Currency

Wall Street’s resolve overcomes even Pyongyang

9 Aug 2017

U.S. investors shrugged off possible Armageddon just as easily as protectionism and D.C. dysfunction. President Trump’s blunt nuclear warning might have been a fresh reason to rush into gold or gunsmiths. Mr. Market, however, rarely foretells geopolitical or economic threats.

Strong yuan opens window to rethink forex controls

8 Aug 2017

China's foreign exchange reserves have stabilized at $3.1 trln as the yuan rallies. Capital flight has been staunched, thanks mostly to the dollar's plunge. If Beijing wants to attract more foreign money into its stocks and bonds, it might be a good time to relax currency curbs.

SEC brings dodgy digital-currency sales to earth

26 Jul 2017

The U.S. watchdog says 2016’s biggest so-called initial coin offering was a securities issue that didn’t comply with the law. That will crimp a market that has boomed to $1.3 bln so far this year. A crackdown will test whether it’s worth the trouble of making ICOs legitimate.

Hadas: What Brexit forecasters got wrong

26 Jul 2017

The UK government’s pre-referendum forecasts about what leaving the EU would mean were gloomy, but not dark enough. What they missed: British inflexibility, the damage from unlinking trade, the challenge of migration and the lingering costs of national self-humiliation.

Euro rally will only speed its own reversal

21 Jul 2017

The single currency has hit a two-year high against the U.S. dollar. That will depress import prices when inflation is still too low. Any hint that a stronger exchange rate will prompt the European Central Bank to leave monetary policy loose for longer will push it down again.

Crypto-currency deals recall an earlier tech craze

19 Jul 2017

A rash of initial coin offerings has raised $1.3 bln in 2017, much of it in the past month. These crypto-currency versions of an IPO bear the speculative hallmarks of the ‘90s tech boom. With untested managements and few if any investor protections, this wave may end just as badly.

Hadas: Currency flexibility is overrated

5 Jul 2017

The pound’s post-referendum drop has done little to enhance Britain’s balance of payments. No surprise there – in developed economies, exchange rates are a relatively minor factor in trade relations. Fixed currencies have more benefits than costs, as the resurgent euro shows.

Draghi’s taper tizzy is sign of dangers to come

29 Jun 2017

Comments by ECB chief Mario Draghi drove up bond yields and the euro, despite later protestations that markets had misread him. The ado owes more to investor complacency than fuzzy talk. It highlights traders’ twitchiness and the challenges in withdrawing ultra-loose policy.

Exchange Podcast: James Ledbetter

20 Jun 2017

During the 2016 campaign, Donald Trump suggested the United States revisit the gold standard. So did his rivals Ted Cruz, Rand Paul and Ben Carson. Why are Americans so obsessed with the precious metal, both as a store of value and an investment? James Ledbetter swings by Times Square to discuss his new book, "One Nation Under Gold."

EU clearing row shows limits of UK taking control

13 Jun 2017

The European Union won’t force trading in euro-denominated derivatives to leave London. But it will require UK-based clearing houses to follow EU regulations, or lose out. It’s proof that post-Brexit Britain will have to play by European rules – but lose any say in setting them.

Sterling post-election blues will be slow to lift

9 Jun 2017

A hung parliament has hit the currency hardest of all UK assets. The saving grace is that a brutal exit from the European Union and a second Scottish independence referendum may now be a little less likely. But neither is a good enough reason to stock up on pounds anytime soon.

China puts currency market forces on notice

26 May 2017

It may tweak the way the yuan is priced each day, effectively giving policymakers more control over its value. In reality, the daily price-fixing is only a small part of how China manages its currency. It’s another step back from reform and suggests mounting economic worries.

Viewsroom: Trump budgets his way to la-la land

25 May 2017

Basic economics - and decency - fall by the wayside in the administration’s pitch that it can create $2 trln of revenue by cutting $3.6 trln of costs. OPEC and U.S. fields battle for oil supremacy. Zimbabwe invents the zollar. And Bill Ford escapes his CEO’s crash unscathed.

FX market might benefit from statement of obvious

25 May 2017

New guidelines for the $5 trln-a-day currency trading market exhort participants to behave ethically and fairly. That will hardly deter miscreants. Still, the code has a good stab at clarifying grey areas and avoids creating exploitable loopholes. Best of all, it will evolve.

Hadas: The next financial crisis could be in forex

24 May 2017

Foreigners are happy to hold U.S. dollars, but a swelling supply of currency brings risks of a disastrous loss of confidence. With overseas greenbacks at 11 pct of world GDP and global politics fractious, the dilemma identified by Robert Triffin in 1960 remains all too pertinent.

Zimbabwe takes monetary lunacy to the next level

22 May 2017

The African state suffered hyperinflation in 2007 after paying bills by printing its own currency. A decade on, it is doing so by printing U.S. dollars instead. The idea of conjuring foreign currency from nowhere with the tap of a keyboard sounds too good to be true – and is.

Hadas: Nationalists are united by economic muddle

26 Apr 2017

Brexit fans want freer trade, Marine Le Pen is a protectionist and Donald Trump can’t make up his mind. Populists also disagree on fiscal deficits and industrial policy. What they share is an aversion to the truth that national prosperity starts with compromises on sovereignty.

Trump finds markets, too, are complicated beasts

13 Apr 2017

The U.S. president no longer wants to label Beijing a currency manipulator. He belatedly learned the yuan hasn’t been purposely devalued for a while. He's also warming to the dovish Janet Yellen and the Export-Import Bank. As with healthcare, he seems to be learning on the job.

South Africa’s slow burn cuts chances of quick fix

6 Apr 2017

President Jacob Zuma seems to be doing his best to get foreign investors to dump domestic assets. That may not lead to a sudden stop: only a small minority face being forced sellers. The bad news is that this could slow the process to replace him with a more responsible leader.

Iceland needs euro peg like cod needs bicycle

4 Apr 2017

The North Atlantic state’s finance minister suggests fixing the crown’s value to its euro zone peer. Iceland’s economy could use cooling. But its volatility means that focusing attention on inflows – or even pegging to a more appropriate currency – makes more sense.