Tag Archives: dollar

BRICS surpasses the G7, accounting for 31% of the global economy

President-Vladimir-Putin

Important Takeaways:

  • De-dollarization is irreversible – Putin
  • BRICS will become economically more powerful than the G7, the Russian president said in an address to the Johannesburg summit
  • The US dollar is losing its global role in an “objective and irreversible” process, Russian President Vladimir Putin told participants at the BRICS summit in South Africa on Tuesday. Vladimir Putin spoke via video link, after choosing not to attend the event in person.
  • De-dollarization is “gaining momentum” Putin declared, adding that members of the group of major emerging economies are seeking to reduce their reliance on the greenback in mutual transactions.
  • The Russian leader claimed the five BRICS members – Russia, China, India, Brazil and South Africa – are becoming the new world economic leaders, adding that their cumulative share of global GDP has reached 26%.
  • He noted that if measured by purchasing power parity, BRICS has already surpassed the Group of Seven leading industrialized nations – accounting for 31% of the global economy, compared to 30% for the G7.

Read the original article by clicking here.

Dollar drops sending European currency on a spike, especially the Swiss Franc

Revelations 13:16-18 “Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. This calls for wisdom: let the one who has understanding calculate the number of the beast, for it is the number of a man, and his number is 666.”

Important Takeaways:

  • Dollar’s Epic Drop Sends Franc and Yen Surging as Traders Weigh Fed Path
  • A 14-month low in the US dollar rippled through global currency markets as traders consider the impact of cooling US inflation on the Federal Reserve’s most-aggressive tightening cycle in a generation.
  • The Swiss franc rose to the strongest level since 2015 against the US currency, while Japan’s yen climbed more than 1% on the day to consolidate its gains below 140 per dollar. The euro spiked to $1.11, and the British pound touched $1.30 — both hitting their strongest levels in more than a year

Read the original article by clicking here.

Argentina enhances deal with China; further diminishes role of the dollar

Revelations 13:16-18 “Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. This calls for wisdom: let the one who has understanding calculate the number of the beast, for it is the number of a man, and his number is 666.”

Important Takeaways:

  • Argentina Shuns U.S. Dollar: Will Pay for China Imports in Yuan
  • The measure, driven by Argentina’s leftist President Alberto Fernández, is designed to relieve the South American country’s dwindling dollar reserves, AP reports.
  • The deal further enhances China’s rise on the world stage and the diminished role of the U.S. on a host of fronts under President Joe Biden.
  • After reaching the agreement with various companies, Argentina will use the yuan for imports from China worth about U.S.$1.04 billion from next month, accelerating trade with China as Beijing seeks to gain a further foothold in South America.
  • In November last year Argentina expanded a currency swap with China by $5 billion in an effort to increase its yuan reserves.
  • It has also been working hard to build a relationship with Beijing after having officially joined China’s infrastructure-building Belt and Road Initiative (BRI) last year.

Read the original article by clicking here.

De-Dollarization begins and France leads the way for Europe to follow

Revelations 13:16-18 “Also it causes all, both small and great, both rich and poor, both free and slave, to be marked on the right hand or the forehead, so that no one can buy or sell unless he has the mark, that is, the name of the beast or the number of its name. This calls for wisdom: let the one who has understanding calculate the number of the beast, for it is the number of a man, and his number is 666.”

Important Takeaways:

  • France brings de-dollarization to Europe by trading in yuan
  • Following news that Brazil and China agreed to trade in their local currencies, it emerged that a French company charged the export of liquefied gas (LNG) to China National Offshore Oil Corporation in the Chinese yuan. This is another sign that the inexorable process of de-dollarization has gained momentum and even spread to the European Union.
  • This should not be surprising given the difficult economic situation across the EU, meaning that companies will look after their own interests above all. None-the-less, the media has already characterized the transaction between the Chinese company and Total Energy in yuan as historic.
  • Meanwhile, the dollar, which once accounted for 70% of foreign exchange reserves, has now fallen to 59%. The process is ongoing, and will take a long time, but it cannot be halted. One of the initial goals of the BRICS association was de-dollarization.
  • The Chinese insist on payments in the yuan so that it becomes a reserve with the same respect as the dollar, Swiss franc, euro, and yen.

Read the original article by clicking here.

Saudi’s ditching US dollar for the Yuan?

Saudi Arabia

Revelations 18:23:’For the merchants were the great men of the earth; for by thy sorceries were all nations deceived.’

Important Takeaways:

  • Saudi Arabia Is Open To Discuss Non-Dollar Oil Trade Settlements
  • In Davos, Saudi Arabia’s Minister of Finance Mohammed Al-Jadaan surprised the world’s oil industry by saying that they are open to the possibility of conducting oil trade in a currency other than the US dollar.
  • “There are no issues with discussing how we settle our trade arrangements, whether it is in the US dollar, whether it is the euro, whether it is the Saudi riyal,” he said. This is another blow to the dominance of the dollar in world trade.
  • However, Saudi Arabia is willing to deepen its strategic cooperation in oil trade with China, the world’s largest crude oil importer.
  • Last month, China and Saudi Arabia agreed to expand crude oil trade as they upgraded their relations to a strategic partnership during the visit of Chinese President Xi Jinping in the Saudi capital Riyadh.
  • China, for its part, plans to make its own currency, the yuan, more prominent in international oil trade.
  • During a visit to Saudi Arabia last month, Xi Jinping pledged to ramp up efforts to promote the use of the yuan in energy deals, suggesting at a summit in the Saudi capital that the Gulf Cooperation Council (GCC) countries should make full use of the Shanghai Petroleum and Natural Gas Exchange to carry out its trade settlements in yuan.

