China is aiming to overthrow the U.S. dollar as the currency of choice for the oil market, a move that could have far-reaching consequences. Beijing hopes to challenge the dollar by setting up a futures market with its own currency, the yuan. To that end, reports indicate that China is set to ...Read More »
The currency market is typically controlled by the U.S. dollar. One strategist believes that control will shift from the U.S. dollar to a cross asset correlation. This change in the currency markets will help riskier assets such as the Australian dollar. For years currency market movements have been dominated by ...Read More »
London traded nearly twice as much currency than did New York according the latest data on foreign exchange markets provided by the Bank for International Settlements. The daily average total turnover in foreign currency traded in London was $2.426BN in April 2016. This is nearly double the size of trade ...Read More »
Former Barclays trader Christopher Ashton, 42, is being fined £920,000 He was part of a group of dealers who called themselves the Cartel They used internet chatrooms to fix currency prices and share information A former Barclays trader is being fined £920,000 by US authorities over his part in ...Read More »
The Bank of England decided not to cut rates in a move that surprised many and boosted the pound. However, it kept us waiting for the next decision, just three weeks away. Here are three reactions: Here is their view, courtesy of eFXnews: BoE On Hold As We Expected; Paving The Way To An August Rate [...]Read More »
A mixed jobs report from Canada: the nation lost 0.7K jobs instead of gaining ones. However, the unemployment rate dropped to 6.8%. The participation rate slides to 65.5%, and that explains the drop in the unemployment rate. All in all, a slightly disappointing publication from Ottawa. USD/CAD is at 1.3030, up, but that’s mostly because of the great [...]Read More »
According to an article from Nikkei, the Bank of Japan set funds aside for the first time in order to prepare for losses from its purchase program that could take place once the easing program ends in the future.
Key Quotes from the article:
“The Bank of Japan likely set aside funds for the first time to prepare for losses on its huge holdings of Japanese government bonds should the central bank end its monetary easing policy in the future.”
“The bank is thought to have reserved about 450 billion yen ($4.07 billion) for the year ended in March. The amount will become known when the BOJ releases financial statements as early as next week.”
“Though BOJ Gov. Haruhiko Kuroda has indicated that the bank could expand easing if it faces difficulty achieving its inflation target, the creation of the reserves is a move to prepare for an exit from monetary easing.”
“The BOJ pays most of its net income to the government, and this payment will decline if the bank sets aside reserves. Furthermore, the central bank's profits have suffered from the lower value of foreign-currency assets due to a stronger yen. As a result, payments to the government are estimated at 400 billion yen for fiscal 2015, down sharply from 756.7 billion yen in the prior year.”
For more information, read our latest forex news.
Analysts from Lloyds Bank point out that next week main events in the United Kingdom will be the testimony of Mark Carney on Tuesday and the second reading of Q1 GDP on Thursday.
“In the UK, Bank of England Governor Carney (Tue) will appear before the Treasury Select Committee to answer questions on the latest Inflation Report. He will no doubt face questions about the economic forecasts, including his views on the potential risks surrounding the EU referendum.”
“Data wise, we expect the second estimate of UK Q1 GDP (Thu) to be unrevised at 0.4%q/q, though there will be the first expenditure breakdown of the figures which should show consumer spending remaining firm and a rebound in investment after the contraction in Q4.”
“The GfK consumer confidence index (Fri) will provide a more up-to-date indicator of sentiment in the current quarter. The index fell to a 16-month low of -3 in April, though we look for stabilisation at the current level in May. BBA figures on house purchase loans (Thu) will also be watched to gauge the impact of the Chancellor’s stamp duty levy on second homes which began in April.”
For more information, read our latest forex news.
Weak oil prices pose a threat to Gulf Arab states’ currency pegs against the dollar, but the energy-rich region is unlikely to abandon the policy yet, analysts say. Bahrain, Oman, Qatar, Saudi Arabia and the United Arab Emirates all keep the values of their currencies fixed against the greenback, while ...Read More »
The People’s Bank of China withdrew 840 billion yuan ($129 billion) from the country’s financial system in five days through Friday, its biggest weekly withdrawal since February 2013, according to data compiled by Bloomberg. PBOC was mopping up excess liquidity infused in the market by the central bank’s decision to ...Read More »