(Bloomberg) -- Taiwan’s dollar posted its biggest daily advance since December after a U.S. Treasury report hinted that the Biden administration could exert greater pressure on the island’s central bank to allow the currency to appreciate.The local dollar rose 0.5% to close at 28.205 against the greenback, and was emerging Asia’s best-performing currency for the day. While the Treasury report on Friday didn’t label Taiwan as a currency manipulator, it said the U.S. will initiate “enhanced bilateral engagement” to address what it considers as “structural undervaluation” of the exchange rate.“Despite the relief of not being labeled a currency manipulator, the Treasury report still urged Taiwan authorities to limit FX intervention to exceptional circumstances,” said Ken Cheung, chief Asian FX strategist at Mizuho Bank Ltd. “This, alongside the strong exports, will help support the Taiwan dollar.”The Taiwan dollar has come under scrutiny as the tech-dependent economy posts a quicker recovery from the pandemic than most of its peers in Asia. Six of the 60 pages in the Treasury report were devoted to Taiwan, more than any other U.S. trading partner, in the Biden administration’s first foreign-exchange policy update.The report cites research published in November 2018 that assesses the Asian currency to be undervalued by as much as 21%. Taiwan made net foreign-exchange purchases of $39.5 billion in 2020, equivalent to 5.9% of its gross domestic product, according to the analysis.While Taiwan’s central bank doesn’t deny intervening in currency markets, it pushed back against aspects of the U.S. assessment. The Taiwan dollar is close to being at a balanced level based on the International Monetary Fund’s valuation model, it said, as it urged the U.S. to ease monitoring of trading partners during the Covid pandemic.Held Meetings“Yellen is pragmatic and prudent,” central bank governor Yang Chin-long told lawmakers Monday, when discussing the Treasury report. “We need to show more than just our sincerity about communicating with the U.S.”Taiwan has already held two meetings with the Treasury this year over its currency, Yang added. The central bank only intervenes when there are concerns about supply and demand in the market, he said.Regular late-session moves by state-backed banks to pare gains by Taiwan’s currency against the dollar are “a kind of intervention,” Governor Yang had told reporters in late March. For months, the currency could rise more than 1% during the day, only to pare back most of the advance at the close.While the U.S. didn’t label any economy as a currency manipulator, it also acknowledged that Taiwan, Switzerland and Vietnam all met the threshold. It insisted that it would maintain pressure on trading partners to redress trade imbalances with the U.S.“There will still be pressure on Asian central banks to ease back on their intervention activity, which would lead to greater appreciation pressure,” said Khoon Goh, head of Asia research at Australia & New Zealand Banking Group Ltd. “The easing of U.S. 10-year bond yields and the retreat in the dollar of late has also helped the Taiwan dollar’s move.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
(Bloomberg) -- China sought to allay fears it wants to topple the dollar as the world’s main reserve currency as Beijing makes bigger strides in creating its own digital yuan.People’s Bank of China Deputy Governor Li Bo said the goal for internationalizing its currency is not to replace the dollar, and the efforts to create a digital yuan are aimed at domestic use.“For the internationalization of the renminbi, we have said many times that it’s a natural process, and our goal is not to replace the U.S. dollar or other international currencies,” Li said on a panel at the Boao forum Sunday. “I think our goal is to allow the market to choose, to facilitate international trade and investment.”China’s central bank is currently testing the use of a “digital yuan” in various pilot programs across the country. A report earlier this week showed the Biden administration is increasing its scrutiny of China’s progress toward the digital yuan amid concern it could kick off a long-term bid to displace the dollar.The PBOC has been working on a digital currency since 2014 and its moves have heightened interest among central banks and policy makers, while the spread of cryptocurrencies has added to a sense that competitors to regular cash could change how the financial sector operates. The PBOC has moved closer to becoming the first major central bank to launch a virtual currency, rolling out a trial for consumers and businesses in 11 cities across the country.“The motivation for the e-yuan, for now at least, is focusing primarily on domestic use,” Li said. International “interoperability is a very complex issue and we are not in a hurry to reach any particular solution yet,” although there could be cross-border use “in the long term,” Li said.China’s Digital Yuan Won’t Topple Dollar, BOJ Official SaysThe central bank is planning to test the cross-border use of the digital yuan at the 2022 Beijing Winter Olympics, where it could be used by both domestic users as well as athletes and visitors from overseas, Li said.Agustin Carstens, general manager of Bank for International Settlements, said on the same panel there was huge potential in the cross-border use of digital currencies as they could make foreign exchange transaction and payment settlement extremely efficient. He said countries can explore various ways to achieve international interoperability, including making different systems compatible and creating connectivity links among the systems.Bahamas Tops China in Ranking of Central Bank Digital CurrenciesWhile the digitization of the yuan could benefit its use in cross-border transactions, the key factor in determining the currency’s global role is whether China will relax its capital controls, said Shen Jianguang, chief economist at JD.com Inc. “If you want to have a global reserve currency, you need to allow foreigners to hold it, to use it.”China will also need to allow its citizens to buy more foreign assets, further develop its financial markets and allow greater exchange rate flexibility in order to push for the internationalization of yuan, Shen said in an interview at the forum.China has seen a flood of capital flows into its financial markets since last year, boosting the amount of yuan traded globally. Yet, in the context of its vast markets, foreign ownership of local stocks and bonds remains relatively low at around 5% and 3% respectively. The yuan’s share of global payments and central bank reserves is still only about 2%.“The digital yuan is a means to help monetary policy efficiency and cross-border usage with partners that tend to trade with China in goods and services, less so the major economies like the U.S.,” said Stephen Chiu, Asia FX and rates strategist at Bloomberg Intelligence. “Digital or not, it’s not so easy to move the dollar’s dominance, be it as a trade settlement or reserve currency.”How China Is Closing In on Its Own Digital Currency: QuickTakeThe initial plans for a digital currency weren’t motivated by considerations of cross-border use, according to former People’s Bank of China Governor Zhou Xiaochuan, who noted that there are many issues with using a digital currency across national borders. International use could affect monetary policy independence, and it’s important it isn’t used for crime, he said on the same panel in Boao.(Updates with comments from BIS, details on yuan trade.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
TOKYO (Reuters) -The dollar was pinned near a one-month low to major peers on Monday, with Treasury yields hovering near the lowest in five weeks, after the U.S. Federal Reserve reiterated its view that any spike in inflation was likely to be temporary. The dollar index, which tracks the currency against six rivals, was at 91.623, not far from the low of 91.484 marked last week, a level not seen since March 18. "The fixed-income market will dominate my world this week," with the risk currently skewed to further U.S. yield declines, pressuring the dollar, Chris Weston, head of research at Pepperstone Markets Ltd, a foreign exchange broker based in Melbourne, wrote in a client note.
