Ben W. February 6, 2015 at 3:19am Latest INTEL!! UPDATE is 12:07 AM Pacific Time. UBS cancel transactions of global exchange due to banks meetings in Asia and Iraq? Intel Agent told me: "My Men be prepared tomorrow you will find great news for coming days or even better" Quote.
DinarGrubber >February 6, 2015 at 4:51am Cobra says the Reset will happen when the Event happens and sufficient cabal are arrested, banks closed for 2 weeks for the transition, positive military distributes food, etc. I hope there is an easier way, but if the cabal does go "crazy" at the last minute, we may be in for a few bumps before the good times.
pebbles February 6, 2015 at 8:30am
Ukraine forex market in confusion after bank removes unofficial peg
Feb 6 (Reuters) - A move by Ukraine's central bank to ditch an unofficial peg for the hryvnia has plunged the foreign exchange market into confusion, with buyers of hard currency putting off purchases and sellers holding out for higher levels.
The hryvnia lost 30 percent against the dollar to trade at 24-25 on Thursday after the bank moved closer to a free float by abandoning the foreign currency auctions that had effectively pegged the exchange rate.
On Friday, traders quoted levels ranging from 19.50 to 26.50 hryvnias to the dollar, saying only a few deals had been concluded, with some banks reluctant to even quote a rate, fearing the wrath of the central bank if it was too weak.
"Those who can postpone (having to sell hard currency) are postponing until the last moment, not believing that it (the slide) will stop anytime soon," said one dealer at a major Ukrainian bank.
The dealer said the hryvnia had weakened to around 26.50 a dollar, while another trader said commercial banks were selling dollars to clients in the range of 19.50-21.00 hryvnias.
According to Reuters data, the bid price for dollars had fallen to 19.00 hryvnias by 1110 GMT from 24.50 at the opening, while the offer price moved to 19.50 from 25.50.
Most traders said there was little that could prop up the currency, which has been sliding since February last year, when street protests forced a Moscow-backed president from power.
Since then Russia has annexed the Crimea peninsula from Ukraine and a separatist rebellion has raged in the east, though the French and German presidents were taking a peace initiative to Moscow on Friday following talks in Kiev on Thursday.
The former Soviet state desperately needs funds from donors to fill an estimated $15-billion funding gap to withstand the financial crisis, deepened by a surge in fighting in eastern regions where pro-Russian rebels have seized new ground.
"We are advising customers who need dollars to wait a week if their businesses can wait," the trader at a Ukrainian bank said, adding that then sellers may become more keen to sell dollars at weaker rates. (Writing by Elizabeth Piper; Editing by Timothy Heritage and Pravin Char)
Island Dancer: My Little Chase Bank Story
This evening I was at Chase Bank in my tiny town in So California, doing other than currency business with a personal banker. I had mentioned that I had purchased some Dong from Chase in the past and he asked if I had Dinar too. I said yes, zim too. He was impressed that I had exotic currency and said that he has a long list of customers to call when the RV happends. I told him to call me too! I was surprised by what he had said that there are a lot of dinar holders in my little town. Go RV!!! IslandDancer
RSquared: CNBC just announced an interview with Sec. of Treasury Jack Lew on Monday morning to discuss world currencies.
Appaloosa: RSquared-Now that sounds promising
[Iko Ward :Hey all, just checking in. I think they are testing all over the globe and will tie it up over the weekend. Then it will continue to roll out here.
First us and the other big groups, the selected branches, and then the general public. Makes sense.
BTW...Forex is quiet, not like earlier in the week
Servin29 » February 6th, 2015, 9:39 am •
As a curfew is lifted, Baghdad is at long last partying again LINK
StrongCBM: Steady preparation in the direction to invite the world to party with them.....hmmmm
walkingstick » February 6th, 2015, 10:12 am Money-changers at bay
Monetary policies and falling inflation are behind currency turmoil
Feb 7th 2015
EARLY trade was conducted in whatever currency was available. Coins circulated across borders in a bewildering variety of forms, creating the need for middlemen to value one token against another. These were the “money-changers” whom Jesus threw out of the temple.
Two thousand years later the foreign-exchange markets are still in turmoil. In January the Swiss National Bank abandoned its policy of capping the Swiss franc against the euro, catching many traders and investors by surprise. As the franc rose by 30% in a few minutes, many foreign-exchange brokers lost money (one went bust) and a hedge-fund manager, Everest Capital, lost so much that it had to close its main fund. Eastern Europeans who had taken out mortgages in Swiss francs also suffered—so much so that Croatia voted to peg its currency, the kuna, against the franc.
Other currencies are also under pressure. The Russian rouble has plunged against the dollar in the face of a declining oil price and sanctions by the West. This week the Reserve Bank of Australia unveiled a surprise rate cut, sending the Aussie dollar down to its lowest level against the US dollar since May 2009. Denmark has had to cut interest rates three times, further and further into negative territory, in order to discourage capital inflows that were threatening its peg against the euro.
