Vincent Chan via Caixin | The Hong Kong dollar has been under pressure recently. On January 20, the value of the currency plunged to an eight-year low of 7.8228 to the U.S. dollar. Meanwhile, the stock market’s benchmark Hang Seng Index fell 3.8 percent from the previous day to 18,886.3, the lowest level in 42 months.
Keith Weiner via TrumanFactor | Unless you’re living under a rock, you know that we have an administered interest rate. This means that the bureaucrats at the Federal Reserve decide what’s good for the little people. Then they impose it on us. In trying to return to freedom, many people wonder why couldn’t we let the market set the interest rate. After all, we don’t have a Corn Control Agency or a Lumber Board (pun intended). So why do we have a Federal Open Market Committee? It’s a very good question.
The euro started off the week trading momentarily below 1,06 dollars, its lowest exchange rate since mid-April and bringing it ever nearer to parity with the “green back.” The question being asked by many investors now is whether the euro will achieve parity with the dollar in 2016. There are all sorts of forecasts, but the current majority opinion is that the euro has very little downside left.
From July 2014 to date, the dollar has risen by 17% and this increase is one of the reasons why the U.S. economy registered paltry growth of only 2% y-o-y in the third quarter. But the market thinks that the strong dollar is here to stay and it is becoming a factor that US policymakers must consider.
Ofelia Marín- Lozano | The close to 40% drop in raw material prices over the last year has been taken as an unmistakable sign of a strong slowdown in China, auguring a very negative outlook for producing countries. But the market has seen that the alarm bells sounded over China have been clearly unfounded, as major global companies like Apple are still seeing high levels of sales in the country.
Yang Gang via Caixin | China also has second-most household wealth after the United States, according to an annual report by researchers at Credit Suisse Group, a leading global financial services company.
MADRID | March 15, 2015 | By JP Marín Arrese | The markets have discounted an unchallenged drift upwards of the US currency, after the ECB embarked on its ambitious asset-buying scheme. Yet few anticipated the move might come so soon and reach such a rapid pace. As the Euro turns its retreat into a disorderly rout, emerging economies like Brazil are falling under unbearable pressure. The dollar’s swift upsurge has pounded global markets.
ZURICH | UBS analysts | The recent general strength of the dollar has a bearing on commodity prices, clearly. Commodities are universally priced in dollars, and as homogenised products dollar appreciation should lead to a decline in commodity prices in dollar terms. However, the strength of the dollar against sterling (in 2008/9) or against the yen (sporadically since 2012) did not lead to UK or Japanese exporters cutting the dollar price of their manufactured products or services.
WASHINGTON | By Pablo Pardo | Do you want a Who’s Who of the Republican talking heads? If so, go to this list. Those are the luminaries that asked the Federal Reserve not to go ahead with the Quantitative Easing in 2010, for fear of inflation and currency debasement. Four year later, inflation is nowhere to be seen, and, according to the IMF, the US dollar has strengthened its role in the monetary system.
By Miriam L. Campanella via Caixin | The supply of U.S. dollars in the global economy is set to shrink, and the yuan could fill the void if Chinese leaders and international monetary institutions are prepared to act