Investing Archives - Page 15 of 80

The BOE Meets This Week, but Likely Won’t Help the Pound

A subdued Chinese session, with the yuan, little changed and local equities securing minor gains, let market participants look elsewhere for directional cues. The new lows in oil, near $30 a barrel, and the bankruptcy filing of Glencore’s US subsidiary Sherwin Alumina seemed to weigh on the dollar-bloc currencies.

However, sterling has the distinction of being the weakest of the majors. It is off about 0.4% near midday in London following disappointing BRC sales (0.1 vs. 0.5% expectations) and then a dreadful industrial production report.

When Currency Manipulation is not the Answer

The broad measures of the US dollar are trending higher, and former Fed Chair Bernanke recently refuted claims the US was engaged in a currency war. Many observers had thought that with its unprecedented asset-purchase program, the BOJ was engaged in a currency war. However, the yen has been the strongest major currency over the past six months, and its export volumes are contracting on a year-over-year basis.

Speculators Surprisingly Add Exposure

Due to the holidays, the CFTC has been releasing its Commitment of Traders report late. With this week’s report, the normal Friday release schedule resumes. The latest report covers the shortened week through January 5. It is not surprising to find that speculative position adjustments were minor.

There was only one gross position adjustment of more than 8k contracts, and that was the long yen. Speculators increased their holdings by half to 67.5k contracts from 45k.

Yeah, I’m the (Bitcoin) Taxman

Bitcoin enthusiasts have recently been roiled by claims that an Australian named Craig Wright and his deceased partner are the mysterious founders behind the cryptocurrency.

Could Gold be Forming a Bottom?

With equity markets tumbling, escalating tensions between a Saudi-led Sunni bloc against Iran, ongoing hostilities in Syria, North Korea testing what it claims to be a hydrogen bomb, the once precious yellow metal is looking perky.

Gold recorded a six-year low in early December (on the same day the euro fell to $1.0525 when the ECB met). That low (~$1046.45) retested a fortnight later (~$1047.75). Between the two lows, gold reached almost $1089. If this is a double bottom, the minimum measuring objective is near $1132.

The Yen Flexes Some Muscle

Last year was the fourth consecutive year that the yen fell against the dollar. However, obscured by this factoid is that over the past six months, the yen has been the strongest of the major currencies, rising almost 3.2% against the US dollar.

Latin America Investing in 2016

Latin America has quickly become the new go-to spot for investors, with even the country of China having pledged a sum of $250 billion within the next ten years.

Nudging China Toward Greater Financial Liberalization through the SDR

The IMF decided on 30 November 2015 to include China’s currency, the renminbi (RMB), in the elite basket of reserve currencies that determine the unit value of Special Drawing Rights (SDR). The IMF uses the SDR to supplement member states’ official reserves. Although the media has touted the inclusion of the RMB as a giant step forward for China’s international economic standing, its symbolism far outweighs the actual significance of the decision.

The Dollar Wins over the Euro and Yen

The US dollar will finish 2015 higher against both the euro and yen. Sometimes those of us who follow the economic and financial news closely can be caught up with the short-term fluctuations. As traders, that is what we do. Investors, however, can take a longer look at developments.

Taking a step back, we note that this is the fourth consecutive year that the yen has fallen against the dollar. The greenback closed 2011 near JPY77. It will likely finish this year near JPY120.

U.S. Government Agencies Create New Mortgage Derivatives

Two mortgage firms largely under government control create a new financial instrument similar to those that caused the global financial crisis of 2008. Fannie Mae and Freddie Mac, two mortgage loan companies that provide government-guaranteed mortgages to American homebuyers, announced a new financial instrument that it hopes would offset risks in the financial market.

Both firms, which are government-sponsored enterprises, are producing two new derivative instruments based on collected mortgages that will theoretically reduce risk to American taxpayers.