Category Archives: foreign exchange

The Dollar’s Not That Strong

Posted on October 29, 2008 by Felix

While I’m throwing darts at Paul Kedrosky, I ought to mention that I also think he’s quite wrong about the dollar. He has a good line — "think of the dollar as Squealer the Pig collectible Beanie Babies circa Christmas … Continue reading →

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Volatility Datapoint of the Day, Cable Edition

Posted on October 24, 2008 by Felix

Check out what happened to the pound today: it closed at $1.633, and dropped as far as $1.53 before rallying back in the UK afternoon. That’s a ridiculous move for what’s ostensibly one of the world’s major currencies. But if … Continue reading →

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The Sovereign Default Race Heats Up

Posted on October 8, 2008 by Felix

You thought Iceland was in dire straits? Maybe Pakistan will beat it to the first-to-default finish line! Pakistan’s economic crisis deepened on Monday after the rupee sank to an all-time low and Standard & Poor’s, the global rating agency, downgraded … Continue reading →

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The Icelandic Response to Crisis

Posted on October 6, 2008 by Felix

If you’re looking for a sensible and coherent response to a major crisis, you could do a lot worse today than look to Iceland. The country’s current currency crisis happened because it’s so small. But the solution, too, is something … Continue reading →

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Soundbite of the Day, Customer Service Department

Posted on October 2, 2008 by Felix

Tyler Cowen: Bush, Bernanke, Paulson — we call them leaders. The Chinese think of them as the customer service department. I suspect the Chinese get straighter answers from them than we ever do. Related: Alea has an intriguing answer to … Continue reading →

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Beware ETNs, Part 2

Posted on September 23, 2008 by Felix

Exchange-traded notes come with a monstrous amount of counterparty risk, as investors in Lehman’s ETNs are now discovering: Holders of Lehman Brothers’ structured products “have the same standing as other Lehman holding company senior, unsecured debt, which is trading at … