Gold as a Weapon in the Currency War: Chris Mancini

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

Rupee and Real futures at ICE

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

China’s Currency Holdings

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

RBI reaches for capital controls

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

The rupee: Frequently asked questions

q: How big is the market for the rupee?

The rupee is now a big market. Summing across both spot and derivatives, perhaps $30 billion a day of onshore trading and $40 billion of offshore trading takes place. Both these markets are tightly linked by arbitrage. In other words, for all practical purposes, it’s . . . → Read More: The rupee: Frequently asked questions

How to decontrol the price of oil

We know a lot about price controls from the field of exchange rates. Here’s an argument from way back, in 1998:

When change comes to a stabilised currency, as it must, that change is painful. Change in the long term is inevitable. The random walk doles out a little change every day, which is . . . → Read More: How to decontrol the price of oil

Watching markets work: Spreads at a money changer

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

What in the world is happening to the rupee?

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?

India is losing the market for trading the Indian rupee

The recent order by the Competition Commission of India on NSE and MCX-SX has a bunch of difficulties based on a lack of understanding of new age industries where a pricing of zero is quite feasible and important, a focus on protecting a competitor instead of upholding competition, etc. I wrote about this in . . . → Read More: India is losing the market for trading the Indian rupee