What is behind this sudden burst of currency volatility, which follows a quiet period in foreign-exchange markets (see chart 1)? In large part, it is caused by a divergence in monetary policy among the big three central banks—the Federal Reserve, the European Central Bank and the Bank of Japan. The Fed has stopped its asset purchases and may even push up interest rates this year. But the BoJ is still implementing a policy of quantitative easing (QE), and the ECB is just about to start one.
These diverging policies reflect economic fundamentals. The American economy is growing at a decent rate; both Japan and the euro zone are struggling to generate a sustainable recovery. Like Japan, the euro zone is teetering on the brink of deflation. Helpful though it is to consumers, the recent fall in the oil price has sent the euro area’s headline inflation rate negative. Lower inflation is causing central banks around the world to ease policy: 12 have done so since the start of November.
In such circumstances, a lower exchange rate is often one of the goals of monetary policy. Since the start of 2014, the yen has fallen by 11% against the dollar and by 17% against the euro. A weaker currency makes life easier for exporters (boosting the economy) and also pushes up import prices (making deflation less likely). But foreign-exchange markets are a zero-sum game: for one currency to fall, another must rise. A country with a rising currency will be tempted to seek a depreciation of its own, for fear of importing the deflation that others are trying to offload.
Foreign-exchange volatility can also cause problems for companies and investors. That is why the world used to favour fixed exchange-rate systems (such as Bretton Woods, which operated from 1944 to the early 1970s). It is also why many countries still choose to peg their currencies to the dollar or the euro. With the dollar rising and the euro falling, pegging countries have to follow suit. That may require tightening monetary policy in dollar-bloc countries and weakening it in the euro bloc (hence all those Danish rate cuts).
Pegs produce stability in the short term. Countries can use them to bolster the credibility of their economic plans. When Argentina was trying to shake off the hyperinflation of the 1970s and 1980s, it adopted a currency board that kept the peso at parity with the dollar. Britain joined the European exchange-rate mechanism (ERM) in 1990 in the hope of importing some of Germany’s inflation-busting success.
But pegs have a number of problems. The first is that other economic goals need to be subordinated to the exchange rate. That may not be a problem if the economy with the peg is closely tied to the one its currency is pegged to: monetary-policy changes in the one will be appropriate in the other. But that was not the case with Britain and Germany in the early 1990s: the tightening needed to keep the pound in the ERM proved too painful for the British economy to bear.
In the era of the classical gold standard, in the late 19th century, nations were governed by men drawn from the creditor classes. It was no surprise that sound money was their priority. But in an era of mass democracy, that is no longer the case. Few voters care about the exchange rate, but they do care about borrowing costs and jobs. Markets know this, giving them an incentive to attack pegs that lack credibility.
A second problem with pegs relates to the way that exchange rates are set. One theory, called purchasing-power parity, holds that currencies will move in line with the prices of tradable goods. If one country has a higher inflation rate than another, its goods will become more expensive and it will lose market share. If that happens, its currency should fall until prices are back in line. Our rough measure of currency values, the Big Mac index, reflects this logic. But as chart 2 shows, currencies can deviate quite a long way from their apparent fair value and stay there.
One reason for this divergence is the effect of investment flows. Most currency transactions have little to do with exports and imports. The daily value of world goods trade in 2013 was $52 billion; daily foreign-exchange turnover in the same year was $5.3 trillion, a thousand times larger. Investors are forever switching from one currency to another in search of a better return. A common tactic is the “carry trade”, borrowing money in a currency with a low interest rate and investing the proceeds in a country with a higher one. Such huge flows of money make it harder to maintain pegs. The ultra-low rates that pegs such as Denmark’s require risk inflating asset bubbles; house prices there are rising. Negative rates can also cut into banks’ net interest margins.
A related issue is that companies and banks in the pegging country may borrow in the target currency, particularly if it offers lower rates. If the peg breaks, such companies may get into deep financial trouble, since the cost of repaying foreign debts will soar.
That problem was at the heart of the Asian crisis of the late 1990s, when many tiger economies suddenly saw their currencies fall against the dollar. The episode echoed the “third-world debt crisis” of the 1980s, when many countries (mostly in Latin America) struggled to pay back their dollar debts. Both episodes occurred in the middle of strong dollar runs. So if the dollar is at the start of another bull market, as many commentators believe, there could be even more volatility ahead.
Where might it occur? Many Asian countries operate with trading bands against the dollar rather than targeting a specific rate. Singapore has already made an adjustment to its band, allowing its currency to weaken against the dollar to make sure its exports stay competitive. Other Asian countries may follow suit, largely by lowering interest rates. They have plenty of scope to do this since lower commodity prices have reduced inflation and improved their trading positions.
The big question is what China will do. After many years in which the yuan steadily appreciated against the dollar, markets expect a small depreciation in 2015. The Chinese have a fine line to tread: they will not want to lose competitive ground to their neighbours but, given their trade surplus, too aggressive a depreciation would annoy many Americans. The tectonic plates are shifting in the world economy, subducting some currencies and thrusting up others. But a few old grievances are unshakeable.