Exploring Hydrocarbon Depletion
Japan and China are expected to start direct trading of their currencies as early as June as part of efforts to boost bilateral trade and investment, reports said on Saturday.
With the planned step, exchange rates between the yen and the yuan will be determined by their transactions, departing from the current 'cross rate' system that involves the dollar in setting yen-yuan rates, Kyodo News said.
Japan and China will start direct currency trading this week, Tokyo said Tuesday, the first time Beijing has let a major unit other than the dollar swap with the yuan.
The move, which will scrap the greenback as an intermediary unit, comes as China introduces measures as part of a long-term goal of internationalizing its currency to rival the dollar.
The two-way trade will also be allowed to move in a wider range than the narrow band at which the dollar and yuan change hands, Dow Jones Newswires and the Nikkei business daily reported.
China will set a daily rate based on dealer quotes with trade allowed to move within a 3% band above or below that rate, the reports said, compared with a 1% band fixed to yuan-dollar trading.
The Chinese central bank earlier Tuesday introduced a rate of 7.9480 yuan for every 100 yen, Dow Jones said.
However, there will be no fixed rates in Tokyo trade with the currencies trading freely, according to the same media reports which provided no further details.
Disappointing U.S. economic data, new strains in financial markets and deepening worries about Europe's fiscal crisis have prompted a shift at the Federal Reserve, putting back on the table the possibility of action to spur the recovery.
Not (necessarily) a conspiracy theory:The small percentage of Americans who are aware and informed are puzzled why the banksters have escaped with their financial crimes without prosecution. The answer might be that the banks “too big to fail” are adjuncts of Washington and the Federal Reserve in maintaining the stability of the dollar and Treasury bond markets in the face of an untenable Fed policy.
Let us first look at how the big banks can keep the interest rates on Treasuries low, below the rate of inflation, despite the constant increase in US debt as a percent of GDP–thus preserving the Treasury’s ability to service the debt.
The imperiled banks too big to fail have a huge stake in low interest rates and the success of the Fed’s policy. The big banks are positioned to make the Fed’s policy a success. JPMorganChase and other giant-sized banks can drive down Treasury interest rates and, thereby, drive up the prices of bonds, producing a rally, by selling Interest Rate Swaps (IRSwaps).
This apparent collusion suggests to some observers that the reason the Wall Street banksters have not been prosecuted for their crimes is that they are an essential part of the Federal Reserve’s policy to preserve the US dollar as world currency. Possibly the collusion between the Federal Reserve and the banks is organized, but it doesn’t have to be. The banks are beneficiaries of the Fed’s zero interest rate policy. It is in the banks’ interest to support it. Organized collusion is not required.
mattduke wrote:Fed is moving towards limitless open ended bond buying.
http://www.bloomberg.com/news/2012-09-0 ... nanke.html
The ICE U.S. Dollar Index reached its highest level since March 2009 Tuesday as global economic data highlighted the increasing disparity between growth in the U.S. and elsewhere.
The dollar Index a measure of the greenback’s strength against a basket of six currencies, was up 0.76% to 88.6150.
The largest driver of the index’s gains was the euro, which hit a 28-month low against the dollar as investors sold the shared currency ahead of Thursday’s meeting of the European Central Bank’s Governing Council.
It traded at $1.2360, compared to $1.2475 Monday.
Win Thin, head of emerging-market currency strategy at Brown Brothers Harriman & Co., said the dollar’s broad rally Tuesday is a sign that the trend that began over the summer remains intact, despite some consolidation seen over the past few sessions.
The dollar hit a fresh record high against the ruble Tuesday after Russia’s economy ministry warned the country will slip into recession in 2015, and that the ruble will likely remain weak. West Texas Intermediate crude oil remained below $70 a barrel, which also weighed on the ruble.