Global stocks fall as Euro hits new 20-year low

NEW YORK, United States - Global stocks were down Tuesday as the euro dove to a new two-decade low against the dollar and traders waited nervously for news on the next US interest rate hikes.

The single currency tumbled to $0.9901, but later clawed back losses as the greenback was hit by poor US economic data.

The dollar had strengthened this week against other currencies ahead of a speech Friday by US Federal Reserve chief Jerome Powell, as markets speculate that the central bank will continue tighten its monetary policy.

Higher interest rates boost the American currency as they make dollar-denominated debt more attractive to investors.

But the euro also has been weighed down by a gloomy outlook for the eurozone economy as Russia's war in Ukraine has sent energy prices soaring.

The unit plunged below parity with the dollar Monday on recession fears to plumb the lowest levels since 2002, when it first came into physical circulation.

In the latest blow, S&P Global's closely watched monthly composite purchasing managers' index (PMI) showed that eurozone economic activity fell for the second month in a row in August.

'Investors are bracing' 

Wall Street indices ended mostly lower, with the Dow Jones falling 0.5 percent.

With the Jackson Hole central banking symposium this week, the focus is on what Fed chief Powell says about plans to tackle high prices, with many fearing officials could send the economy into recession.

"I think that investors are bracing for some hawkish commentary from Fed chair Powell this coming week," said Jack Ablin of Cresset Capital.

European equities and Asian markets also slid amid stubborn worries about the Fed's movements.

US natural gas prices meanwhile hit a fresh 14-year high on Tuesday at $10.028.

But across the Atlantic, European natural gas prices fell, although they remain elevated on fears of a halt to Russia's gas deliveries. The Dutch TTF Gas Futures contract stood at 268.45 euros down from Monday.

Gas had spiked to record peaks in March after key producer Russia launched its invasion of neighboring Ukraine.

That has sparked surging domestic energy bills, fueling decades-high inflation that has prompted tighter monetary policy around the world.

Moscow's maneuvers have hit the single currency hard because the bloc relies heavily on imported Russian gas, said Societe Generale analyst Kit Juckes. 

Fears increased after Russia's Gazprom said Friday the Nord Stream pipeline would be closed for maintenance at the end of the month, cutting Europe's crucial gas deliveries.

"The euro's problem is... the threat from continued squeezing of gas supplies and the cost of replacing Russian gas," Juckes said.

Oil prices -- which have fallen for weeks as recession worries hit demand expectations -- rebounded after Saudi Arabia suggested OPEC and other major producers could cut output citing "volatility" in crude markets.

Key figures at around 2030 GMT

New York - Dow: DOWN 0.5 percent at 32,909.59 points (close)

New York - S&P 500: DOWN 0.2 percent at 4,128.73 (close)

New York - Nasdaq: UNCH at 12,381.30 (close)

EURO STOXX 50: DOWN 0.2 percent at 3,652.52 (close)

London - FTSE 100: DOWN 0.6 percent at 7,488.11 (close)

Frankfurt - DAX: DOWN 0.3 percent at 13,194.23 (close)

Paris - CAC 40: DOWN 0.3 percent at 6,362.02 (close)

Tokyo - Nikkei 225: DOWN 1.2 percent at 28,452.75 (close)

Hong Kong - Hang Seng Index: DOWN 0.8 percent at 19,503.25 (close)

Shanghai - Composite: DOWN 0.1 percent at 3,276.22 (close)

Euro/dollar: UP at $0.9973 from $0.9943 Monday

Pound/dollar: UP at $1.1835 from $1.1767

Euro/pound DOWN at 84.25 pence from 84.98 pence

Dollar/yen: DOWN at 136.7710 yen from 137.48 yen

West Texas Intermediate: UP 3.7 percent at $93.74 per barrel

Brent North Sea crude: UP 3.9 percent at $100.22

Agence France-Presse

Indian rupee breaches 80 per dollar, hits new record low

MUMBAI - The Indian rupee fell to more than 80 per US dollar for the first time on record Tuesday, as the greenback extended its rally and foreign capital outflows intensified.

The rupee 80.0600 against the greenback soon after trading started, Bloomberg data showed.

High inflation and rising interest rates in the United States coupled with fears of an impending recession in the world's biggest economy have fuelled a broad dollar rally in recent weeks as investors turn increasingly risk-averse.

Tighter US monetary policy has exacerbated outflows from emerging markets such as India, where foreign investors have withdrawn a net $30.8 billion in debt and equity this year.

Data released last week showed US consumer price inflation hit a fresh four-decade high in June, exceeding market forecasts and stoking expectations of another large Federal Reserve rate hike next week.

In a written statement to the Indian parliament on Monday, finance minister Nirmala Sitharaman attributed the rupee's sharp fall to external reasons.

"Global factors such as the Russia-Ukraine conflict, soaring crude oil prices and tightening of global financial conditions are the major reasons for the weakening of the Indian Rupee against the US dollar," she said.

At the same time, the Indian currency has strengthened against the British pound, the Japanese yen and the euro in 2022 so far, Sitharaman added.

But higher crude prices have resulted in a deteriorating trade balance in a country that imports 80 percent of its oil needs.

India's merchandise trade deficit widened to a record $26.18 billion in June, official data showed last week, largely because of higher crude and coal import prices.

In its monthly economic review, the Ministry of Finance said costlier imports could widen the current account deficit and cause the rupee to depreciate further.

Consumer price inflation in India, the world's sixth-largest economy, cooled off slightly to 7.01 percent in June after hitting an eight-year high of 7.79 percent in April.

But price rises have persisted well above the central bank's two-to-six percent target range despite consecutive interest rate hikes in May and June.

The central bank has also sold more than $34 billion of its foreign currency reserves in an effort to stabilize the rupee.

Agence France-Presse

Global equities rout deepens as US sets crosshairs on yuan

TOKYO - Global stocks extended already substantial losses on Tuesday, after Washington tagged China a currency manipulator, shaking fragile investor sentiment in a rapid escalation of the US-China trade war.

Safe-haven assets, including bonds and some currencies such as the yen and Swiss franc, benefited as investors scurried to avoid risk.