Read the original article by clicking here.

Russia wants gold as standard, says no longer interested in the dollar

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Russia just made a case for owning gold — and nobody noticed
  • Much more interesting was Zavalny’s main point, even though it has been mostly overlooked. If other countries want to buy oil, gas, other resources or anything else from Russia, he said, “let them pay either in hard currency, and this is gold for us, or pay as it is convenient for us, this is the national currency.”
  • “The dollar ceases to be a means of payment for us, it has lost all interest for us,” Zavalny added, calling the greenback no better than “candy wrappers.”
  • If Russia’s lead is followed by countries such as China, India and others — countries that may not welcome Washington’s ability to control the global financial system through its monopoly power over the global reserve currency.

Read the original article by clicking here.

Putin says no longer do we trust Euro or Dollar

Rev 6:6 NAS And I heard something like a voice in the center of the four living creatures saying, “A quart of wheat for a denarius, and three quarts of barley for a denarius; and do not damage the oil and the wine.”

Important Takeaways:

  • Putin demands ‘unfriendly countries’ pay for Russian gas in rubles
  • “I have decided to implement … a series of measures to switch payments — we’ll start with that — for our natural gas supplies to so-called unfriendly countries into Russian rubles,”
  • Putin said in a televised government meeting, adding that trust in the dollar and euro had been “compromised” by the West’s seizure of Russian assets.
  • Moscow also recently added the U.S., the United Kingdom and the entire European Union to its growing list of “unfriendly countries.”

Read the original article by clicking here.

Dollar drops on disappointing U.S. inflation data

Dollar drops on disappointing U.S. inflation data

By Karen Brettell

NEW YORK (Reuters) – The U.S. dollar weakened on Wednesday after consumer price data showed sluggish inflation, adding to concerns the Federal Reserve will be less able to execute multiple rate increases next year.

Excluding the volatile food and energy components, consumer prices ticked up 0.1 percent in November, with the annual increase in the core CPI slowing to 1.7 percent in November from 1.8 percent in October.

“The focus is on the core measure of inflation, that came in weaker than the market expected,” said Vassili Serebriakov, a foreign exchange strategist at Credit Agricole in New York.

The dollar index against a basket of six major currencies <.DXY> dropped to 93.888, down 0.23 percent on the day.

The weak data comes before a widely expected rate hike on Wednesday, when the U.S. central bank concludes its two-day meeting.

“It will probably reinforce the caution of the committee members that are concerned that the Fed is falling short of its inflation target,” Serebriakov said. “It also supports our view that the Fed will be fairly gradual next year.”

The Fed will announce its decision on rates at 1900 GMT on Wednesday followed by a statement. Chair Janet Yellen will hold a news conference at 1930 GMT.

The Fed on Wednesday may also give its strongest hint yet on how the Trump administration’s tax overhaul could affect the U.S. economy.

Investors will pay close attention to how the central bank aims to balance a stimulus-fueled economic boost with the ongoing weak inflation and tepid wage growth that has curbed some policymakers’ appetite for higher rates.

President Donald Trump’s legislative agenda may be harder to push through, however, following Tuesday’s victory by Democrat Doug Jones in the bitter fight for a U.S. Senate seat in deeply conservative Alabama.

(Additional reporting by Saikat Chatterjee in London; Editing by Nick Zieminski)

Global stocks dip on U.S. tax reform doubt; no respite in havens

Global stocks dip on U.S. tax reform doubt; no respite in havens

By Trevor Hunnicutt

NEW YORK (Reuters) – Global stock indexes and the U.S. dollar cooled off Friday as signs that U.S. tax reform could be delayed impeded the market’s momentum.

MSCI’s global stock index <.MIWD00000PUS>, which tracks shares in 47 countries, declined 0.15 percent, slipping further from a record level. On Thursday, the global index fell 0.4 percent following 10 straight days of gains. The dollar index <.DXY>, too, fell 0.06 percent.

The MSCI world index surged more than 20 percent so far this year, and some investors believe a pullback is due.

“The pause that the market is currently in is directly related to what’s going on from a tax standpoint,” said Jim McDonald, chief investment strategist for Northern Trust Corp.

Adding insult to injury, the pullback in stocks as well as softness in high-yield “junk” bonds this week did little to support traditional safe havens.

Benchmark 10-year U.S. Treasury notes <US10YT=RR> fell 21/32 in price to yield 2.4037 percent. The 30-year bond <US30YT=RR> fell 50/32 in price to yield 2.8845 percent. [US/]

Meanwhile, German government bond yields climbed to their highest in over a week as euro zone bonds were sold across the board for a second consecutive day. The yield on Germany’s benchmark 10-year government bond <DE10YT=TWEB> hit 0.40 percent for the first time since Oct. 27.

