The demise of the dollar

[Zechariah]

http://www.independent.co.uk/news/business/news/the-demise-of-the-dollar-1798175.html

In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading

By Robert Fisk

Tuesday, 6 October 2009

In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.

The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs. Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."

This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient. The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.

The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. "One of the legacies of this crisis may be a recognition of changed economic power relations," he said in Istanbul ahead of meetings this week of the IMF and World Bank. But it is China's extraordinary new financial power – along with past anger among oil-producing and oil-consuming nations at America's power to interfere in the international financial system – which has prompted the latest discussions involving the Gulf states.

Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed, China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East.

China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq – blocked by the US until this year – and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources. China has oil deals in Sudan (where it has substituted for US interests) and has been negotiating for oil concessions with Libya, where all such contracts are joint ventures.

Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls. In a clear sign of China's growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China's reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro.

Ever since the Bretton Woods agreements – the accords after the Second World War which bequeathed the architecture for the modern international financial system – America's trading partners have been left to cope with the impact of Washington's control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency.

The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now. "The Russians will eventually bring in the rouble to the basket of currencies," a prominent Hong Kong broker told The Independent. "The Brits are stuck in the middle and will come into the euro. They have no choice because they won't be able to use the US dollar."

Chinese financial sources believe President Barack Obama is too busy fixing the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years' time. The current deadline for the currency transition is 2018.

The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.

"These plans will change the face of international financial transactions," one Chinese banker said. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.

 

[Zechariah]

Canadian Dollar Appreciates on Russian Central Bank Endorsement

By Chris Fournier and Ruby Madren-Britton

Nov. 25 (Bloomberg) -- Canada’s dollar strengthened to the highest level in a week after Russia’s central bank said it will add the currency to its reserves and as copper rose and gold headed for the longest string of gains in almost three decades.

The Canadian currency, nicknamed the loonie for the image of the bird on the C$1 coin, rose against 11 of its 16 most- traded counterparts tracked by Bloomberg. The U.S. dollar dropped against all of them as investors’ appetite for risk strengthened.

The Russian central bank plan “is contributing to broad U.S. dollar weakness,” said Stephen Gallo, head of market analysis at Schneider Foreign Exchange in London. “It’s difficult to say if it’s a bigger deal for the Canadian dollar or for the negative story behind the U.S. dollar, but I suspect it may be evenly balanced.”

The Canadian currency appreciated as much as 1.2 percent to C$1.0451 per U.S. dollar, the strongest level since Nov. 18, and was up 0.8 percent to C$1.0493 at 1:33 p.m. in New York, from C$1.0580 yesterday. It gained 3.4 percent in November. One Canadian dollar buys 95.31 U.S. cents.

Government bonds rose. The yield on Canada’s benchmark 10- year note fell three basis points, or 0.03 percentage point, to 3.26 percent, the lowest since Oct. 6. The price of the 3.75 percent security due in June 2019 rose 25 cents to C$104.02.

‘Under Way’

Russia aims to diversify its reserves, increase gold holdings and promote regional currencies in trade and finance to reduce risks posed by the U.S. dollar’s dominance. President Dmitry Medvedev has blamed the global financial crisis on an over-reliance on the U.S. currency.

“Technical preparations for transactions in Canadian dollars are under way,” a Bank Rossii official said by phone in Moscow, declining to be identified in line with the regulator’s policy. “Then there may be one, two other currencies and that’s it,” he said, confirming remarks to parliament today by Sergei Shvetsov, the central bank’s financial operations chief.

Russia’s decision reflects a desire to shield reserves against the dollar’s decline after the U.S. currency lost 13.4 percent against the euro in the past 12 months, making it the worst performer against Europe’s single currency among its 16 most-traded counterparts.

The European currency appreciated as much as 0.9 percent today to $1.0596.

‘Away From’ Greenback

“It shows the desire for central banks to diversify away from, first and foremost, the U.S. dollar,” said Matthew Strauss, a senior currency strategist in Toronto at Royal Bank of Canada, the nation’s biggest lender. “The Canadian dollar and other currencies backed by very structurally strong economies and strong fundamentals are benefiting from this diversification.”

The Russian bank’s increase in Canadian holdings will likely be gradual, Strauss said.

The Canadian dollar climbed 16 percent this year on a rebound in commodity prices. Raw materials including crude oil, gold, copper and lumber account for more than half of the country’s export revenue.

Crude for January delivery increased 1.5 percent to $77.19 a barrel on the New York Mercantile Exchange after falling earlier as much as 0.7 percent. The resource, Canada’s biggest export, is up 70 percent this year.

‘Increasing Risk Appetite’

Gold futures for February delivery on the New York Mercantile Exchange’s Comex division climbed as much as 1.8 percent to a record $1,188.50 an ounce. Futures are up for a ninth day, set for the longest winning streak since August 1982. Copper for March delivery rose 1.8 percent to $3.201 a pound.

The MSCI World Index, a gauge of equities in 23 developed nations climbed 1 percent. The Standard & Poor’s 500 Index was up 0.3 percent as reports showed new U.S. home sales rose 6.2 percent in October and initial claims for jobless benefits slid last week to the lowest level since September 2008.

The Canadian dollar “is going to test C$1.0419,” said David Love, a Montreal-based trader of interest-rate derivatives at brokerage Le Group Jitney Inc., citing technical patterns. He said the rise in gold and copper is “increasing risk appetite.”

Canada’s dollar will appreciate to C$1.03 by the end of the first quarter next year, according to the median forecast of 36 economists and analysts surveyed by Bloomberg News.

To contact the reporters on this story: Chris Fournier in Montreal at cfournier3@bloomberg.net; Ruby Madren-Britton in New York at rmadrenbritt@bloomberg.net

http://www.bloomberg.com/apps/news?pid=20601082&sid=aMoYi85WxEcA

 

[suhaib]

will dollar and yen will collapse pretty soon, most investors and backing the yuan and gold right now, i got in on gold at $950 and still holding it.

 

[Zechariah]

Good buy, it will keep going up for the next few months as the dollar goes down, share your wealth janab.

The dollar index is not looking good at all and today Russia decided to convert US reserves into Canadian and other currencies, it will keep going down more as other countries diversify.

This is what happens when you terrorize the world, serves them right.

 

[tahaqureshi]

sad thing is this...the appreciation of gold is causing currencies like the Canadian dollar to appreciate heavily which is causing massive inflation in a country already hit by a high cost of living..this whole collapse of the US dollar thing is not gonna be easy on the rest of the world.

some currencies like the yuan should get ready for some massive appreciation as they take over the dominant world currency title.

its an inevitability that their countries need to get ready for as demand for their currencies increasing over the next decade and their people face increasing costs of living..and by other countries i mean countries like china and the EU.

 

[fawad_wellwisher]

sad thing is this...the appreciation of gold is causing currencies like the Canadian dollar to appreciate heavily which is causing massive inflation in a country already hit by a high cost of living..this whole collapse of the US dollar thing is not gonna be easy on the rest of the world.

some currencies like the yuan should get ready for some massive appreciation as they take over the dominant world currency title.

its an inevitability that their countries need to get ready for as demand for their currencies increasing over the next decade and their people face increasing costs of living..and by other countries i mean countries like china and the EU.

A higher price of gold is a symptom of high inflation not the cause of it. Inflation is caused by an increase in money supply (creating money out of nothing) by the central banks. Since gold has monetary value it normally starts to rise in value when the confidence against government policies goes down.

 

[tahaqureshi]

A higher price of gold is a symptom of high inflation not the cause of it. Inflation is caused by an increase in money supply (creating money out of nothing) by the central banks. Since gold has monetary value it normally starts to rise in value when the confidence against government policies goes down.

What I'm scared of is that this inflation of the value of gold is creating exactly the kind of bubble that excessive credit created.

Gold had a very large buffer which is why it was considered so safe a commodity to store. Unfortunately, as you've mentioned yourself, the increase in the money supply (or credit in many cases) has dipped confidence in the monetary market and government policy, and caused a hyped value of gold. Its almost like what happened to the oil markets.

Now gold is still more stable and resilient than oil, but it will definitely drop off the edge of the cliff at some point in the near future. And what I don't understand is, since supply of gold is fairly constant, is there really such an increase in the demand for gold which is causing its price to rocket?

 

[Wazeeri]

Not all of the appreciation of gold is natural market behaviour. American economists have been backing the gold and talking it up for ages.

This could well be the rich making money out of nothing. First you make billions from the banks and let the tax payers fill the void and now the same is being done with the dollar.

 

[fawad_wellwisher]

What I'm scared of is that this inflation of the value of gold is creating exactly the kind of bubble that excessive credit created.

It will eventually but that point is far into the future IMO.

Gold had a very large buffer which is why it was considered so safe a commodity to store. Unfortunately, as you've mentioned yourself, the increase in the money supply (or credit in many cases) has dipped confidence in the monetary market and government policy, and caused a hyped value of gold. Its almost like what happened to the oil markets.

Yes. Actually another way of looking at it is that all the paper currencies are depreciating against Gold.

Now gold is still more stable and resilient than oil, but it will definitely drop off the edge of the cliff at some point in the near future. And what I don't understand is, since supply of gold is fairly constant, is there really such an increase in the demand for gold which is causing its price to rocket?

With so much money printing going Gold is going much higher in the long term. In the short term it may go down in value as is normally the case due to speculative activity that goes on in the markets. You have to remember that both Oil and Gold are rising not because of the speculators but because of fundamental reasons. These reasons are primarily driven by dollar depreciation and supply-demand imbalance issues. we are running out of cheap oil and the annual supply of gold is decreasing every year because there wasn't much exploration work done to bring new mines into production in the last 30 years due to a depressed gold price in the 80's and 90's.

In any the next 15-20 years are going to be a turbulent period as is usually the case when confidence in the government starts to go down. For savers and retirees it is imperative they move some of their capital in precious metals to avoid getting robbed through the 'inflation tax.'

 

[fawad_wellwisher]

Not all of the appreciation of gold is natural market behaviour.

Yes there is speculative activity in the gold market but gold is rising due to fundamental reasons.

American economists have been backing the gold and talking it up for ages.

Actually the reverse is true. The American economists who mostly follow Keynes theories which requires government spending and monetary inlation to get out of recessions, actually dislike gold and have always talked it down. Infact gold was considered by Keynes to be a barbaric relic. When gold goes up it exposes big governments and politicians alike for what they really are - Mafias with a license to steal from the public.

This could well be the rich making money out of nothing. First you make billions from the banks and let the tax payers fill the void and now the same is being done with the dollar.

The Rich will always make money. The point one needs to understand is how does one protect one's savings in this time of high inflation. One way is to buy and hold gold for the long term.

 

[Wazeeri]

The point one needs to understand is how does one protect one's savings in this time of high inflation. One way is to buy and hold gold for the long term.

And let it go at the right time. Just before the Gold starts changing hands to settle debts.

 

[fawad_wellwisher]

And let it go at the right time. Just before the Gold starts changing hands to settle debts.

Or until the elitists manufacture a global crisis to unveil their plans of a new global currency managed by supra-national central bank

Will the Obama spend-a-rama finish off the dollar as the world's reserve currency? It well may, and sooner than most people think. Any day now we may wake up to headlines announcing that the International Monetary Fund's SDR (Special Drawing Rights) is being adopted as the new global currency. That, of course, was the revolutionary plan adopted by the finance ministers, central bankers, and heads of state at the London G20 Summit in April.

Rest of the article

http://rolandsanjuan.blogspot.com/2009/05/dumping-dollar-for-global-currency.html

 

[suhaib]

fawad is right, most investors and economists follow keynes model, and before gold hit $1000 last month, nearly everyone was barking about a crash and gold dropping to $700. Except the clever few like jim rogers, marc faber, peter schiff etc.

gold is going up due to fundamental and technical reasons, speculation is there but it is low, most economists and investors are still calling for it to crash and these are the people who belive the recession is over, while the clever few who always get things right have pridicted these things since the last 5 years and are calling for gold to go much higher and are seeing a major depression ahead with hyperinflation, marc faber one of the best investors and analysts are seeing a zimbabwe style hyperinflation coming to the west pretty soon.

 

[Random Aussie]

fawad is right, most investors and economists follow keynes model, and before gold hit $1000 last month, nearly everyone was barking about a crash and gold dropping to $700. Except the clever few like jim rogers, marc faber, peter schiff etc.

gold is going up due to fundamental and technical reasons, speculation is there but it is low, most economists and investors are still calling for it to crash and these are the people who belive the recession is over, while the clever few who always get things right have pridicted these things since the last 5 years and are calling for gold to go much higher and are seeing a major depression ahead with hyperinflation, marc faber one of the best investors and analysts are seeing a zimbabwe style hyperinflation coming to the west pretty soon.

Turn it up mate, I can't quite hear you )

I thought we were supposed to have hyperinflation last year..or was it the year before? Or was it after Iraq invasion? Or 9/11? Or......maybe next year you can get lucky and watch the West crash and burn.

 

[Random Aussie]

Or until the elitists manufacture a global crisis to unveil their plans of a new global currency managed by supra-national central bank

 

[fawad_wellwisher]

As Dubya said and I quote

"You can fool some of the people all the time, and those are the ones you want to concentrate on"

Ofcourse you have the right to stay under that rock!

 

[Random Aussie]

As Dubya said and I quote

"You can fool some of the people all the time, and those are the ones you want to concentrate on"

Ofcourse you have the right to stay under that rock!

Uh that was a joke from Dubya. But anyway, yes I am getting ready for hyperinflation, fixing up my wheelbarrow so I can do the banking.

 

[Garuda]

Even the Indian finance ministry thinking the same.


Nov. 3 (Bloomberg) -- India, the world’s biggest gold consumer, bought 200 metric tons from the International Monetary Fund for $6.7 billion as central banks show increased interest in diversifying their holdings to protect against a slumping dollar.


http://www.bloomberg.com/apps/news?pid=20601091&sid=aa6oc6Wz9Ftg

 

[suhaib]

Turn it up mate, I can't quite hear you )

I thought we were supposed to have hyperinflation last year..or was it the year before? Or was it after Iraq invasion? Or 9/11? Or......maybe next year you can get lucky and watch the West crash and burn.

lol, who has said that hyperinflation was going to come in 9/11 or iraq invasion or even last year, can you give some names as im sure you just made that up.

you are that same bunny that was argueing with me about the recession being ended and economy getting better back in june, ) what happened to that.

 

[Random Aussie]

lol, who has said that hyperinflation was going to come in 9/11 or iraq invasion or even last year, can you give some names as im sure you just made that up.

you are that same bunny that was argueing with me about the recession being ended and economy getting better back in june, ) what happened to that.

One of the previous posts on here talked about hyperinflation in June. Look it up if you can be bothered. Just Google it and you can find the sources for posting these sorts of articles.

And uh yes the economy has improved a lot. Risk is being priced somewhere closer to it's correct value now. Things going alright in Oz actually mate.

General rule:
If you see or hear the following phrases

a) New World Order
b) Peak Oil
c) Hyperinflation
d) Secret Government

in relation to the Western world you are most likely in conspiracy theory land with the other crackpots.

 

[slix10]

Hyperinflation in the US? Do people even know what hyperinflation is? Do we have any economists on board or it's full of techies?

Totally absurd to suggest that.

 

[suhaib]

One of the previous posts on here talked about hyperinflation in June. Look it up if you can be bothered. Just Google it and you can find the sources for posting these sorts of articles.

And uh yes the economy has improved a lot. Risk is being priced somewhere closer to it's correct value now. Things going alright in Oz actually mate.