In early European trade, the pan-region Euro Stoxx 50 futures were down 0.2 percent, German DAX futures slipped 0.15 percent and Britain's FTSE futures lost 0.4 percent.

US Treasury Secretary Steven Mnuchin said on Monday the government had determined that China is manipulating its currency, and that Washington would engage the International Monetary Fund to eliminate unfair competition from Beijing.

"Officially labeling China a currency manipulator gives the United States a legitimate reason to take even more steps," said Norihiro Fujito, senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

"The markets are now scrambling to factor in the possibility of the United States imposing not only an additional 10 percent of tariffs on Chinese imports, but the figure being raised to 25 percent. This is likely to be a protracted trade war without a quick resolution."

US President Donald Trump vowed last week to impose a 10 percent tariff on $300 billion of Chinese imports from Sept. 1, adding that it can be raised beyond 25 percent. Some economists reckon the global economy could slip into recession in the coming months if the tariff is increased to 25 percent.

The Trump administration's dramatic move against China hastened the risk aversion seen in global markets this week. On Monday, China let the yuan slide in response to the latest US tariffs, which are expected to further aggravate trade tensions between the world's two largest economies.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.75 percent after brushing its lowest since January. It has lost 3.7 percent so far this week.

The Shanghai Composite Index retreated 1.4 percent.

Japan's Nikkei shed 0.7 percent, Australian stocks fell 2.3 percent and South Korea's KOSPI slid 0.9 percent.

"Hedge funds and other speculators who have bet on stocks have not finished closing down their positions yet. There will likely be another wave of selling in stocks," said Masanori Takada, cross asset strategist at Nomura Securities.

"The sudden surge in volatility is likely to prompt risk parity players to pull out possibly up to $20 billion from global stocks and buy bonds."

YUAN'S SLIDE STALLS

The onshore Chinese yuan fell to an 11-year low early on Tuesday, brushing 7.0699 per dollar.

In a symbolic move, Beijing let the yuan breach 7-per-dollar on Monday for the first time since late 2008. But the Chinese central bank's mid-point fixing on Tuesday of 6.9683 was firmer than market expectations, and the yuan's retreat slowed.

China's offshore yuan stretched the previous day's slide, and briefly weakened to 7.1382, the lowest since international trading in the Chinese currency began in 2010. But it pulled back to 7.0469 after Beijing's firmer-than-expected yuan fixing on Tuesday.

The Japanese yen, a perceived safe-haven in times of market turmoil and political tensions, touched a seven-month high of 105.520 per dollar before dropping back to 106.700 in volatile trade.

The Swiss franc, another currency sought in times of turmoil, has gained roughly 1 percent against the dollar this week. It set a six-week peak of 0.9700 franc per dollar.

Investor demand for other safe-havens such government bonds also remained high as risk aversion gathered momentum.

The 10-year US Treasury yield extended sharp falls overnight and declined to 1.672 percent, its lowest since October 2016.

Japan's 10-year yield fell to a three-year trough of minus 0.215 percent.

Brent crude oil futures plumbed a seven-month low of $59.07 per barrel as the trade war raised concerns about lower demand for commodities. Brent last traded at $60.41 for a gain of 1 percent as bargain hunting kicked in.

Spot gold advanced to a six-year peak of $1,474.80 an ounce as investors sought the safety of the precious metal.

source: news.abs-cbn.com

US designates China as a 'currency manipulator'

WASHINGTON - The United States on Monday formally named China a currency manipulator, accusing Beijing of weakening the yuan as the two countries' trade war escalates.

The move came as China earlier on Monday allowed its currency to fall to its weakest levels against the dollar in almost a decade, prompting irate Twitter outbursts from US President Donald Trump and sending global equities markets diving into the red.

Treasury Secretary Steven Mnuchin "under the auspices of President Trump, has today determined that China is a currency manipulator," the US Treasury Department said in a statement.

The yuan fell below 7 to the dollar on Monday, days after Trump announced plans to raise tariffs on another $300 billion in Chinese imports, while accusing Beijing of failing to live up to commitments in negotiations to end the two nation's year-long trade war.

The move marked a sudden change of US policy.

Trump had campaigned on a pledge to designate China a currency manipulator, but since he took office the Treasury had refrained from doing so -- until Monday.

As a result, Mnuchin will engage the International Monetary Fund "to eliminate the unfair competitive advantage created by China's latest actions," the Treasury said.

In its most recent report, the department had kept China on a "monitoring list" of countries subject to close scrutiny due to their currency practices.

dg/cs

source: news.abs-cbn.com

ECB move sends stocks lower; dollar climbs

NEW YORK - A gauge of global stock markets stumbled on Thursday while the US dollar rose, as the European Central Bank postponed interest rate hikes to 2020 and launched a new round of cheap loans to banks in an effort to spark the euro zone economy.

Equities had drifted lower over the past several sessions before the session's sharp drop, sparked by the ECB's change of direction just months after it wound down its massive quantitative easing program.

The ECB's move puts it in sync with other central banks around the world that have been taking a dovish tack, including the Bank of Canada earlier this week. The ECB also cut its growth and inflation estimates for 2019 as well as those for 2020 and 2021, raising alarm bells for investors once again over global growth.

"On the one hand, dovish talk could be bullish. On the other hand, maybe it is indicating just how slow things are over there," said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.

"You wonder how long can the US be the only horse dragging this global economy forward," Carlson said. "The news on the ECB obviously points to, maybe you’re not going to get much help from Europe."

The growth concerns weighed on banking shares in the United States, which helped push the benchmark S&P 500 index to its lowest close since Feb. 14.

The Dow Jones Industrial Average fell 200.23 points, or 0.78 percent, to 25,473.23, the S&P 500 lost 22.52 points, or 0.81 percent, to 2,748.93 and the Nasdaq Composite dropped 84.46 points, or 1.13 percent, to 7,421.46.

MSCI's gauge of stocks across the globe shed 0.99 percent. MSCI's index was below its 200-day moving average for the first time since mid-February and set for its fourth straight day of losses, the longest streak this year.

Stocks in Europe were whipsawed by the ECB action, falling from 5-month highs and closing lower as European banks tumbled more than 3 percent.