Spot gold <XAU=> dropped 0.7 percent to $1,275.61 an ounce. Gold pays no interest, so demand for it wanes when bonds offer higher yields. [GOL/]

Citigroup Inc equity trading strategist Alex Altmann said it is rare for government bonds and equities to be hit at the same time.

“It’s a classic hallmark of momentum strategies unwinding,” he said, referring to a investment strategy that favors buying recent winners and selling losers.

“We may not get that calm ride into the end of the year.”

Coal producer Canyon Consolidated Resources became the second junk-rated company to pull a bond sale this week, on Friday, capping a bout of volatility in credit markets.

TAX OVERHAUL

U.S. Republican senators said they wanted to slash the corporate tax rate in 2019, later than the House’s proposed schedule of 2018, complicating a push for the biggest overhaul of U.S. tax law since the 1980s.

The House was set to vote on its measure next week. But the Senate’s timetable was less clear.

“I would say a compromise will be reached,” said Hirokazu Kabeya, chief global strategist at Daiwa Securities.

“But if they indeed decide to delay the tax cut by a year, there is likely to be some disappointment.”

Wall Street retreated a bit on concern over delays in corporate tax cuts, which would hike profits, though a rise in some media and industrial stocks limited the slide. [.N]

The Dow Jones Industrial Average <.DJI> fell 39.73 points, or 0.17 percent, to 23,422.21, the S&P 500 <.SPX> lost 2.32 points, or 0.09 percent, to 2,582.3 and the Nasdaq Composite <.IXIC> added 0.89 point, or 0.01 percent, to 6,750.94.

The pan-European STOXX 600 <.STOXX> index suffered its worst week in three months, down 0.4 percent on Friday and falling for a fourth day in row. [.EU]

“There’s a feeling out there that there’s a long-awaited correction, and no one wants to be caught by surprise,” said Emmanuel Cau, global equity strategist at JPMorgan Chase & Co.

Crude was down as expectations the Organization of the Petroleum Exporting Countries and other producers will extend their production cut agreement were offset by U.S. drillers adding the most oil rigs in a week since June, indicating output will continue to grow. [O/R]

U.S. crude <CLcv1> fell 0.56 percent to $56.85 per barrel and Brent <LCOcv1> was last at $63.61, down 0.5 percent on the day.

Bitcoin <BTC=> dropped below $7,000 on Friday to trade more than $1,000 down from an all-time high hit on Wednesday, as some traders dumped it for a clone called Bitcoin Cash.

(For a graphic on ‘Major MSCI Indexes Price Performance YTD’ click http://reut.rs/2zqsj4B)

(Additional reporting by Kit Rees and Helen Reid in London and Hideuyki Sano in Tokyo; Editing by Jennifer Ablan and James Dalgleish)

Dollar weakened by worries over delay to hoped-for cut in U.S. company taxes

Dollar weakened by worries over delay to hoped-for cut in U.S. company taxes

By Saqib Iqbal Ahmed

NEW YORK (Reuters) – The dollar slipped against a basket of currencies on Friday and was set for its biggest weekly drop in a month as investor disappointment that implementation of part of a planned big U.S. tax overhaul may be delayed until 2019 put a brake on the currency’s recent rally.

The dollar index <.DXY>, which tracks the greenback against six major currencies, was down 0.08 percent at 94.37. For the week, the index was down 0.6 percent, on pace for its worst performance since the week ending Oct. 13.

The greenback has also lost 0.5 percent against the Japanese yen this week.

U.S. Senate Republicans unveiled a tax plan on Thursday that differed from the House of Representatives’ version on several fronts, including deductions for state and local taxes, and the estate tax.

Complicating a Republican push for the tax revamp, senators said that, like the House, they wanted to slash the corporate tax rate to 20 percent from 35 percent, but in 2019 rather than right away.

“It just highlights the challenge in reconciling the two (plans),” said currency strategist Erik Nelson of Wells Fargo Securities in New York.

The House was set to vote on its measure next week after its tax-writing Ways and Means Committee approved the legislation on Thursday along party lines, with Democrats united in opposition.

The Senate’s timetable was less clear, with a formal bill yet to be drafted in that chamber, where Republicans have a much smaller majority and a narrower path to winning approval for any legislation, let alone one as contentious as a tax package.

“I think the markets are becoming concerned that this is not a serious piece of legislation and that there really is no political support necessary to pass it,” said Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York.

The dollar index gained about 3 percent from mid-September through the end of last week, boosted by hopes of tax cuts.

“This week was a bit of a reality check for currency markets,” Wells Fargo’s Nelson said.

Sterling closed the week on firmer ground, climbing around half a percent against the dollar on Friday as better-than-expected data on British industry and rising confidence in the progress of Brexit talks supported the currency.

The pound was up 0.37 percent at $1.3197.

(Reporting by Saqib Iqbal Ahmed; Editing by Lisa Von Ahn and Frances Kerry)