Draghi and Carney’s FX headaches have similar cure 6 Sep 2017 ECB chief Mario Draghi has too little inflation while the Bank of England’s Mark Carney has too much. Currency moves are compounding the problem for both central bankers. Their best hope of fighting unwanted shifts is to convince traders that policy will adapt to such swings.
Uzbek currency is experiment in controlled chaos 6 Sep 2017 The central Asian country has slashed the value of its currency by half. Such moves can hurt consumers and banks and trigger runaway inflation, but Tashkent has levers to limit the risks. While tough tests lie ahead, this is likely to be an example of virtuous devaluation.
China sets limits on fintech disruption 6 Sep 2017 A ban on crypto-currency initial coin offerings follows a similar U.S. crackdown. Like the SEC, Chinese regulators are trying to protect consumers and head off systemic risks. Keeping state control of a financial sector being eyed by Alibaba and others may be equally important.
5-Star’s softer stance on euro is clever tactic 4 Sep 2017 The radical Italian party sees a referendum on euro membership as a last resort, one of its top lawmakers says. The apparent U-turn could help soothe markets and business before upcoming elections. There’s room to backtrack, but 5-Star is holding up and getting more nuanced.
Pyongyang turns yen into a very strange safe haven 1 Sep 2017 As Kim Jong-un’s missiles fly and Donald Trump threatens to respond, investors are taking cover in the yen. Odd choice, given Japan’s economic challenges and its awkward proximity to the action. That shows a lack of options among traders and complacency about escalating risks.
Italian markets dance anew to Berlusconi discord 23 Aug 2017 Chased out of power in 2011, Silvio Berlusconi is spooking investors with talk of a parallel currency. The ex-PM’s plans look more like posturing than policy. His own finances wouldn’t obviously benefit from Italy leaving the euro. Yet Berlusconi remains too important to ignore.
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.