The BRICS are better off disbanding than expanding 31 Jul 2023 Developing countries are understandably unhappy that rich nations don’t address their needs. But they won’t get much from a club including giant China and near-pariah Russia. Brazil, India and other emerging economies might achieve more by creating a new group, says Hugo Dixon.
Peak US interest rates will weaken dollar quicker 26 Jul 2023 The Fed’s latest hike should be the last, based on how investors are trading. Higher inflation elsewhere and slower increases by other monetary authorities suggest divergent policies will persist. Similar conditions that turbocharged the greenback are set to reverse thrust.
Russian crude imports expose India forex struggle 18 Jul 2023 The UAE is the Modi administration’s new target as it tries to make the rupee a global trading currency. Sanctions-hit Russia wasn’t keen, so refiners like Indian Oil have to settle deals with Moscow in yuan. New Delhi has yet to show it’s offering more than a speculative bet.
Capital Calls: Digital euro, Thames Water 28 Jun 2023 Concise views on global finance: Brussels is in a new push to convince EU member states and the European Parliament to endorse a digital euro; Britain’s Thames Water could be placed into special administration.
Crypto is dead: long live crypto! 16 Jun 2023 Already reeling from fraud and falling prices, cryptocurrencies suffered a fatal blow with US charges against two leading exchanges. Yet Felix Martin argues that the demise of speculative digital tokens may help revive their original purpose as private global currencies.
Erdogan part three would be worse and the same 18 May 2023 The Turkish president is in a heated battle to lead the battered country. In this Viewsroom podcast, Breakingviews columnists discuss the risks Turkey faces if he stays in office, his rival’s offering and how the outcome of the election will impact the rest of the world.
Digital “Chicago Plan” fixes many financial woes 28 Apr 2023 In the 1930s, economists drew up a radical blueprint to create safer banks. The advent of digital currencies issued by central banks is an opportunity to revisit the idea, writes Edward Chancellor. A shift could stabilise banking, reduce inflation, and even lower government debt.
Dollar bulls are praying for a mild downturn 26 Apr 2023 The greenback has lost 14% versus the euro since September, as investors bet on Europe’s recovery and China’s reopening. Inflation and interest rate trends still favour the single currency. The best hope for the buck is a minor economic slowdown to boost its safe haven status.
Sterling’s safe haven status will prove fleeting 6 Apr 2023 Investors have piled into the pound since the start of troubles at US banks, pushing it 5% higher against the dollar. Yet easing turmoil stateside will lead markets to fret more over UK issues: a probable recession, dire long-term growth, and a likely dovish central bank.
Why the dollar keeps winning in the global economy 28 Feb 2023 The greenback’s share of foreign exchange reserves is at 59%, a two-decade low. Challengers to its role as the world’s means of exchange abound. Yet the globalised financial system bolsters its lynchpin status. Absent major shifts in capital flows, the U.S. currency will thrive.
How investors can profit from Fed-ECB divergence 7 Feb 2023 As America flirts with a recession, the U.S. central bank is set to stop tightening as interest rates near 5%. That will leave ECB President Christine Lagarde as the West’s most hawkish policymaker. The transatlantic split is an opportunity for traders who bet on European assets.
Britcoin flags promise of cashless world, and risk 7 Feb 2023 The UK plans to make up for being a late e-money adopter by widening access to its digital currency plan. Right now banks are the main way to access physical cash, but online equivalents could be more widely distributed. The business of money could get messy.
Three carry trades for a new monetary policy era 27 Jan 2023 Central banks’ moves mean that investors borrowing money in yen and placing it in U.S. assets – a once-popular “carry trade” – are no longer onto a sure-fire winner. They can do better by shorting the euro and investing in Mexico, Brazil or Hungary.
Capital Calls: British jolt 17 Jan 2023 Concise views on global finance: The collapse of UK battery group Britishvolt leaves a gaping hole in the country’s auto manufacturing sector.
Expansionist dreams threaten ECB digital euro plan 17 Jan 2023 As the European Central Bank develops its own online currency, politicians want a big say. Hostility from some rubs against the ECB’s cautious enthusiasm. Yet if political forces push a digital euro to be more global than the ECB is ready for, it may weaken financial stability.
Ackman’s Hong Kong short is logical, not likely 24 Nov 2022 The hedge fund boss is wagering the local currency’s dollar peg will snap. The economic case is stronger than during his last try in 2011: the peg is forcing rate hikes even as the highly-leveraged city’s economy contracts. But the risks of alternatives might stay Beijing’s hand.
Japan lives at the bleeding edge of good enough 11 Nov 2022 Energy costs are spiking, the currency plunging, the population aging. Growth is meh. Tokyo, afraid of being left behind, is trying to compete with Silicon Valley. Yet returns on innovation may be overestimated. The country’s biggest problems are a matter of will, not patents.
Hong Kong’s steep slide shows misplaced priorities 1 Nov 2022 Economic activity plunged 4.5% in the third quarter as consumers and companies slashed spending. The government is trying to rally support for fintech and finance, but appears to have no clear plan to help mundane sectors like real estate and retail which are the biggest drags.
Delusions of grandeur are root of Britain’s chaos 21 Oct 2022 “Trussonomics” followed hot on the heels of Brexit. Both are symptoms of a country that hasn’t fully come to terms with the loss of its empire, says Hugo Dixon. If the UK now realises it can’t defy the laws of economics and geopolitics, it may emerge wiser albeit weaker.
UK still two U-turns away from financial stability 14 Oct 2022 Prime Minister Liz Truss sacked her finance minister after less than six weeks because his unfunded tax cuts roiled markets. She will now attempt a more fiscally sound approach. But her party may decide it needs another leader, while voters may prefer a change of government.