The pan-European STOXX 600 index lost 0.43 percent.

The euro weakened to a low of 1.1204, its lowest since June 2017, and the dollar rose as high as 97.71 against a basket of major currencies.

The dollar index rose 0.85 percent, with the euro down 1.1 percent to $1.1181.

The global growth worries overshadowed generally solid economic data on the US labor market and worker productivity. Non-farm payrolls data will be released on Friday.

The ECB move also sent prices on US Treasury bonds higher, with 10-year yields hitting their lowest in a week at 2.636 percent.

Benchmark 10-year notes last rose 14/32 in price to yield 2.6429 percent, from 2.692 percent late on Wednesday.

Oil prices were higher as OPEC-led supply cuts and US sanctions against exporters Venezuela and Iran although gains were limited by record US crude output and demand growth worries.

US crude settled up 0.78 percent at $56.66 per barrel and Brent was last at $66.30, up 0.47 percent on the day.

source: news.abs-cbn.com

Safe haven support keeps dollar near 19-month high on growth risks

SINGAPORE - The dollar held near a 19-month high on Monday, bolstered by safe-haven buying as heightened concerns of a global economic slowdown reduced appetite for riskier assets such as stocks and Asian currencies.

Weaker-than-expected economic data out of China and Europe and fears of a possible US government shut down spooked investors away from stocks toward safe haven assets such as the greenback and yen.

"The dollar is clearly showing it is attractive during times of market stress," said Ray Attrill, head of currency strategy at NAB.

The dollar index, which gauges its value versus 6 major peers, was little changed at 97.44, below the 19-month high of 97.71 it hit on Friday.

The Australian dollar, whose fortunes are closely tied to China's economy, was marginally lower at $0.7174. It lost 0.3 percent of its value last week as data showed Chinese November retail sales grew at the weakest pace since 2003 and industrial output rose the least in nearly three years, underlining risks to the economy.

The offshore Chinese yuan was flat at 6.9013.

Apart from fears of a global economic slowdown, markets are also focusing on the future trajectory of US monetary policy.

The Federal Reserve is set to raise interest rates by 25 basis points at its Dec. 18-19 meeting. The central bank has lifted rates eight times since December 2015 in a bid to restore policy to more normal settings after having slashed borrowing costs to near zero to combat the financial crisis a decade ago.

With the December hike largely factored in by the market, larger moves in the dollar will be guided by the Fed's forward guidance.

According to their latest projections in September, the median view among the Fed's policymakers was for three rate hikes in 2019. However, interest rate futures used to gauge the probability of further hikes are pricing in only one rate hike in 2019.

Traders believe that higher US borrowing costs will likely hurt US growth momentum and ultimately force the Fed to pause its monetary tightening path.

Recent comments by Fed officials have also been read as dovish by some analysts. Last month, Fed Chairman Jerome Powell said rates were near the range of policymakers' estimates of "neutral" - the level at which they neither stimulate nor impede the economy

"The Fed will most likely move from an auto-pilot mode to being data dependent," added Attrill.

The yen was flat in early Asian trade at 113.36 to the dollar. It strengthened against the euro and sterling last week, reflecting the risk-off mood in the financial markets.

The euro was also little changed at $1.1304, having lost 0.6 percent last week after weaker-than expected data out of France and Germany suggested that economic activity in Europe remains weak.

Sterling remained under pressure in Asian trade, down 0.02 percent at $1.2582. British trade minister Liam Fox said on Sunday talks with the European Union to secure "assurances" for parliament on Prime Minister Theresa May's Brexit deal will take time, with a decision expected in the New Year.

source: news.abs-cbn.com

Dollar hits 16-month lows vs yen as trade, political woes take their toll

TOKYO - The dollar slipped to a 16-month low against the Japanese yen on Monday, pressured by lingering fears of a global trade war and caution towards political developments in Tokyo.

The US currency traded at 104.835 yen after falling to 104.560, its weakest since November 2016.

The dollar had already slumped 1.2 percent versus its Japanese peer last week as escalating trade tensions between the United States and China stoked concerns about global growth.

Global markets were shaken after US President Donald Trump moved to impose tariffs on Chinese goods, edging the world's 2 largest economies closer to a trade war.

Views that Japan's political scandal could deepen was also seen lifting the yen, with a key figure in a cronyism scandal gripping Prime Minister Shinzo Abe due to testify in parliament on Tuesday..

Economic measures dubbed "Abenomics" initiated by Abe has been a factor that has pulled the yen down over the past few years to the benefit of exporters. Any event that leads to a decline in the premier's support ratings is seen weakening his ability to keep Abenomics in place.

"With worries about the United States and China locking horns on trade issues and Japan's parliamentary testimony coming up on Tuesday, few participants are willing to buy the dollar," said Yukio Ishizuki, senior currency strategist at Daiwa Securities.

"It really is typical 'risk off' trades dominating right now, with the yen and Swiss franc the big beneficiaries. But more speculators are jumping in, and any reversals could be sudden and violent."

The Swiss franc was little changed at 0.9467 franc per dollar after gaining 0.55 percent against the greenback last week.

The euro edged higher at $1.2364 after rising 0.5 percent last week.

The dollar index against a basket of 6 major currencies was steady at 89.453 and in close reach of a one-month low of 89.356 set last week.

The Australian dollar added 0.3 percent to $0.7714 and the New Zealand dollar gained 0.35 percent to $0.7250.

source: news.abs-cbn.com

Dollar struggles after Tillerson's dismissal strikes down recovery

TOKYO - The dollar wallowed against the yen and other major currencies on Wednesday after the sudden dismissal of US Secretary of State Rex Tillerson killed off an earlier bounce in the currency.

US President Donald Trump fired Tillerson on Tuesday after a series of public rifts over policy on North Korea, Russia and Iran, replacing his chief diplomat with loyalist CIA Director Mike Pompeo.

It was deja vu for the currency market and the dollar, which had declined a week ago when the exit of White House economic advisor Gary Cohn undermined investor sentiment towards the greenback.

The dollar was down 0.1 percent at 106.490 yen, having slipped overnight from a 2-week high of 107.300 reached after wariness over a political scandal in Japan waned slightly.

The greenback also lost a bit of traction after the February US inflation data released on Tuesday was in line with expectations, suggesting the Federal Reserve remained on track to raise interest rates at a gradual pace.

Masafumi Yamamoto, chief forex strategist at Mizuho Securities in Tokyo, said comings and goings in the White House were becoming something of an everyday occurrence and that dollar's reaction was likely to become more limited each time.

"For the dollar to rise above 107 yen again, it may need a clarification of the ongoing political scandal in Japan in addition to a hint by the Fed at this month's meeting that it might accelerate the pace of rate hikes," Yamamoto said.

The yen had risen against the dollar at the start of the week as a political scandal engulfed Japanese Prime Minister Shinzo Abe and his close ally, Finance Minister Taro Aso.

The Japanese currency advanced as the cronyism scandal raised doubts about Abe's ability to continue pursuing his economic policies, dubbed "Abenomics," which included aggressive monetary easing.

The Fed holds a 2-day policy meeting starting on March 20 and the central bank is widely expected to raise interest rates for the first time this year.

The dollar index against a basket of six major currencies was little changed at 89.711 after it tracked a decline in US yields and shed 0.25 percent on Tuesday.

The euro was steady at $1.2394 after rising 0.45 percent overnight.

The pound was up 0.1 percent at $1.3982 and in close reach of a two-week peak of $1.3994 scaled on Tuesday on the back of the dollar's broad decline.

The Australian dollar was steady at $0.7860 after bouncing to a 2-week high of $0.7898 the previous day on robust business indicators.

source: news.abs-cbn.com

HSBC in $100 million forex fraud settlement

NEW YORK - British financial giant HSBC has agreed to pay more than $100 million to US authorities after admitting to defrauding clients during multi-billion-dollar foreign exchange transactions, the Justice Department said Thursday.

The settlement follows an indictment handed down Wednesday against a former Barclays trader similarly accused of defrauding the former California computing giant Hewlett-Packard by manipulating foreign exchange markets.

Under the terms of the agreement, which is under review by a federal judge in Brooklyn, HSBC will pay a $63.1 million fine and an additional $38.4 million in restitution and disgorgement -- or the return of ill-gotten gains, the Justice Department said.

"HSBC's admissions in connection with this resolution confirm that the company misused confidential client information for its own profit on more than one occasion," John Cronan, the acting head of the department's criminal division, said in a statement.

"This sort of misconduct not only harmed their clients, costing the victims money, but it also ran a serious risk of undermining the public's confidence in our financial markets."

Prosecutors say that in 2010 and 2011, traders on HSBC's foreign exchange desk used confidential client information to conduct trades in British currency that deliberately drove the price of sterling in a direction benefitting the bank and harming the clients.

US officials only identified one of the two clients: the British oil and gas explorer Cairn Energy.

HSBC has agreed to continue cooperating with investigators and foreign authorities in any related investigations, including cases brought against individuals and to enhance its internal safeguards against misconduct.

The Justice Department said HSBC received no leniency for voluntarily disclosing the matter, adding that initially the bank's cooperation with investigators was also "deficient in certain respects."

But that HSBC soon "changed course" after prodding from the government, earning "substantial cooperation credit."

The bank faces charges of wire fraud but these are likely to be dropped once HSBC fulfills its obligations under the settlement.

Thursday's settlement comes barely a month after the lapse of a landmark 5-year, $1.9-billion deal between US authorities and HSBC in which the British lender avoided prosecution after admitting in 2012 to widespread money-laundering and sanctions violations.

In October, HSBC's former head of foreign exchange cash trading, Mark Johnson, was convicted of 8 counts of conspiracy and one count of wire fraud after a four-week trial. He is due to be sentenced next month.

HSBC was one of 6 major US and European banks that were fined a total $4.2 billion by global regulators in a November 2014 crackdown for attempted manipulation of the foreign exchange market.

source: news.abs-cbn.com

U.S. dollar heads for worst year since 2003

NEW YORK - The dollar fell to its lowest in over three months against a basket of major currencies on Friday, on track for its biggest annual drop since 2003, on doubts over durability of a pickup in U.S. economic growth in wake of last week's tax overhaul.

One of the most dramatic market developments in 2017 was the breath-taking rise of bitcoin and other cryptocurrencies. While they have pulled back at year-end, many of these digital currencies have surged in value this year.

The greenback may lag further against its peers in 2018 as investors expected other major central banks to reduce their stimulus while the Federal Reserve has signaled it would raise interest rates further, analysts said.

"The dollar will face more headwinds in 2018," said Chris Gaffney, president of Everbank in St. Louis, Missouri. "The Fed won't be going at it alone in terms of taking off more gas from the stimulus pedal."

Bets the European Central Bank might consider raising interest rates by the end of 2018 due to evidence of higher inflation and business activity in the euro have lifted the euro, which was poised for its best yearly performance versus the greenback in 14 years.

The euro hit a three-month peak at $1.2013, bringing its annual gain to 14.1 percent. It was last up 0.68 percent at $1.2022.

Euro's rally was a drag on the greenback in 2017. The index that tracks the dollar versus the euro and five other major currencies fell as low as 92.169, which the lowest since Sept. 22. It was on track for its steepest annual decline since 2003.

The dollar also weakened against the yen, sterling, Canadian dollar, Swedish krona and Swiss franc, which are the other index components this year.

The dollar index at a 14-year peak at the start of 2017 on hopes for U.S. President Donald Trump's pro-growth economic agenda. Barring the most dramatic rewrite of the U.S. tax code in 20 years enacted last week, Trump and Republican lawmakers have struggled to pass legislation.

Furthermore, many institutional investors close their books at the year-end, a deadline for taxation and performance reporting, a time seen leading to dollar selling pressure, analysts said.

Outside of traditional currencies, bitcoin and other cryptocurrencies rebounded after two days of losses tied partly to more regulators toughening rules on digital currencies in a bid to curb excessive speculation.

Bitcoin was last up 1.13 percent at $14,599.99 on the Bitstamp exchange. It was off the record highs near $20,000 touched 12 days ago but still headed for a gain of roughly 1,400 percent in 2017.