General rule:
If you see or hear the following phrases

a) New World Order
b) Peak Oil
c) Hyperinflation
d) Secret Government

in relation to the Western world you are most likely in conspiracy theory land with the other crackpots.

economy has improved? consumer spending has been falling and falling, number of people defaulting on loans is getting higher and higher yet you think economy is improving, LOL.

and i can only laught at you adsurb statement about conspiracy theories as it was a conspiracy theory according to you guys that we are gona go in a recession and dollar will fall some years back, your stupid media made a laught out of marc faber and jim rogers when they were the only few ones talking about it and were labeled conspiracy theorists and crackpots by you lot, by history has proven time and time again that these people were right, and you live in a deluided world were your opinion is manipulated by the media.

just have a look at this video yourself and see who the real crackpots are and whos not.
[utube]2I0QN-FYkpw[/utube]

even ron paul is called a conspiracy theorist but is now a favoirte amongst the financial circles. i guess its the only word used now to defend the truth.

however time will tell again that its the so called conspiracy theorists that were right just like they were last year.

 

[offstump]

One of the previous posts on here talked about hyperinflation in June. Look it up if you can be bothered. Just Google it and you can find the sources for posting these sorts of articles.

And uh yes the economy has improved a lot. Risk is being priced somewhere closer to it's correct value now. Things going alright in Oz actually mate.

General rule:
If you see or hear the following phrases

a) New World Order
b) Peak Oil
c) Hyperinflation
d) Secret Government

in relation to the Western world you are most likely in conspiracy theory land with the other crackpots.

Why do you think peak oil is a conspiracy theory?

 

[Zechariah]

The dollar index goes lower by each passing day.

 

[tahaqureshi]

I just wonder how America could have spent the $937,074,117,743 in other ways instead of going to war in Iraq and Afghanistan.

That is a huge amount of $$, enough to finance the entire proposed health care bill for almost 10 years, enough to cover the cost of the recent economic bailout, enough to prevent today's horrible economic climate.

Humans don't use money wisely.

 

[tahaqureshi]

Two years ago, a congressional report stated that the wars in Iraq and Afghanistan are going to cost the US a whopping $2.4 trillion over the course of the next ten years.

It makes me shiver to think that such big number are thrown around so easily.

We could possibly save humanity with that money. But no, a handful of guerrillas are more important than the world's economy going into the dumpster.

And with that note, Obama increases the troop numbers in Afghanistan.

 

[Zechariah]

Two years ago, a congressional report stated that the wars in Iraq and Afghanistan are going to cost the US a whopping $2.4 trillion over the course of the next ten years.

It makes me shiver to think that such big number are thrown around so easily.

We could possibly save humanity with that money. But no, a handful of guerrillas are more important than the world's economy going into the dumpster.

And with that note, Obama increases the troop numbers in Afghanistan.

More $$$$ for the Central Bank

 

[JaDed]

Bump similar predictions again!!! PP is a great archive to see how predictions workout! Mods this is w.r.t West demise one , so kindly let it stay

 

[The Bald Eagle]

King dollar seen vulnerable in 2024 if Fed pivots​

The Federal Reserve’s dovish December pivot has boosted the case for the weakening dollar to keep falling into 2024, though strength in the U.S. economy could limit the greenback´s decline.

After soaring to a two-decade high on the back of the Fed´s rate hikes in 2022, the U.S. currency has been largely range-bound this year on the back of resilient U.S. growth and the central bank’s vow to keep borrowing costs elevated.

The dollar was on track for a 2% loss this year against a basket of its peers, its first yearly decline since 2020.

The December Fed meeting marked an unexpected shift, after Chairman Jerome Powell said the historic monetary policy tightening that brought rates to their highest level in decades was likely over, thanks to cooling inflation. Policymakers now project 75 basis points of cuts next year.

Falling rates are generally seen as a headwind for the dollar, making assets in the U.S. currency less attractive to yield-seeking investors. Though strategists had expected the dollar to weaken next year, a faster pace of rate cuts could accelerate the currency’s decline.

Still, betting on a weaker dollar has been a perilous undertaking in recent years, and some investors are wary of jumping the gun. A U.S. economy that continues to outperform its peers could be one factor presenting an obstacle for bearish investors.

The Fed´s aggressive monetary policy tightening, along with post-pandemic policies to boost U.S. growth, “fueled the notion of American exceptionalism and delivered the most powerful dollar rally since the 1980s,” said Kit Juckes, chief FX strategist at Societe Generale.

Source : Reuters

 

[hassan918]

Dollar rate is very much stable in the last six months or so in Pakistan but I am expecting it to go up after the general election.

 

[The Bald Eagle]

US Dollar struggles to find demand as focus shifts to inflation data​

The US Dollar (USD) stays on the back foot early Thursday, with the USD Index retreating toward 102.00 after closing in negative territory on Wednesday. Weekly Initial Jobless Claims data and Consumer Price Index (CPI) figures for December will be featured in the US economic docket later in the day.

US Inflation Preview: Stocks set to surge if reality fails to meet high Core CPI expectations.

In the absence of high-tier macroeconomic data releases, improving risk mood made it difficult for the USD to stay resilient against its rivals during the American trading hours on Wednesday. US stock index futures were last seen rising between 0.2% and 0.4%, suggesting that the sentiment remains upbeat. Meanwhile, the high-yield at the 10-year US Treasury note auction came in at 4.02%, down from 4.29% in December and put additional weight on the currency.

US Dollar price this week
The table below shows the percentage change of US Dollar (USD) against listed major currencies this week. US Dollar was the weakest against the Pound Sterling.

USD EUR GBP CAD AUD JPY NZD CHF
USD -0.39% -0.43% -0.02% -0.04% 0.47% -0.06% -0.18%
EUR 0.40% -0.03% 0.39% 0.37% 0.88% 0.35% 0.22%
GBP 0.42% 0.03% 0.42% 0.40% 0.90% 0.38% 0.24%
CAD 0.02% -0.37% -0.41% -0.02% 0.51% -0.04% -0.16%
AUD 0.04% -0.34% -0.38% 0.03% 0.54% -0.02% -0.15%
JPY -0.50% -0.86% -0.92% -0.48% -0.50% -0.54% -0.66%
NZD 0.06% -0.35% -0.38% 0.04% 0.02% 0.53% -0.13%
CHF 0.17% -0.23% -0.26% 0.16% 0.14% 0.65% 0.12%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Euro from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent EUR (base)/JPY (quote).

CPI inflation in the US is forecast to tick up to 3.2% on a yearly basis from 3.1% in November. The Core CPI, which excludes volatile food and energy prices, is expected to rise 0.3% on a monthly basis.

US CPI Data Preview: Declining core inflation could reinforce expectations of Fed rate cuts.

Earlier in the day, the data from Australia showed that Imports declined by 7.9% on a monthly basis in December, while Exports increased by 1.7%. After posting small gains on Wednesday, AUD/USD continued to edge higher in the Asian trading hours and the pair was last seen trading in positive territory above 0.6700.

EUR/USD gained traction in the second half of the day on Wednesday and closed above 1.0950. The pair was last seen inching higher toward 1.1000.

GBP/USD reclaimed 1.2700 during the American session on Wednesday and extended its rebound in the Asian trading hours on Thursday. The pair was last seen trading at its highest level in nearly two weeks at around 1.2770.

Despite the renewed USD weakness, USD/JPY rose toward 146.00 and posted strong gains on Wednesday. The pair staged a technical correction early Thursday and was last seen trading in negative territory below 145.50.

Gold closed marginally lower on Wednesday as the benchmark 10-year US Treasury bond yield managed to stabilize near 4%. XAU/USD clings to modest recovery gains slightly above $2,030.

(This story was corrected at 07:28 GMT to say CPI inflation in the US is forecast to tick up to 3.2% on a yearly basis from 3.1% in November, not 2.1%.)

Source : FX Street

 

[The Bald Eagle]

The US dollar edged higher on Thursday after data showed the world’s largest economy grew at a faster pace than expected in the fourth quarter, suggesting the Federal Reserve would be in no rush to cut interest rates amid a generally stable economy.

The dollar index, a gauge of the greenback’s value versus six major currencies, was last up 0.1% at 103.37. The euro, on the other hand, fell against the dollar, after mixed comments from European Central Bank President Christine Lagarde. She said it was “premature to discuss rate cuts” for the euro zone economy, but noted that the risks to economic growth remain “tilted to the downside.”

