Tell Us About Your Transfer
We'll Tell You Where to Get the Best Rate!

Amount:
From:
To:

  International Transfer
  Travel Money
  • Compare Currency Brokers to Find the best deal
  • Save on Expensive Bank Fees
  • Pay 0% Commission on your Currency Exchange
  • Take Part in the Community and learn about Transfers
 

US Treasury Delays Releasing Bi-Annual Trade Report

The head of the International Monetary Fund, Christine Lagarde, announced yesterday that indebted countries may have to enact severe budget cuts. Without these cuts, it will be difficult for debt-ridden nations like Spain, Greece and Portugal to recover. Lagarde believes that the Eurozone is at the center of the ongoing economic issues facing the world. For the global economy to recover, Eurozone leaders will have to steer their economy out of a recessions. Softening her statement was the comment that it was not always necessarily to stick to strict budget targets. This announcement came as a relief for Chancellor George Osborne in the United Kingdom. Osborne is expected to make at least 10 billion pounds in budget cuts by this August.

This news arrived at the same time that unemployment numbers were released in Greece. Currently, Greece has an overall unemployment rate of 25.1 percent.  For youth in the nation, the unemployment rate is at 54.2 percent. Partially due to the ongoing unemployment rate and budgetary issues, the German Economy Ministry lowered their growth expectations for the nation to just one percent for 2013 instead of the previous forecast of two percent.
Despite the ongoing crisis in Europe, the euro gained against the United States dollar and the Japanese yen on Friday. It is still within normal ranges as investors wait for a bailout decision from Spain. On Friday, the economy minister in Spain stated that a bond-buying plan was in place and there was not political opposition to Spain placing a request.
Euro Down for the Week

On Thursday, Europe’s currency was trading at a ten-day low of $1.2824. Investors see support for the euro at $1.2823. By Friday, the euro was up 0.2 percent to $1.2952. It was still down 0.6 percent for the entire week and has stayed within a range of $1.28 to $1.3170.  A total of US$4.7 billion euros were exchanged on Friday which is lower than the US$5.7 billion traded on Thursday. Many analysts believe that the euro should return to a range of $1.3170 to $1.34 by the end of 2012.

Versus the yen, the euro gained 0.3 percent to reach 101.55 yen. At the same time, the greenback reached a high of 78.53 yen for the day. By the end of Friday, the United States dollar had gained 0.1 percent for the day and was at a level of 78.40 yen. Overall, the greenback ended the week 0.3 percent lower versus the yen.

In the next week, the currency markets could be used to finance a deal in Japan. Softbank Corporation is expected to buy a majority stake in the company Sprint Nextel. This deal is expected to cost more than one trillion yen. After its completion, the purchase should help to advance the greenback versus the yen.

Iranian Government Says Currency in Good Position

After a month of rapid inflation, the Iranian government says the currency is stabilizing. The Economic Affairs and Finance Minister, Shamseddin Hosseini, stated that the government was attempting to curb speculation on the currency. Over the last two weeks, the rial’s exchange rate with the greenback has declined drastically.

Western nations placed economic sanctions on Iran in an attempt to stop their nuclear program. After the sanctions, oil earnings in Iran dropped and the rial has become devalued. As citizens found out about the sanctions, they rushed to place their funds in foreign banks accounts. The move proved to the smart one as the rial lost one third of its value in just ten days. Over 15 months, the rial has lost two-thirds of its value. At the start of last week, the rial was being exchanged at a rate of 37,500 per United States dollar.

Inflation has risen to 25 percent and the price of imports has drastically risen. The ongoing currency issues have caused riots in Tehran and political protests.

U.S. Treasury Delays Reports

On Friday, the United States Treasury announced that it would wait to release its semi-annual report on major trade partners and their currency policies. The Treasury has come under increasing pressure to label China a serial currency manipulator. According to the Treasury, it wanted to delay the semi-annual report so it could wait for the meeting of the G-20 finance ministers that occurs next month.

In the United States Congress, critics have accused China of manipulating its currency. By making the renminbi artificially low, it props up Chinese exports and makes products produced in China unfairly lower priced. Some Congressional critics want to apply sanctions against China. Currently, the Obama administration has refrained from officially labeling the nation a currency manipulator although they have raised pressure on China.

In May, the report concluded that China did not meet all of the standards for being a currency manipulator. Although the Treasury believed the currency to be undervalued, they did not state that the China had met the standards for manipulation. Speculation around the decision to delay the report centers on the upcoming United States presidential election. The Republican challenger, Mitt Romney, has announced his decision to increase pressure on Beijing if he becomes president. Last month, Romney announced that China’s currency manipulation was pushing American manufacturers out of business.

Malaysian Bond Market Contracts

For the month of August, industrial production in Malaysia dropped by 0.7 percent. This number is revised from a level of 2.9 percent in July. Manufacturing activities slowed in the nation overall and bond prices for three-year, five-year and ten-year bonds dropped 1 to 3 basis points. Ten-year bonds ended the day Friday at 3.52 percent while three-year bonds were yielding 2.12 percent.

At the same time, the Malaysian ringgit was traded at lower rates amid concern over extended losses in global equity markets. Concern also existed for economies in the area, although future rate cuts are not expected. MYR IRS rates for Malaysia finished out the week 3 to 4 basis points lower.

In Australia, the Aussie dropped from Thursday’s one-week high. By the end of Friday’s trading session, the Australian dollar was at $1.0232. This marks a 0.3 percent drop from Thursday.

Leave a Reply

Your email is never published nor shared. Required fields are marked *

*
Name*:
*
Email*:
Website:
Comment*: