Currency

Investors’ Brazil dream becomes nightmare

13 Mar 2020

The former market darling’s currency has shed over 16% of its value versus the U.S. dollar this year, and its stock market is among the worst-performing in the world. Its trade position is weakening. And neither Brazil's central bank nor its president have good policy options.

Japan is stuck with curse of safe-haven yen

11 Mar 2020

Anxious investors have flocked to the currency, fuelling a rally that could hammer exporters. Tokyo will struggle to persuade other major industrial nations the yen is overvalued, so won’t win their help to curb the move. Solo action won’t work. Only calmer markets can help.

Eerie currency calm jeopardises more banking jobs

30 Jan 2020

Major exchange rates have been relatively stable because economies are moving in synch and global monetary policy is broadly accommodative. That makes foreign exchange less of a money-spinner for banks. Expect the ranks of FX traders and sales staff to shrink further.

Finablr faces tricky reboot after Travelex hack

14 Jan 2020

Shares in the London-listed fintech group have fallen 23% after a cyberattack on its bureau de change unit. The $350 mln decline probably overstates the immediate damage. The bigger risk is whether the mess deters corporate clients from Finablr’s faster-growing payments business.

Trump adds fake currency news to trade armory

13 Jan 2020

The U.S. government will stop accusing Beijing of yuan manipulation as part of a limited tariff deal. The dubious claim was born of presidential ire. But its arguable success makes it a useful stick for the White House – a worry for those with growing trade deficits like Vietnam.

West African monetary union expansion is high risk

3 Jan 2020

The region is rebranding its CFA franc as the eco and watering down French influence in how the currency is managed. True, Paris will still guarantee a peg with the euro. But a potential new member, Ghana, is already militating for the link to be ditched. That would be a mistake.

Argentina’s FX rift reflects its two-Macri problem

30 Sep 2019

The offshore peso rate has diverged 15% from the official rate, suggesting markets have lost faith with President Mauricio Macri. Political realities may explain why he promised one thing and delivered another. Future reformers may receive a greater degree of investor skepticism.

Baht’s brawn weakens sick man of Southeast Asia

19 Aug 2019

Thailand’s $500 bln economy expanded at its slowest rate in nearly five years last quarter, hit by cooling exports and tourism. Yet its currency is an outperformer, aggravating both problems. Lower rates and public spending could weaken it, as might investing more funds abroad.

Viewsroom: Vicious trade cycle traps U.S., China

8 Aug 2019

The White House’s decision to brand Beijing a currency manipulator is the latest move in a conflict riven by miscommunication, unrealistic expectations and no obvious way out. Plus: Why the LSE is paying $27 bln for Refinitiv, and which of the data firm’s owners comes out on top.

Donald Trump can weaken the dollar, at a price

8 Aug 2019

The U.S. President complains about the effect of a strong greenback but what can he do? Intervening in the currency markets may have little effect, but there are alternatives depending on his tolerance for unpleasant consequences. The most helpful move would be to end trade wars.

China’s currency slide could be hard to brake

8 Aug 2019

Tension with Washington has pushed the yuan past 7 per dollar. Beijing needs to keep depreciation modest, but a weakening economy makes that complicated. A sharp fall could weaken already tepid import demand, while cheap exports would sting regional trade partners like Japan.

Trump hands Beijing an excuse to let yuan slide

5 Aug 2019

China's currency has slumped past 7 to the dollar, a long-defended threshold. That marks a trade war escalation, days after Washington announced fresh tariffs, but also an adjustment to reality: with growth slowing, the yuan was too strong. Diplomatic failure has a silver lining.

Trump’s yuan move makes a China deal much harder

6 Aug 2019

The U.S. Treasury labelled China a manipulator after its currency fell below 7 to the dollar. It followed Beijing’s threat to retaliate for the president’s latest tariffs. The sudden escalation makes it tougher for both sides to strike a deal. No wonder markets are fragile.

New UK banknote just about passes Turing test

17 Jul 2019

With cash use shrinking and high denominations favoured by crooks, there are reasons to scrap big bills. But a revamp of the 50-pound note, picturing the mathematician, is intelligent enough. Unlike, say, 500 euros, it still fits a system shifting slowly to digital payments.

“Do or die” Brexit condemns sterling to new lows

16 Jul 2019

The pound fell to its weakest in two years against the dollar. Boris Johnson and Jeremy Hunt, rivals to be Britain’s next leader, are vying to take the hardest stance on the UK’s exit from the EU. If they stick to their guns, the currency will suffer long before the economy does.

Trump FX gripes may escalate another war of words

15 Jul 2019

The U.S. president says China and Europe are manipulating their currencies and Washington should match them. Competitive devaluation would break yet another long-standing norm and add a foreign-exchange battle to tariff conflicts. There would also be few, if any, winners.

Budweiser and Alibaba flag Hong Kong dollar oddity

10 Jul 2019

As the two companies kicked off plans to raise some $20 bln combined, the currency bounced. In a place where stocks are worth over 1,000% of GDP, local money demands can move markets. Former central banker Joseph Yam’s warning about the challenges of such a system look prescient.

New Zimbabwe dollar heading same way as old one

25 Jun 2019

Robert Mugabe’s successor has banned day-to-day use of foreign currency to promote a new local dollar. Crucially, there are no guarantees against the money-printing that killed its predecessor. Without adequate reserves, exports or popular support, the new unit is likely to fail.

Iron ore complicates Australia’s growth challenge

12 Jun 2019

The rising price of the steel ingredient has yet to boost investment in mining, or wages. But it is making the local dollar more resilient to trade tensions and a rate cut. That means the economy, expanding at its slowest annual rate in a decade, is even harder to revive.

China gingerly blurs its currency red line

11 Jun 2019

Officials have hinted that they may not defend the rate of 7 yuan to the dollar, the previous tacit limit. But regulators are also threatening short sellers with big losses. With more tariffs in the pipeline, Beijing is wise to reset expectations, and keep them vague.