Today the G7 issued its principles for retail central bank digital currencies. The principles reflect excellent ideas about how standards of sound policymaking should be applied to the novel and unknown area of retail-focused central bank digital currencies. The principles touch areas like monetary and financial stability, privacy, security, crime, competition, financial inclusion, energy use (quietly disqualifying bitcoin or other Proof of Work-based cryptocurrencies for the job of serving as CBDC). The need to make domestically focused CBDCs interoperable across borders is also mentioned. The setting out of such principles, ...

The dollar headed for its first weekly decline versus major peers since the start of last month on Friday as global risk appetite rebounded, while the Japanese yen headed for a three-year low and the price of bitcoin hit nearly $60,000. The dollar index slipped 0.1% to 93.9 =USD and was down 0.2% for the week in what would be its first weekly loss in six weeks. The greenback tends to rise when investors seek safety. Global stock markets have rallied this week as fears about a stagflationary economy have ...

The dollar edged down against major peers on Thursday, reaching its lowest level in nine days in a pullback from its recent rally, while the British pound, Australian and New Zealand dollars rose. Expectations that the U.S. Federal Reserve would tighten monetary policy more quickly than previously expected had seen the dollar rise in September and so far in October. But it eased its recent gains, even after minutes of the Fed’s September meeting confirmed tapering stimulus of is likely to start this year. “It seems to be a classic ...

The dollar held near a one-year high versus major peers on Wednesday, amid rising expectations the Federal Reserve will announce a tapering of stimulus next month, potentially following with interest rate hikes by mid-2022. Three Fed policymakers said on Tuesday that the U.S. economy has healed enough to begin to scale back the central bank’s asset-purchase programme, including Vice Chair Richard Clarida. Money markets now price about a 50-50 chance of a rate increase by July. The dollar index, which measures the greenback against six rivals, eased slightly to 94.356 ...

Japan’s Prime Minister Fumio Kishida said on Tuesday the government will scrutinise the economic impact of any further declines in the yen, which risk hurting corporate profits. The rare warning over the potential disadvantage of a weak yen by Kishida, who took over as prime minister last week, underscores growing concern among policymakers about the damage rising input costs could have on Japan’s fragile recovery. “If the yen weakens further, it will boost exports. On the other hand, it will lead to a rise in costs for companies through higher ...

The dollar is at a crossroads after a 5% rally in four months, as many investors assess how much of the Fed’s bond purchase taper and future rate hikes are priced in, and if any further increase in U.S. yields will be for “good” or “bad” reasons. Not hedge funds though, who continue to hoover up dollars. If central banks’ post-2008 interest rate policy could generally be summed up as ‘lower for longer’, speculators’ stance on the dollar now appears to be ‘longer for longer’. The latest positioning data from ...

Dollar positioning on the rise again CFTC data show that speculative positioning on the dollar swung further towards overbought territory in the week ending 5 October, when USD net aggregate long positions against reported G10 currencies (i.e. G9 excluding SEK and NOK) reached 13.9% of open interest, the highest level since November 2019. All G10 currencies except for JPY (which experienced moderate short-squeezing) and AUD (whose positioning remained unchanged) saw a quite sizeable drop in net positioning in the week ending 5 October. Such a sharp increase in the dollar’s ...

Investors raised short bets on most Asian emerging currencies, a fortnightly Reuters poll found, as a slew of factors including U.S. rate-hike expectations, rising inflation and signs of slowing global economic growth boosted the dollar. Long positions on the Singapore dollar SGD=, Taiwan’s dollar TWD=TP and the Indian rupee INR=IN were reversed, while bearish views on the South Korean won KRW=KFTC hit a two-year peak, the poll of 12 respondents showed. The Indonesian rupiah IDR= was the only currency with a bullish trend, although long bets were almost halved. The ...

The dollar rose to its highest in nearly three years versus the yen on Monday as investors remained confident the U.S. Federal Reserve will announce a tapering of its massive bond-buying next month despite softer U.S. payrolls figures. That jobs data released on Friday pushed U.S. bond yields higher, and so the yen, which is known to be most sensitive to yield differentials, slipped to as low as 112.725 yen per dollar JPY= in Asian hours on Monday – a level last seen in December 2018. “The dollar could rise ...

U.S. dollar net longs in the latest week surged to their highest level in more than two years, according to Reuters calculations and Commodity Futures Trading Commission data released on Friday. The value of the net long dollar position was $22.89 billion in the week ended Oct. 5, compared with $16.37 billion in the previous week. U.S. dollar positioning has been net long for 12 straight weeks after being net short for 16 months. U.S. dollar positioning was derived from net contracts of International Monetary Market speculators in the Japanese ...

If the Bank of England is bluffing on its rate raising plans, it increasingly risks triggering a trap door for sterling. All central banks are at a tricky point, gradually accepting that ‘transient’ post-pandemic inflation will last longer than first thought as winter energy costs heat up and economies cool. Whether fuel squeezes amplify a slowdown is a key point. But with longer-term inflation expectations building, market pressure on policymakers to wrest back control and retain credibility in their goals is mounting. For many, this is fertile ground for policy ...

The dollar edged higher versus major peers on Friday but within a narrow range as traders awaited clues on the pace of Federal Reserve policy normalization from a monthly payrolls report. The U.S. Dollar Currency Index =USD, which measures the greenback against a basket of six peers, rose 0.1% to 94.278, keeping within sight of last week’s one-year peak of 94.504. The dollar gained 0.26% to 111.91 yen JPY=EBS, and touched 111.93, the highest level this month, helped by higher Treasury yields, with the benchmark 10-year note hitting 1.6010% for ...

China’s foreign exchange reserves fell almost 1% in September from the previous month, official data showed on Thursday, hitting their lowest level since April as the dollar gained ground against a basket of other major currencies. The country’s foreign exchange reserves – the world’s largest – stood at $3.201 trillion at the end of September, data from the central bank’s State Administration of Foreign Exchange showed. That was lower that the $3.225 trillion forecast in a Reuters poll of analysts and down from $3.232 trillion at the end of August. ...

The dollar held close to a 14-month high against the euro on Thursday, as a surge in energy prices raised the risk for the U.S. Federal Reserve to act sooner to normalise policy. The U.S. currency was slightly lower at $1.1563 per euro after strengthening to $1.1529 on Wednesday for the first time since July of last year. The dollar index, which measures the greenback against a basket of six other major currencies, was little changed at 94.153 following a nearly 0.5% climb over the past two sessions. That took ...

The dollar rose on Wednesday amid nervousness that surging energy prices could spur inflation and interest rate hikes, and as traders awaited U.S. jobs data for clues on the timing of Federal Reserve policy tightening. The Reserve Bank of New Zealand lifted its official cash rate for the first time in seven years, but its resolutely hawkish tone only seemed to add to expectations that the Fed would follow suit and the kiwi dipped as U.S. yields rose. The kiwi NZD=D3 was last 0.9% weaker at $0.6891 and the Australian ...