQ, saar) 9.83 Q2-2009 4.25 Q4-2011 Inflation (CPI-IW, pop, saar, 3mma) . . . → Read More: Evaluating responses to India’s macroeconomic crisis
Chinese Yuan and U.S. Dollars
The Wall Street Journal reports that China is decreasing its holdings of U.S. dollars
Fresh data suggest China is moderating its appetite for investing in U.S. securities, a trend that could mean lower flows of cheap capital from Beijing and a possible rise in borrowing costs across the American . . . → Read More: China’s Currency Holdings
By and large, I have felt that RBI has done a pretty good job of the exchange rate. They doubled currency flexibility twice, in 2004 and 2007. In 2009, they shifted to a floating rate. There were two problems:
They continue to sometimes do tiny blocks of trading on the currency market. In a . . . → Read More: RBI reaches for capital controls
In recent months, we’ve had a few slip-ups by the official statistical system in India:
Yesterday’s IIP release was preceded by a mistake. Mint says: On Monday, the government was guilty of a similar error in its factory output data. Till it corrected the number pertaining to capital goods output, analysts were left scrambling . . . → Read More: Be skeptical. Be very skeptical.
I was at a money changer in London and saw a tariff card, for purchase and sale of a few currencies (all to the GBP). (This was a while ago: It was on 12 May 2011).
This makes you think: What countries land up in this display, and how bad are the spreads?
Let’s . . . → Read More: Watching markets work: Spreads at a money changer
The INR/USD rate is now nudging Rs.50 to the dollar. This is a big move over a short period: a depreciation of 12.1 per cent over the 84 days from 1 July till 23 September.
What fluctuations of the INR/USD can we reasonably expect?
After the rupee became a float, so far, it has . . . → Read More: What in the world is happening to the rupee?
The Swiss National Bank press release: “The current massive overvaluation of the Swiss franc poses an acute threat to the Swiss economy and carries the risk of a deflationary development.” The Fofarian rephrase: “Too many people are trying to store value in our currency, which is distorting it’s role as a medium of exchange. We’d rather . . . → Read More: A Fofoarain Take on the Swiss Move
One of the stories that caught my attention this week was the Bloomberg piece about how banks in London and New York are starting to jump ship on the old finance hubs due to fear of effects from planned regulatory tightening.
Banks in Europe are exploring ways to cut costs by routing . . . → Read More: Random Shots – No Light at the End of the Tunnel?