Investing

There are conflicts among the many objectives shaping China’s exchange rate policy. Politically, China’s leaders are keen on having the renminbi become a major international currency. For this purpose, the renminbi needs to be strong and stable enough that others...

The US dollar sold off in response to the Fed's lack of action, but it rebounded to close firmly before the weekend.  For the week as a whole, it was mixed.  The Australian and New Zealand dollars were the strongest...

The verdict on China’s recent currency devaluations differs depending on to whom you listen. To some, the devaluations are either a positive and responsible step in the direction of a more market-determined exchange rate and a liberalised financial system. To...

When China engineered a mini-devaluation of the yuan in August, it succeeded in closing the prior gap between the fix (central reference rate) and the spot onshore yuan.  One of the prices of doing so, however, was the widening of...

There are three key developments today. After seemingly spending recent months pursuing a controversial political agenda, Japan's Abe has returned his attention to the economy to propose corporate tax cuts. This lifted the Nikkei a stunning 7.7%.  The UK industrial...

According to Dan Steinbock, the internationalisation of the renminbi is accelerating. The inclusion of the yuan in the IMF basket of reserves is now a matter of time. On August 11, the People’s Bank of China (PBOC) adjusted the exchange rate...

The US dollar has been on a roller coaster ride. Many have lost confidence in the underlying trend.  An important prop for the dollar, namely the prospects for the Fed's lift-off, extends again, this time ostensibly due to the heightened...

East Asian financial cooperation is at a crossroads. The Chiang Mai Initiative Multilateralisation (CMIM) and its surveillance unit — the ASEAN+3 Macroeconomic Research Office (AMRO) — are continuing to grow in size and importance. But the structure of these two...

US 10-year Treasury yield has risen 30 bp since Monday's low water mark.  There are a number of reports that are trying to link the back up in US yields to sales by China. The Chinese sales, in turn, link...

The redback’s managers excel in catching the currency markets off-guard. In January 1994, China unified its dual exchange rate system by aligning the official rate to the market rate and pegging the yuan to the dollar tightly thereafter. Since 85...

The gyrations in the foreign exchange market spurred by the panicked response to Chinese machinations may have been the last spasm before the summer doldrums grip the dollar. The Dollar Index had its worst week in nearly two months, but...

The tax treatment of digital currencies is a challenge for governments around the world, as it is for other aspects of the “disruptive” digital economy. In October 2014, the Commonwealth Senate Economics Committee launched an inquiry into digital currencies. The...

The price of gold rallied by about 5.25% off the five-year low set in late-July near $1172 an ounce  to the high set earlier today.  More than half this rally took place this week, seemingly in response to the heightened...

It is understandable.  China's move on Tuesday caught the market off-guard.  After seemingly re-pegging the yuan to the dollar, it pushed it reset the yuan to the lower end of its 2% band and announced a new mechanism that seems...

Not so long ago, gold rose to new highs. Recently, it has suffered the most challenging losses since 1999. The Fed’s rate hikes do not bode well for the gold in the near term, but what about in the medium-term?...