US dollar soars after holiday weekend

New York, Feb 17 (IANS) The US dollar rose against other major peers on Tuesday after an extended holiday weekend.

The greenback increased nearly 0.7 percent against the Japanese yen as a rebound across the global equity market dented investors’ appetite for safe-haven assets, Xinhua reported.

On the US economic front, the February 2016 Empire State Manufacturing Survey released on Tuesday indicates business activity continued to decline for New York manufacturers.

The headline general business conditions index edged higher, but remained firmly in negative territory.

The dollar index, which measures the greenback against six major peers, was up 0.96 percent at 96.861 in late trading.

In late New York trading, the euro fell to 1.1142 dollars from 1.1256 dollars of the previous session, and the British pound decreased to 1.4291 dollars from 1.4515 dollars. The Australian dollar went down to 0.7101 dollars from 0.7103 dollars.

The dollar bought 113.88 Japanese yen, higher than 113.24 yen of the previous session. The dollar moved up to 0.9883 Swiss francs from 0.9758 Swiss francs, and it climbed to 1.3877 Canadian dollars from 1.3842 Canadian dollars.

Tokyo stocks rise after Wall Street’s rally

Tokyo stocks opened higher from the off on Wednesday, as Wall Street’s overnight rally lifted the market mood.

As of 9:15 a.m., the 225-issue Nikkei Stock Average gained 53. 48 points, or 0.33 percent, from Tuesday to 16,107.91, Xinhua reported.

The broader Topix index of all First Section issues on the Tokyo Stock Exchange, added 5.59 points, or 0.43 percent, to 1,302. 60.

Early advancers comprised marine transportation, information and communication, and electric appliances-linked shares.

Chinese yuan weakens

The central parity rate of the Chinese currency renminbi (yuan) weakened by 107 basis points to 6.5237 against the US dollar on Wednesday, according to the China Foreign Exchange Trading System.

In China’s spot foreign exchange market, the yuan is allowed to rise or fall by two percent from the central parity rate each trading day, Xinhua reported.

The central parity rate of the yuan against the US dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.

6 Comments

  1. It is now publicly being discussed in the western media how cash is the real enemy. Eminent “scholars” (stooges, in my dictionary) in the good old US of A are calling for abolishing $100 bills. These stooges are pseudo academics who do not have a day’s experience in the real world. Only thing they know is some ridiculous monetary theory which they want to impose on the clueless people. They cite terrorism, tax evasion, crime, drugs etc. are the underlying reasons. But the negative interest rate regime is almost upon the Western civilisation. So an obvious reaction when negative rates come into effect is the poor population beginning to withdraw their money from their savings accounts as it’s a obvious reaction. Out of the estimate $1.4 trillion dollar bills in circulation, $1.1 trillion exist in the form of $100 dollar bills most of which lies outside the USA.

    Now there are several trillions of savers’ money in American banks. If they begin to withdraw them, there aren’t enough trees in the USA print those dollar bills to satisfy the withdrawal. The capital starved Wallstreet banks will collapse like a domino. Moreover, money in the bank gives an ideal option for the government to tax their money through the negative rates (savers only have a illusion that their money in the bank is theirs own, while in reality, in the presence of cashless society, your government owns that money).

    This is what I was talking about a few years back with my long posts. American savers are royally ****ed. This is how Rome fell. This is the reason I was suggesting them to buy some gold and silver and bury it in their backyard. Gold sure does not produce income but it is still better than negative interest rates. That’s why gold is treated as a hedge against the government stupidity. Do not expect to make “profits” out of gold but at the same time you have something in your own possession which government can not steal. In the short term, gold may still hover around $1000/oz when the dollar appreciates but what’s the use in owning dollars in the West when you are at the mercy of the totalitarian government to park those dollars? What is the use if you are getting negative returns?

