Commodity Trade Mantra

Posts Tagged ‘FX Market’

Is This How the Next Global Financial Meltdown Will Unfold?

As emerging market currencies decline, income streams needed to service the dollar debt declines: as income & valuations fall, capital flees, pushing the relative value of the currency down even more, which further raises the risk premium which triggers even more capital flight. The sums in play are so staggering, even the Fed won’t be able to stop the financial meltdown.

Will China's Currency Peg Be the Next to Fall?

A pegged currency rises & falls against other currencies along with the underlying currency. As the dollar weakened from 2010 to mid-2014, China’s Renminbi weakened along with it. Now that the USD has gained 16% in less than a year, that’s dragging the RMB / Yuan higher with it, making China’s goods less competitive outside the US.

Welcome To The Currency Wars, China's Yuan Devalues Most In 20 Years

Yuan possesses the very two qualities of a carry trade currency: High onshore interest rates & a gradual but steady appreciation trend. PBoC is capable of altering the second condition & it seems that it’s doing exactly so by reversing the appreciation trend & pushing up the volatility of the yuan.

Emerging Market FX: The Straw That Broke The Carry-Trade's Back

FX Market positioning has played a major role in the significant volatile moves seen in the past week as market volatility appears to have been the straw that broke the carry-trade’s back – for now… as Emerging Market currency returns have notably decoupled from moves in US rates.

The Next Big Rate Manipulation Scandal Is About to Break

The Swiss Financial Market Supervisory Authority (FINMA), according to its website on Friday, is “currently conducting investigations into several Swiss financial institutions in connection with possible manipulation of foreign exchange markets.”

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