Financial markets around the world will be closed on Monday on New Year's Day.

source: news.abs-cbn.com

Dollar posts biggest quarterly drop in nearly seven years

NEW YORK - The US dollar recovered slightly on Friday, but posted its biggest quarterly decline against a basket of rival currencies in nearly seven years after hawkish signals from foreign central banks this week pressured the greenback further.

Investors have ramped-up expectations for tighter monetary policy from the European Central Bank, Bank of England and Bank of Canada after hints from officials this week.

This has made the greenback less attractive, in addition to skepticism that the Federal Reserve would be able to raise interest rates again this year given a recent batch of weak US economic data and doubts that US President Donald Trump could enact his pro-growth agenda.

The US dollar index, which measures the greenback against a basket of six major currencies, declined about 4.6 .DXY percent for the second quarter to mark its steepest quarterly percentage drop since the third quarter of 2010.

The euro accelerated more than 7 percent against the greenback for its biggest quarterly percentage gain since the third quarter of 2010. The euro racked up about 2 percent of its gains and the dollar index posted about 1.6 percent of its losses this week alone. The dollar gained about 1 percent against the Japanese yen over the quarter.

"What really gave the hawkish central banks extra punch was how it seemed to be a coordinated effort to signal a shift away from low-rate policies," said Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington.

He said improving economic growth in Europe and Canada opened the door for those comments and was "a reality check how the US isn't standing head and shoulders above everyone else."

The dollar index was last up 0.1 percent at 95.704, while the euro was down 0.2 percent against the dollar at $1.1416. The euro touched its strongest in nearly 14 months on Thursday, at $1.1445, while the dollar index touched a roughly nine-month low of 95.470 early Friday.

Analysts said Friday's bounce for the dollar came as some traders likely took profits on gains in the euro as well as the sterling. The dollar fell against the Canadian dollar, however, and was last at C$1.2971 after touching a nearly 10-month low of C$1.2948 earlier.

"It appears as though the euro and the pound could be testing some resistance levels, and that could also contribute to ... the profit-taking," said Eric Viloria, currency strategist at Wells Fargo Securities in New York.

(Reporting by Sam Forgione, additional reporting by Patrick Graham in London; Editing by Richard Chang)

source: news.abs-cbn.com

Markets welcome G20's foreign exchange stance, wary on trade split

LONDON - Financial leaders from the world's biggest economies found common ground on foreign exchange at a G20 meeting on Saturday but failed to agree on trade, highlighting a global shift towards protectionism and setting a cautious tone for financial markets this week.

The Group of 20 powers meeting in the German spa town of Baden-Baden reiterated their long-standing warnings against competitive devaluations and disorderly FX markets, allaying fears that the new US administration might have opened up a chink in the G20's united front on global currency policy.

For markets, no change to G20's stance on FX is welcome news. Having the world's financial and economic powers on the same page should help keep FX volatility low, a cornerstone for stable markets and rising asset prices more broadly.

But failure to agree on a commitment to keep global trade free and open will have negative consequences for financial markets, even if not dramatically so immediately.

"We may open on Monday with modest dollar weakness thanks to the failure to agree on trade, but it would have been a lot worse if there were major changes to the FX language on top of that," Tim Graf, managing director and head of macro strategy EMEA at State Street in London, said.

The dollar has slipped recently even though the Federal Reserve has raised US interest rates, because longer-term bond US yields have eased back. The dollar had its biggest weekly fall for two months last week.

Similarly, the upward momentum on Wall Street has fizzled out this month after a string of record highs, although European markets have continued to advance.

The pullback in longer-term yields despite a rise in shorter-term yields suggests investors think growth and inflation are not strong enough for the Fed to lift rates much further. This so-called "flattening" of the yield curve has weighed on stocks and the dollar.

An initial draft of the G20 communique earlier this month had removed almost all of the boilerplate language on FX from previous communiques. It had removed warnings against "excess volatility" and "disorderly" FX moves as well as a pledge to refrain from "competitive devaluations".

They were all reinstated.

G20 and G7 communiques have long stated that stable and strong growth is best fostered by stable and calm currency markets.

The level of implied volatility in the euro/dollar exchange rate over the next month fell last week to 6.075 percent , its lowest in two and a half years. One-month dollar/yen implied volatility hit its lowest in over a year.

According to economists at JP Morgan, one of the main reasons for the depressed volatility across financial markets currently is because volatility in global growth is now the lowest in at least half a century.

FREE TRADE

Yet one sentence from last year's G20 communique - the shortest and one of the most important - was omitted: "We will resist all forms of protectionism."

This points to a fundamental disagreement between the U.S. administration and the other 19 participants, particularly the Europeans, who flatly rejected any form of protectionism.

US Treasury secretary Steven Mnuchin said that the previous communique was not necessarily relevant to the current global economic climate from his point of view. He said he favored "free" trade but some agreements might need to be renegotiated.

Yet despite the isolationist and anti-globalization rhetoric from the US administration, the implementation of protectionist policies and reality of trade wars are not immediate concerns, analysts say.

"This G20 is not really a big deal for the market, partly because the language on FX was maintained," Kenneth Broux, head of corporate research, FX and rates at Societe Generale, said.

"The disagreement on trade and protectionism is new, but the meeting at a later date between US President Donald Trump and Chinese premier Li could be more pertinent to where trade negotiations are headed," Broux said.

Washington may have signed up to the language on FX, but it is widely believed that it wants a weaker exchange rate. It blames the persistent US trade deficit, manufacturing decline and lack of competitiveness on the dollar's strength.

In January a closely-watched measure of the dollar's trade-weighted value hit a 14-year high. President Trump and some of his key advisors have accused Germany, Japan and China - three of America's biggest trading partners - of exploiting weak exchange rates to their competitive advantage.

Some analysts warn that the US administration will soon bring exchange rates back to the top of its economic policy agenda.

