The dollar was steady in the run in to the Federal Reserve’s policy statement later in the day, with an almost one percent fall this week showing minimal expectations the Fed will ramp up its forecasts for future rises in interest rates.
- Dollar Wavers Ahead of Fed Meeting – Wall Street Journal (subscription)
- Fed up: European Markets Dip Ahead of US Rates Decision – Financial Times (subscription)
The foreign exchange markets have factored in a 25 basis point rate hike from the US Federal Reserve.
As the US dollar surges to multiyear highs, currencies pegged to the greenback, from Saudi Arabia to Hong Kong, are under pressure.
The pound strengthened the most among Group-of-10 currencies after data showed UK inflation accelerated to the fastest pace in more than two years.
Market participants are concerned the global swaps market could further fragment with the creation of a third liquidity pool in the case of a hard Brexit.
A closely-watched borrowing rate in Hong Kong rose again as China’s offshore exchange rate continued to suggest investors expected further depreciation for the Chinese currency.
Despite capital flight concerns, China’s situation is less dire than the headlines.
Russia’s rouble has cemented its position as the best-performing currency of the past three months, enjoying the benefits of a strong oil price at a time when the US appears to be tilting towards a more accommodating relationship with Vladimir Putin.
Turkey is growing increasingly worried about the effects of the lira’s decline and problem loans.
South Korea will see its first virtual currency based on blockchain system by February next year.
2016 will be remembered as the year the people punished politicians at the polls, unleashing a torrent of volatility in financial markets, with currencies taking a huge hit.
Taiwan’s central bank questioned the validity of a Bloomberg Benchmark report published yesterday stating that US president-elect Donald Trump might have the wrong currency in his crosshairs regarding the US’ trade deficit.
In what appeared to be an effort to shore up investor confidence in the beleaguered Chinese yuan, a phalanx of central bank advisers signaled their readiness to defend the currency and said a stabilizing economy will temper future depreciation pressure.
The agency is likely to enter a quiet period with only two out of five commissioners on board.
The central bank of the Republic of the Philippines (BSP) further eased foreign exchange rules amid efforts to liberalize the entry of more foreign banks in the country, BSP Governor Amando Tetangco Jr. said.
CFTC commissioner J. Christopher Giancarlo discusses why he believes the US needs to rethink its blockchain policy for 2017 and beyond.
Anthony Jenkins’ appointment to Blockchain board follows launch of his new start-up, 10x Future Technologies.
Moscow and Tehran are preparing for on trade in national currencies at the Moscow Exchange Andrey Melnikov, deputy director of international cooperation and public communications department of the Russian Central Bank, said.
The acquisition of Glidera, the terms of which were not disclosed, is the latest for Kraken, which has spent the past year snapping up other startups in the exchange space.
Most emerging Asian currencies retreated as investors awaited the US Federal Reserve’s policy statement and economic projections for clues on just how much US interest rates might rise next year.
Brazil’s currency and stocks rose as lawmakers approved a key austerity measure, though there was some retrenchment by investors in Mexico ahead of an expected interest rate hike by the US Federal Reserve.
The Canadian dollar ended flat against a steady US counterpart after touching a near eight-week high, as investors braced for the US Federal Reserve to hike interest rate and provide direction on its future monetary policy.