Currency

Markets can ease Bank of England inflation dilemma

21 Mar 2017

Prices rose 2.3 pct in February, surpassing the central bank’s target for the first time since 2013. Market rates and sterling rose. This tightening in monetary conditions might allow Governor Mark Carney to defer a hike in official rates until the economic outlook is clearer.

Market angst about France infects whole of EU

17 Mar 2017

Far-right leader Marine Le Pen has promised to reshape French ties with the European Union if elected president. That would be an existential test for the whole bloc. Currency options prices show investors have rarely been so anxious about the EU-wide impact of a single event.

Viewsroom: Intel’s pricey bet on driverless cars

16 Mar 2017

The chipmaker is shelling out $15 bln for autonomous-driving parts firm Mobileye, a cool 30 times estimated revenue. Intel missed the mobile-phone revolution. Is it finally on the right road? Plus: Washington bounces bitcoin’s bid for mainstream acceptance.

Bitcoin is maimed, long live the blockchain

13 Mar 2017

U.S. regulators vetoed an ETF proposed by the Winklevoss twins, slamming the door on taking the crypto-currency to the masses. At the same time, the ledger technology behind it is gaining traction on Wall Street. Bitcoin-related speculation and long-term investing will coexist.

China gets a timely economic spring in its step

10 Mar 2017

A batch of positive data sets a good tone for the economy in 2017, easing fears of capital flight and deflation. The respite may be brief. Even so, it provides some room for Beijing to step back from firefighting, allowing it to focus on deleveraging and its ambitious restructuring plans.

Bitcoin’s ETF drive may spark volatile backfire

9 Mar 2017

The Winklevoss twins of Facebook fame are among those who want to open up the crypto-currency to a wider audience via an exchange-traded fund. Watchdog approval could unleash big inflows, but also fuel bitcoin’s scariest white-knuckle ride yet – and impede mainstream acceptance.

Protectionism skews emerging market risk compass

9 Mar 2017

Anti-trade rhetoric is a threat to export-dependent countries. But commodity producers such as Saudi Arabia are less vulnerable than nations that play a big role in global manufacturing, like China or Thailand. The latter look more prone to market volatility than in the past.

China gives Trump cheap trade trinkets

9 Mar 2017

China looks to have fast-tracked the U.S. president's trademark applications, and its economy is going his way too. U.S. imports shot up 38 pct last month, and the yuan has firmed. There's less to the data than meets the eye, and the trademarks are trouble.

Hadas: Trump’s FX truthiness misses the big points

20 Feb 2017

The U.S. president’s complaint that cheap overseas currencies hurt U.S. jobs contains a little truth, but his proposed cure is far worse than the disease. The main problem in foreign exchange is excess volatility. Fixing that requires better global coordination – a distant dream.

Asia will regret the retreat of global yuan

15 Feb 2017

China has sidelined efforts to take its currency global, and Asia might come to regret it. The region could use more hedges against dollar-denominated shocks in the Trump era.

Trump’s China retreat heralds more rational clash

10 Feb 2017

The U.S. president has backed away from reckless threats by reaffirming the "One China" policy. Fights over trade and currency issues are still in prospect. But the People's Republic – and the world – can take some comfort from Trump's belated embrace of conventional diplomacy.

Euro risks replacing sterling in FX doghouse

10 Feb 2017

The battered pound has won a reprieve as post-Brexit growth is proving more resilient than investors had anticipated. By contrast, the euro's star is waning before France's unpredictable elections. Options prices signal that the single currency could become traders' next victim.

Chinese FX reserve crosses risky line in sand

8 Feb 2017

The country's foreign currency stash fell below $3 tln in January, the lowest in nearly 6 years. That matters less than the line that might get crossed next: the yuan weakening past 7 per dollar. That would mean eating into the reserves still further, or risking U.S. wrath.

Tokyo is no economic enemy for Trump

6 Feb 2017

Japanese Premier Shinzo Abe is preparing a big package of U.S. investment and job creation to placate the president. Trump's claims of deliberate yen devaluation are wide of the mark. But Tokyo has little choice but to respond, even though it is already an important U.S. ally.

Sterling crash mystery lacks suspect – and victims

13 Jan 2017

There was no single trigger for the sudden 9 percent drop in the value of the pound on Oct. 7, a committee of central bankers has found. Big banks avoided major losses, and other markets were unaffected. Investors will have to learn to live with sharp but short-lived gyrations.

Czech currency cap will go way of the Swiss

11 Jan 2017

A peg tethering the crown to the euro has served its purpose by fending off deflation and nurturing growth. It's now becoming a magnet for speculative flows. As Switzerland showed policymakers two years ago, it's best to ditch doomed currency caps sooner than later.

China can ignore ill-advised flight to bitcoin

9 Jan 2017

Beijing has cracked down on people converting yuan to dollars, but seems relatively relaxed about them piling into the virtual currency. That's probably because the bitcoin market is tiny, volatile, and dominated by local speculators: an unreliable channel for capital outflows.

Too many forex fiddles make Beijing look nervous

3 Jan 2017

Regulators have put fresh restrictions on individuals changing money. They've also doubled the number of currencies in the official trading basket, a statistical trick to make the sliding yuan look stable. Instead of fooling investors, official anxiety could aggravate outflows.

U.S.-China currency war will be symbolic at best

20 Dec 2016

Donald Trump has promised to declare the People’s Republic a currency manipulator. The label means little, though, and the yuan is probably overvalued. The best case is that the U.S. president-elect declares victory and moves on. The risk is that hardliners in Beijing react.

Radical Modi could leave a trail of destruction

13 Dec 2016

New Delhi is scrambling to show its banknote recall was worthwhile, after cash flooded back faster than expected. Premier Narendra Modi's pursuit of illicit wealth is well intentioned. But aggressive tactics endanger everything from central bank credibility to fiscal discipline.