"The U.S. administration's team is not yet in place, so its ​​foreign exchange policy is not yet settled. The signs don't look good ... and we need to be wary of discussions inside the US administration as well as remarks by its key people," Tsuyoshi Ueno, senior economist at NLI Research Institute, said.

source: news.abs-cbn.com

China's forex reserves fall to 5-year low in September

BEIJING - China's mountain of foreign exchange reserves dropped around $19 billion in September to a five-year low, government data showed, with the central bank spending heavily to defend its currency against capital outflows.

The world's largest currency hoard fell to under $3.17 trillion, the People's Bank of China (PBOC) said on its website Friday, below median analyst forecasts of $3.18 trillion in a Bloomberg News survey.

It was the third straight month of declines and brought China's reserves to their lowest level since April 2011, Bloomberg said.

Analysts said the decline indicated China was selling foreign exchange to buy its yuan currency amid capital flight spurred by slowing growth in the world's second largest economy.

The data came days after the yuan's official entry into the International Monetary Fund's elite SDR basket of currencies, a symbolic coup for Beijing policymakers who are seeking to expand international use of the currency.

In the months preceding the currency's formal inclusion, China's central bank spent "heavily" to keep the yuan's value stable, roughly $27 billion last month, said Julian Evans-Pritchard of Capital Economics.

But "with the inclusion of the renminbi in the SDR basket now complete, the PBOC may no longer feel the need to intervene as heavily to counter capital outflows", he said, adding that US Federal Reserve rate hikes could increase depreciation pressure on the yuan in coming months.

source: www.abs-cbnnews.com

Dollar rises following Yellen remarks on rate hikes

NEW YORK -- The dollar rose Friday against the euro, the yen and the British pound following remarks from the US central bank favoring a near-term increase in interest rates.

In a much-anticipated address, US Federal Reserve Chair Janet Yellen said the case had "strengthened" in recent months for a rate increase but did not clearly say when this could occur.

Toward 2100 GMT, the euro was at $1.1195, down from $1.1281 on Thursday while the dollar rose to 101.77 yen, up from 100.55.

The pound fell to $1.3135 from $1.3187.

Christopher Vecchio, a currency analyst at DailyFX, said Yellen's speech had given the dollar trade a needed shot in the arm on currency markets.

"The US Dollar Index, mired in an apathetic lull the past several days, is in the midst of posting its widest daily trading range of the week on the back of Chair Yellen’s commentary," said Vecchio.

US central bankers are due to meet again three times between now and the end of the year.

2100 GMT Friday Thursday

EUR/USD 1.1195 1.1281
EUR/JPY 113.94 113.43
EUR/CHF 1.0950 1.0919
EUR/GBP 0.8523 0.8555
USD/JPY 101.77 100.55
USD/CHF 0.9781 0.9680
GBP/USD 1.3135 1.3187


source: www.abs-cbnnews.com

Modern Advancements in Forex Trading

The world of forex is ever-changing. The markets move at lightning speed, and trends emerge in an instant. Fast-paced, volatile, and tempestuous, trading is a game that will always keep you on your toes.

 Like the markets it represents, forex-based technology also continually evolves. The past decades have seen the rapid emergence of wave after wave of new developments, each of them improving the way that we trade, and making everything better, faster, and more competitive.

Here, we look at just three of the ways that technology has transformed the markets….

#1: Speed

In times gone by, currency trading was a different game entirely. Without the computers and smartphones that so easily enable us to trade, every move had to be made in person through a broker, and it was a laborious process. Today, this has changed completely. Where once information was outmoded, the data on display a snapshot into a past that had already altered, trades can now be conducted in the blink of an eye, and the figures that we see are entirely contemporaneous. Take a glance at your screen and you’ll have a perfect picture of the markets. Press a button and your dreams will be made material. Everything happens in an instant.

#2: Software

Even in the last couple of years, technology has progressed at a remarkable speed. In the days of old, trading was limited to sitting in front of a specially set-up computer, and when you weren’t beside it, you couldn’t make a move. Luckily, this is no longer the case. Now, you can trade from almost any device that you desire, whether it’s your MacBook or your smartphone. Brokers like OANDA make sure that every software option you could dream of is available to you, so that you can trade whenever and wherever you wish to.

#3: Flexibility

As we briefly touched on above, this ever increasing array of software trading options has made one very dramatic difference to a lot of people: it has improved the flexibility of investing. Where once this would have been almost impossible for those who had to leave their house to work each day, now, people can fit it in whenever they have a spare moment, whether this is on the train during their morning commute, or in their office during their lunch hour. Trading can be worked around your timetable, because when you can trade anywhere and at any time, it’s entirely up to you.

With so many exciting developments already revolutionising the world of the foreign exchange, just imagine what tomorrow might bring.

source: 20smoney.com

A Guide to Forex Platforms in 2016

The Forex markets have already enjoyed headlines during this January, so many traders expect that 2016 will prove to be a fruitful year. As the majority of recent news has focused upon the state of the currency markets, it is a good idea to highlight some of the features which are set to define the most efficient electronic platforms. Appreciating these metrics will enable investors to make the most informed decisions possible.

Competitive Minimum Entry Levels

It only makes sense that entry levels are predicted to be even more competitive when compared to 2015. This primarily arises from the fact that an increasing number of online brokers are entering into the electronic world. In order to entice new investors, we should fully expect to witness some amazing minimums during the months ahead. Still, there is much more to consider than entry levels alone. What other trends have already taken shape?

A Multitude of Currency Pairs

A sizeable portion of investment analysts seem to point to an increased amount of volatility throughout the Forex markets in 2016. It still remains to be seen whether or not this observation will come to fruition. However, many astute traders will embrace a more risk-averse stance this year. One of the most effective ways to embrace such a strategy is to diversify into different currency pairs while maintaining holdings in the major players such as the dollar, the pound and the euro. More exotic positions could prove to help supersede much of this volatility. This is also an effective approach for those who are hoping to embrace both short- and long-term options.

Mobile-Friendly Service

Mobile-responsive trading platforms should become the norm during 2016 and beyond. It has been shown that no less than 63 per cent are expected to access the Internet on a daily basis through the use of their smartphone. This will obviously translate to the individual traders themselves. Such mobile capabilities can enable one to open and close positions even while away from home or the office. The majority of astute portals have implemented mobile-friendly software within their trading platforms. Some even predict that mobile access will supersede traditional computer transactions within a few years.