    Now, after reading my post, as a precautionary measure, you may start withdrawing your savings to park them under your mattress but, be careful, it will trip the alarm and your government will start monitoring your activities. You will fail to convince your bank why you want to withdraw your money. They are required by law to inform IRS if you withdraw more than a few thousands. They will start to treat you like a criminal. It’s not science fiction.

    In Europe things are not better either. They are also planning to ban 500 Euro bills. All the collapsing countries in the West are acting in unison to reorder the chairs on the deck of sinking Titanic.

      • Student loan in the US is non-dischargeable as per the terms of the legal contract, which means it can not be forgiven(i.e. it can not be written off). You can walk away from your underwater mortgage in your country by posting the jingle mail back to your lender and they can not trouble you for the money owed, whereas for non-repayment of student loans, the loan authority can order midnight SWAT raids. Your Bull Clinton signed this into law during his tenure. This debt will haunt these students no matter how far they run or how old they get. All their future potential income will have a lien entry against this debt so government can claw back the loan.

        On the other hand, if it does come to passing another law to forgive the loans, who is on the other end of this loss? Perhaps the same student loan bonds would have been sold to your pension fund or a 401K or something like that(american bankers are experts in packaging shit in a golden wrapper and sell to the highest bidder). When the student debt is forgiven these funds will lose their value or even collapse. It’s a zero sum game remember? There is no free lunch in this world.

        Now, in all likelihood, Hitlery Clinton will become the next president. Of course why shouldn’t she? She is a woman after all, so she deserves it, not because she is eligible for it. Obama is a great president just because he was/is black. That is the standard people have in politics these days(either you have to be black or a woman). Hitlery may as well stupidly repeal the student loan law. You then see how all the hell will break loose. People in the West have a silly idea in their head that enacting new laws can make the problems go away. In fact they only make it worse. There is not a prayer in hell that can save the Western civilisation. But, before the show starts in the US, it has to run its course in Europe and Japan first. So you have a little breathing time.

        That said, the US domestic problems will not have major impact on the Dollar credibility in the short term because the rest of the world desperately needs a reserve currency (a place to park wealth/capital) and Dollar fulfils that role. Only after the rest of the developed world has collapsed, it will create big problems in the US. That time you would rather want to be in India, not that India is an ideal place but it will look like heaven at that stage.

        Just notice the slow poison your government is releasing in to the system. Reduce the interest rates, print money while keeping the rates at zero, negative interest rates, ban cash withdrawal. The people are too ignorant to notice what’s happening. It’s like the frog in boiling water. The government knows at what pace to boil the water without upsetting the frog. The frog has been suffering little by little every day and it is now used to it. The next thing your government is going to do is ban possession of gold and silver. There is always a pattern how empires fall.

        • Sallie Mae is the holder of most student loans. If Federal Reserve issue QE to the extent of $1.2 trillion and buy those loans from Fannie Mae, like the Fed did for mortgage securities owned by Freddie Mae in 2009-2010, the dollar will depreciate and facilitate more export from US. I am right. Damn, I wish I could have been an Economist.

  2. Where did Sallie May get $1.2 trillions from in order for the students to borrow? They do not have powers to print money like the Fed. They are like Freddie Mac who facilitate loans in the education sector (where as Freddie does it in the housing sector). They sell those bonds in the secondary markets which are bought by the pension funds and other investors. It looks as if Sallie May is underwriting/guaranteeing those loans under the auspices of the government edict. They are in effect the “recovery goons”.

    Fed’s balance sheet has grown far too big for what they can handle. That’s the reason they raised the rates in December. If only things were that easy. As regards diluting the Dollar to encourage exports, good luck with that. Do you think other central banks are going to sit on their palms as their currencies appreciate against the Dollar? Haven’t we seen this game already in the last 8 years?

    Another thing to note, when you say Fed prints money, it’s actually asset swap. They buy bonds in distress in exchange for printed money. So the net economic effect is nil however the quality of the assets (i.e. the distress bonds) swapped is the headache for them.

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