The ECB, at its policy meeting on Thursday, left borrowing costs unchanged. The single euro zone currency last traded at $1.0863, down 0.2%.

In the United States, the Bureau of Economic Analysis’s advance GDP estimate showed that gross domestic product in the last quarter increased at a 3.3% annualized rate, compared with the consensus forecasts of growth at a 2.0% rate.

“It’s only fitting that a year that defied expectations would show growth that exceeded expectations. You have to squint to see weakness in the numbers,” said Brian Jacobsen, chief economist, at Annex Wealth Management, at Menomonee Falls, Wisconsin.

Source: Business Recorder

 

[FearlessRoar]

US dollar surges to new 34-year high vs yen after hotter-than-expected inflation data​

The dollar rose across the board on Wednesday, soaring against the Japanese yen to its highest since mid-1990, after U.S. inflation rose more than expected in March, pushing out the expected timing of a first rate cut to September from June.

Market participants were also on the alert for any signs of intervention from Japanese authorities to boost the yen.

The big move in the yen came after data showed the U.S. consumer price index (CPI) rose 0.4% on a monthly basis in March, compared with the 0.3% increase expected by economists polled by Reuters. On a year-on-year basis, the CPI increased 3.5% versus forecasts of a 3.4% growth.

Excluding the volatile food and energy components, core inflation grew 0.4% month-on-month in March, compared with expectations of a 0.3% advance. Annually, it gained 3.8%, versus the estimated 3.7% increase.

Following the CPI data, traders slashed bets that the Federal Reserve would cut interest rates in June to 17%, from 57% late on Tuesday, according to the CME's FedWatch tool. They now see the likelihood of an interest rate cut at the September meeting, with a 66% probability, based on prices of rate futures.

Fed fund futures have also reduced the number of rate cuts of 25 basis points (bps) this year to under two, or roughly 44 bps, from about three or four a few weeks ago.

"The core rate of inflation has accelerated four months in a row. ... Maybe you get some moderation later in the year but given the fact you're starting from a higher rate, you're going to need real weak numbers and more time to be convinced that inflation is trending back down after what appeared to be the case last fall," said Joseph Lavorgna, chief U.S. economist, at SMBC Nikko Securities in New York.

"What that means is the timing of Fed easing is going to get pushed out," Lavorgna added.

In afternoon trading, the dollar index, which measures the greenback's value against six major currencies, was up 1.07% at 105.20 , on track for its largest daily gain since March 2023. Earlier, it climbed to its highest since November.

Minutes of the last Fed meeting released on Wednesday suggested that central bank officials were worried that the progress on inflation slowed and they may have to keep interest rates higher for longer.

"The Fed has no reason to cut rates when we are still battling inflation - that's the realization," said Kenneth Mahoney, president at Mahoney Asset Management in Greenwich, Connecticut.

The euro, meanwhile, fell 1.06% to $1.0741 , on pace for its biggest one-day fall in about a year.

Against the yen, the dollar was last up 0.93% from late Tuesday at 153.15 yen , having touched 153.24, the highest since June 1990.

Traders have been on alert for weeks for possible intervention by Tokyo authorities, as even a historic exit from negative rates in Japan has failed to lift the currency.

Japan intervened in the currency market three times in 2022, selling the dollar to buy yen, first in September and again in October as the yen slid toward what was then a 32-year low of 152 to the dollar.

The yen has been under pressure for years as U.S. interest rates have climbed and Japan's have stayed near zero, driving cash out of yen and into dollars to earn so-called "carry."

Yen futures data from CFTC showed non-commercial short positions had climbed to 143,230 contracts in the week ended April 2, the largest since December 2013.

"I would say there is a 30% chance of Japanese intervention this month. That move today, that quick move down, it just seems a bad time to fight it," said Adam Button, chief currency analyst at FOREXLIVE.

"Japan doesn't want the yen to weaken further, but this is fundamental move of broad U.S. dollar strength. I don't see the argument for fighting this move from Japan right now, it's not a yen move, it's a broad U.S. dollar move," Button added.

https://www.reuters.com/markets/currencies/dollar-sideways-yen-under-watch-ahead-key-cpi-release-2024-04-10/