Appreciation Of The Brazilian Currency

Forex News and Events: A slew of important developments hit the market and all in all, traders took them as a sign to pare down risk. Initially from the EU summit there was little new information as even European leaders are waiting on the March 9th deadline. However, it was later reported that Eurozone members had actually delayed approval of more than half of the €130bn bail-out for Greece after requesting from Greece more evidence that austerity measures and privatization would be implemented. EU Finance Ministers are now requesting "detailed assessment" by EU and IMF officials by next week before the additional funds will be released. Thursday afternoon, ISDA announced that in regards to Greece's $3.25bn default swaps, there would be no credit event triggered and therefore no payout. ...

Weekly Economic and Financial Commentary U.S. Review The Economy Still Faces Core Issues While it was a fairly light week for economic data, speeches by President Barack Obama and Fed Chairman Ben Bernanke dominated headlines. The president outlined a plan that calls for payroll tax cuts and spending initiatives. Although the proposal could boost growth somewhat, we do not believe it fully addresses the core issues of weak consumer demand and structural unemployment. Fed Chairman Ben Bernanke's speech offered no new surprises, which puts greater weight on the two-day FOMC meeting scheduled in September. The Economy Continues to Grow at Stall Speed While it was a fairly light week for economic data, speeches by President Barack Obama and Fed Chairman Ben Bernanke dominated ...

Weekly Economic and Financial Commentary U.S. Review The Economy Continues to Grow at a Snail's Pace Much of the economic data released during the week continued to show sluggish economic growth. Real GDP was revised down to a 1.0 percent pace in the second quarter from the initially reported 1.3 percent rate. While growth has slowed significantly, it is growth nonetheless. Durable goods orders rose a more-than-expected 4.0 percent in July, which was double the consensus. Non-defense capital goods excluding aircraft fell 1.5 percent on the month, which may suggest weaker growth in business investment in the coming quarter. Searching for Clues of a Looming Downturn Much of the economic data released during the week continued to show sluggish economic growth. In fact, real GDP ...

The Brazilian currency demonstrated a biggest drop against the US dollar this year today, as the government introduced a new tax on FX derivatives investments, and the dollar jumped up against the other major currencies. During the day the Brazil real demonstrated a loss of about 2 percent (before returning to current levels), which is the biggest single-day decrease for this currency in more than 12 months. The Brazil authorities will now charge 1 percent tax on some derivatives operations on the foreign exchange market, which supposedly will curb the demand for the local currency, cooling down its extraordinary fast appreciation rally. Another factor that forced the real down against the US currency was the gain of the latter against the other major currencies today. It followed some ...

(Reuters) - The Chinese yuan will rise 4 percent against the dollar in the coming 12 months, making it the strongest performer among the BRIC country currencies, according to the latest Reuters poll. As the Chinese economy expands with rising foreign exchange reserves, the yuan, also known as the renminbi, is set to extend an uninterrupted rise since it was de-pegged from the dollar just over a year ago. A poll of 36 strategists and analysts, taken mostly before the People's Bank of China (PBOC) raised interest rates for the third time this year on Wednesday, showed the yuan trading at 6.40 in three months, 6.30 in six and 6.20 in 12 months. That compares with 6.45, 6.38, and 6.24 in the previous quarterly BRIC FX poll. BRIC countries have emerged as important players in the global ...

(Reuters) - Latin America is getting the upper hand on inflation that once ravaged the region but central banks in some of Asia's heavyweight economies are having a tougher time. The question of who will win the battle of balancing policy to achieve optimum growth and inflation levels remains an open one, simply because potential price pressures from rising wages and demand are more elevated in India and China than in some of their Latin American peers. But for the moment, Brazil and Chile appear to have done a better job of pacing rate rises and currency appreciation than India and possibly China. "I would say that Latin America has topped India in its inflation fight, but not necessarily China," said Frederic Neumann, managing director and co-head of Asian economics research. "In ...

“I’d feel a little stupid buying these things,” a dear friend of your editor’s recently remarked. “But that’s probably not, in and of itself, a bad thing. After all, I felt pretty stupid buying gold back when it was still $250 per ounce.” Our friend was referring to a peer-to-peer (P2P) cybercrypto currency called bitcoin. What is bitcoin? How is it used? What are the risks? Let’s begin where all good non-Tarantino stories begin…at the beginning. The demand for a totally free market currency arose, naturally, out of the dismal state of the current monetary environment, in which governments around the world systematically debase the value of their printed monies in order to pay for the various welfare-warfare states they promised but can’t possibly afford. The resulting inflation is ...

Yield-hungry investors pouring money into emerging markets and shunning the dollar will not be deterred by a warning from finance leaders at the weekend about the danger of inflation in the developing world. With interest rates in many advanced economies including the United States at record lows, global investors have bid up assets in countries such as China and Brazil, which boast much more rapid growth than the West and offer higher returns. The U.S. dollar has shed more than 5 percent this year against major currencies. It has even lost nearly as much against the tightly managed Chinese yuan and Brazil's real. The wave of incoming money has led to high inflation in emerging markets, prompting countries such as Brazil to use taxes and other capital controls to temper the inflow. ...

(Reuters) - High-yield bonds and U.S. Treasuries top the list of vulnerable assets should the triple disaster of earthquake, tsunami and nuclear breakdown prompt Japanese investors to bring overseas funds back home. Such moves -- which may already be under way, given some of the currency movements of the past few days -- are also likely to sour global merger and acquisition and outward direct investment activity from Japan, one of the top 10 players. The stakes are significant for world financial markets if Japanese investors bring money home to fund reconstruction, which is expected to cost around $180 billion, or around 3 percent of its gross domestic product. "One of the issues when the immediate problem dies down is bringing the funds back home," said Ian Bright, senior economist at ...