Substantial Customer Service Resources

The Internet has become a very interactive environment. Thus, any website needs to display excellent levels of customer service. Not only will this tend to include access to standard telephone numbers and email accounts, but other features are likely to come into play. Thankfully training software and community features are quite commonplace on platforms like CMC Markets. Quality customer service has always been seen as a hallmark of a reputable broker. This principle is predicted to become even more entrenched during 2016.

These are some very general observations which are expected to have a great deal of relevance during the upcoming year. It is always pivotal to appreciate which platforms offer these amenities. Selecting the best trading system is just as important as choosing the correct investment strategy.

source: 20smoney.com

2016: Make This Your Year To Become A Forex Pro

With increased globalisation, economies and currencies are more interdependent on each other than ever –– presenting an opportunity for investors to become savvy forex professionals. Becoming a pro forex trader will probably take some time and needs a great deal of effort, but you should not be discouraged because ups and downs are normal. The best part is that you can sit in the comfort of your home with your laptop to trade in forex and still make a ton of money. Once you get the basics right, you’ll soon realise that forex can make you a lot of money, so give it a shot in 2016 and become a forex pro with these simple steps:

Learn The Basics

If you’re new at forex trading, then learn the market before undertaking any trading. Understand the concepts of currency trading and how existing traders sell and buy currencies. You need to learn about currency trading and the currency market. Watch online videos, read articles, talk to existing forex traders to dig deeper into the forex trading industry.

Understand Trading Systems And Platforms

You must understand trading systems and platforms used to analyse currency markets for locating trade setups. As a beginner, you’ll ideally want platforms with user-friendly information and depths of information for analyzing price charts and trade setups, backed by strong support and competitive pricing. Learning and understanding these trading systems and platforms will help tune your mind to your goal of ultimately becoming a forex pro.

Start Demo Trading

You will need to practice trading with a demo account. Demo trade for at least a few months before you are ready to undertake live trading. You must build your forex confidence with demo trading before opening a live trading account with your broker or trading platform.

Begin Live Trading

If you’re confident with your demo trading, then it’s time for you to enter the real world and start live trading. It’s important to choose a good platform and broker because you’ll want access to large numbers of currency pairs and emerging market currencies. Keep in mind that you should trade with your live account in the same way as you would trade with your demo account. If you start making real money, stick to what you’ve been doing and don’t deviate because you could end up losing money eventually.

Enjoy What You Do

While the thought of handling money can be stressful to some people, it’s important that you enjoy what you do. Remember to keep your calm and treat this as impartially as you can, so that you end up making sound decisions based on facts and not emotions.

If you’re looking for a reliable online trading platform to begin your forex trading career, then check out CMC Markets to meet your every forex need. They have over 330 currency pairs that are also available for trading as CFDs.

source: 20smoney.com

3 reasons why Forex is the Most Advantageous Financial Market

When it comes to appraising the popular and unique forex market, your opinion will be shaped almost entirely by your appetite for risk. While risk-averse investors can scarcely see beyond the high levels of volatility and excessively long trading sessions, for example, those in the market for higher returns are more likely to embrace the leverage and liquidity that defines the foreign exchange. With the Bank for International Settlements reporting that forex trading generates in excess of $5.3 trillion a day, however, it would appear as though the majority of investors are willing to take a calculated risk in the quest for larger returns.


3 Reasons why Forex is the Most Advantageous financial Market

 The reason for this is that the forex market remains arguably the single most advantageous financial market in the world, and here are just some of the reasons why: –

The Low Cost of Forex Trading

 Debt comes in many forms, and all of these variations have a tangible influence on traders and investors from around the world. From nation debt (which in the UK continues to grow at a rate of £5,170 per second) to consumer liabilities, this reduces disposable income and often forces investors to seek out low-cost trading vehicles. Fortunately, forex trading is one of the most inexpensive methods of investing your money, with a far tighter spread than those applied to securities, stocks and commodities. This creates an accessible market where future profits can be easily maximised.

Benefit from Marginal Returns

 In forex trading, you are speculating on the performance of one currency in comparison with another. This type of trading is margin-based, which means that it is possible to earn far more than your initial investment and drive huge returns. While the reverse is also true (in so much that you can lose far more than you originally committed to the cause), this is where the delicate balance between risk and reward must be given careful consideration by investors. The potential gains are certainly huge, however, while traders are also helped by the presence of expert brokerage firms and the type of resources.

Profit in a Depreciating Market

 Another advantageous aspect of margin-based investments is that they relieve traders from the burden of ownership, while also enabling them to profit even in a depreciating market. Simply by taking a short-position in the market as and when rates decline, you can optimise the margin in a specific currency pair and drive huge, short-term gains. Conversely, you can assume a long position when rates begin to rise, before selling currency at a later date for more than you initially paid. This type of flexibility is unique to the forex market, and it represents the core difference of trading derivatives and fixed assets.

source: 20smoney.com

IMF gives China's currency prized reserve asset status

WASHINGTON - The International Monetary Fund admitted China's yuan into its benchmark currency basket on Monday, in a victory for Beijing's campaign for recognition as a global economic power.

The decision to add the yuan, also known as the renminbi, to the Special Drawing Rights (SDR) basket alongside the dollar, euro, pound sterling and yen, is an important milestone in China's integration into global finances and a nod to the progress it has made with reforms.

To meet the IMF's criteria, Beijing has undertaken a flurry of reforms in recent months, including better access for foreigners to Chinese currency markets, more frequent debt issuance and expanded yuan trading hours.

IMF chief Christine Lagarde, who along with in-house experts had previously given her support for the inclusion, made it clear she did not expect Beijing to stop there.

"The renminbi's inclusion in the SDR is a clear indication of the reforms that have been implemented and will continue to be implemented," she told reporters.

The People's Bank of China said the move, which was backed by countries including the United States, Britain and Japan, showed the international community expected China to play a bigger role in the world economy.

"Going forward, China will continue to deepen and accelerate economic reforms and financial opening up, and contribute to promoting world economic growth, safeguarding financial stability and improving global economic governance," it said in a statement.