It’s a quiet day ahead on the economic calendar. There are no material stats to consider, leaving geopolitics and COVID-19 and vaccine news in focus
According to new research by the British Chambers of Commerce, two in five businesses (38%) in the first quarter of 2021 expect to see price rises in the next three months.
New research from life insurance comparison site Reassured asked 2,028 UK residents about changes to their lifestyle choices over lockdown.
The dollar had a rough week. Despite a series of economic data showing that the US economy was surging by more than expected, the greenback failed to muster any traction and fell against all the major currencies and most emerging market currencies.
Governments and central banks around the world have borrowed huge amounts of money to revive the economy. Without any clear plan to dig the U.S out of debt, there is rising worry that the U.S dollar could be under enormous pressure.
The band will play to a crowd of 5,000 in Liverpool on 2 May in a trial event at Sefton Park — gaining admission with a negative coronavirus test.
U.S. dollar positioning was derived from net contracts of International Monetary Market speculators in the Japanese yen, euro, British pound and Swiss franc, as well as the Canadian and Australian dollars. In a wider measure of dollar positioning that includes net contracts on the New Zealand dollar, Mexican peso, Brazilian real and Russian ruble, the greenback posted a net short position of $5.711 billion this week, from net shorts of $7.747 billion the week before. Against a basket of six rival currencies, the U.S. dollar was down 0.71% for the week, its second consecutive weekly fall.
The direction of the NZD/USD into the close on Friday will be determined by trader reaction to the short-term Fibonacci level at .7145.
The direction of the Forex pair into the close on Friday is likely to be determined by trader reaction to 108.763.
The direction of the AUD/USD into the close on Friday is likely to be determined by trader reaction to the short-term Fibonacci level at .7728.
You might be able to buy a Tesla in Bitcoin. But cryptocurrencies aren’t likely to replace the almighty dollar anytime soon.
One policy maker says China is unlikely to use bitcoin as a financial weapon against the U.S. dollar.
USD/CAD declined below the support at 1.2525 and is testing the next support level at 1.2500.
The head of the BOJ payment systems department is confident that “the dollar’s status as the key global currency won’t change so easily.” However, Kazushige Kamiyama also noted that the dollar’s advantage could strengthen if the US decides to digitize. The BOJ official is responsible for the research and development of his own country’s digital … Continued
The British pound rallied a bit during the week as we continue to test the 1.3750 level as support. There is a significant amount of support underneath as well.
The Euro rallied significantly during the course of the trading to reach towards the 1.20 handle again.
The Australian dollar has exploded for the week, reaching to fill the previous, and now threatens the 0.78 handle.
* Canadian dollar strengthens 0.4% against the greenback * For the week, the loonie was on track to gain 0.2% * Canadian wholesale trade falls 0.7% in February * Canadian bond yields rise across a steeper curve TORONTO, April 16 (Reuters) - The Canadian dollar strengthened against its U.S. counterpart on Friday, turning higher for the week, as higher oil prices and a broader decline for the greenback offset domestic data showing a bigger-than-expected drop in wholesale trade. The U.S. dollar was set to post a second week of losses amid an extended retreat in Treasury yields, as investors increasingly bought into the Federal Reserve's insistence it would keep an accommodative policy stance for a while longer. U.S. crude prices were up 0.1% at $63.5 a barrel, while the Canadian dollar was trading 0.4% higher at 1.2497 to the greenback, or 80.02 U.S. cents.
The British pound initially fell rather hard during the trading session on Friday, and then turned around to form a somewhat positive candlestick.
Last week’s focus was the Russel 2000, Transportation, and Semiconductors. The Russell 2000 has shown us general market direction and sentiment as it contains 2000 small cap U.S companies.
Thursday, both the Russell 2000 and the Nasdaq 100 cleared major resistance levels from the 50-day moving average. In many traders/investors’ minds this has opened the bullish flood gates with new highs in view.
The First Trust Dow Jones International Internet ETF is seeing unusually high volume in afternoon trading Wednesday, with over 110,000 shares traded versus three month average volume of about 42,000. Shares of FDNI were off about 2.8% on the day.