The future movements of the Chinese yuan have been one of the most hotly debated issues in the global economy for many years. The initial 2.1% revaluation of July 21, 2005, after a decade at CNY8.28/US$, was almost as eagerly awaited as the release of the first Star Wars prequel, and like the latter, it [Read more...]

Business Monitor’s bullish stance on a host of emerging market (EM) currencies in recent quarters reflects one of our core macroeconomic assumptions, namely that unprecedented quantitative easing and loose fiscal policy measures in the US in 2009 would ultimately foster significant depreciatory forces for the US dollar. While this may not be visible in the [Read more...]

 

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Risk Watchdog’s long-held view that the bolivar would sooner or later have to be devalued has finally materialised, with President Hugo Chávez on January 8 announcing the introduction of a dual exchange rate system.

Bolivars will now officially be exchanged for dollars at two rates, VEF2.6000/US$ and VEF4.3000/US$, as opposed to the VEF2.1500/US$ peg that had [Read more...]

US President Barack Obama, en route to ‘Asia’ (I use the speech marks, because Asia is so diverse and it is inaccurate to consider it a single entity), has no shortage of issues to deal with when he gets there. There seems to be a general feeling that US influence in Asia is on the [Read more...]

Let’s rewind two years, to a time before ‘credit crunch’, ‘quantitative easing’, ‘TARP’ or ‘staycation’ had entered the popular vocabulary. I’m talking about a time in which the term ‘currency manipulator’ was part of the zeitgeist of US-China economic relations. Today, G20 summits come and go without this phrase, which once seemed almost ubiquitous, being [Read more...]

In keeping with a view Business Monitor International (BMI) has been promoting for some time, the Australian dollar is looking good against a number of regional currencies. Though I have already spoken of its relative value against the euro, I think the Aussie also looks particularly attractive against the Japanese yen. Consider the following chart:[caption [Read more...]

Venezuela’s headline consumer price inflation edged down for a fourth consecutive month in January, falling to 30.7% y-o-y from its peak of 36.0% y-o-y in September. Despite the decline, Venezuela’s inflation outlook remains grim. In fact, since the headline rate hit its peak, the month-on-month inflation figures have actually pushed higher. In short, don’t be [Read more...]