The PBOC's vice governor Yi Gang said he expected the inclusion would make the yuan more stable and there was no basis for it to devalue further, as some traders had expected.

"LANDMARK RECOGNITION"

An IMF official said it was not IMF policy to disclose board voting records, but a person familiar with the IMF deliberations said approval had been unanimous.

The yuan will have a 10.92 percent share, in line with expectations, after a review of the weightings formula for the SDR that also cut the euro's share by more than 6 percentage points.

An editorial in China's official Xinhua news agency said the decision was a "landmark recognition" of China's increased role in the global economy.

"The Chinese yuan clearly deserves a place in that grouping. China is the world's second-biggest economy and top trader, and its currency is liquid and stable enough to serve as a store of value," it added.

To be included in the SDR basket, the yuan had to meet the criteria to be "freely usable", or widely used to make international payments and widely traded in foreign exchange markets, a yardstick it missed at the last review in 2010.

The yuan's inclusion from October 2016 is largely symbolic, with few immediate implications for financial markets. But it is the first time an additional currency has been added to the SDR basket, which determines which currencies countries can receive as part of IMF loans.

"Ultimately China would like to see, as a number of countries would, the dollar end its reign as the global reserve currency," said Malcolm Polley, chief investment officer at Stewart Capital Advisors.

"That won't happen until there is another currency that from a geopolitical standpoint is as secure as the dollar."

EURO MAKES ROOM

The new SDR formula gives more weight to financial variables and less to exports, reflecting long-standing criticism of the methodology but also cutting the euro's share to 30.93 percent, from 37.4 percent.

The yuan will come in with a higher weight than sterling and yen, which will drop to 8.09 percent and 8.33 percent respectively, while the dollar remains broadly unchanged at 41.73 percent.

The addition is likely to fuel demand for China's currency and for renminbi-denominated assets as central banks and foreign fund managers adjust their portfolios to reflect the yuan's new status.

Moody's Investors Service said it would give a confidence boost for investors in yuan assets and it expected more yuan-denominated bonds from non-Chinese issuers in China, and an increase in Beijing's quotas for cross-border investment channels.

But analysts said investors would nevertheless remain cautious as long as China did not fully liberalize capital controls or allow the currency to float freely.

"'Freely usable' meant freely usable to reserve managers and available to official institutions," said Steven Englander, head of G10 foreign exchange strategy at Citi in New York.

"But if you look at the normal definition of liquidity, the point is not that just you and your mates can use it but that the whole world can use it."

The IMF said China's comparatively higher interest rates would likely increase the SDR interest rate, potentially pushing up the cost of IMF loans for some borrowers. (Reporting by Krista Hughes; Additional reporting by Jason Lange and Howard Schneider in Washington and Dion Rabouin, Daniel Bases and Sam Forgione in New York; Editing by Alan Crosby and Will Waterman)

source: www.abs-cbnnews.com

So You Want to Trade Forex Online?

One of the largest complaints American tourists have when visiting Europe is the high costs of everyday items from bottles of Coke to hotel rooms.

However, Americans visiting Europe this summer will find items a little bit cheaper because of the drastic shift in the exchange rates, and not businesses lowering their prices.

During the summer 2014 months American tourists were able to exchange one American dollar for 0.75 Euros.  By summer 2015, American tourists could exchange the same American dollar but receive 0.88 Euros in exchange.

What happened?

All major currencies trade on the foreign exchange market.  The exchange market assists international trade, investments and tourisms by enabling the conversion of one currency to the other.  Fluctuations in the foreign exchange market result in changes in exchange rates.

The top eight most widely traded currencies in the world include the U.S. Dollar, Euro, Japanese Yen, Great British Pound, Swiss Franc, Canadian Dollar, Australian / New Zealand Dollar and the South African Rand.

Returning to our discussion of an American tourist visiting Europe for a vacation.  Suppose the tourist began planning his 2015 trip in 2014 and acquired 1,000 Euros it would have cost him around $1,250.  If the tourist would have waited until summer 2015, the same 1,000 Euros would have cost $1,100.

Many economists and foreign exchange experts are now predicting the Euro will reach parity with the U.S. Dollar.

How Did That Happen?

In simple terms, demand for a currency determines its values.  As we have seen in the news headlines throughout the year, various European nations (most of which use the same centralized currency, the Euro) were facing difficult economic periods.

Greece’s economic future remains a large concern as the country is stepping up efforts to reach an accord with its creditors in time to avoid a default.  Productivity and labor concerns out of Germany and France also remain a concern.

With that said, investors, banks and financial institutions (such as hedge funds) realize there is a higher degree of uncertainty within Europe than there was a year ago.  As such, demand for the Euro has fallen while demand for the U.S. Dollar has risen as it is viewed as a safer currency to hold.

Naturally, other factors that determine a foreign exchange rate include the country’s GDP outlook, pricing changes in a major commodity export (such as oil, gold, or even coffee), political stability, among others.

You Don’t Need To Be A Tourist To Exchange Money

Converting one currency to another is most certainly not limited to travelers.  In fact, millions of individuals make a living by taking advantage of fluctuations in exchange markets through online trading.

Most financial intuitions offer their clients access to trade in the foreign exchange market.  If your bank does not offer access, there are many online brokers that offer online forex trading.

Setting up a foreign exchange account is straightforward and many companies offer sign-up bonuses or other incentives.

Once a foreign exchange account is set up and properly funded, the user now has access to buy and sell virtually every global currency.

Investors could make use of the foreign exchange market to supplement their already existing investments in the stock market.  On the other hand, a basket of multiple currencies offers investors a diversified investment tool.
As an example, investors who want to bet on the price of oil rising could consider buying a combination of oil-related currencies such as the Canadian Dollar or Mexican Peso.

Approximately $3 trillion worth of currencies change hands on a daily basis, making it the largest trading market in the world.  As such, the exchange is considered to be very liquid (that is every buyer is likely to find a seller and vice versa) and lucrative for day traders that seek to repeat small gains over and over again.  Naturally, investing in foreign exchange isn’t without risks that need to be fully understood before investing and trading.

source: everybodylovesyourmoney.com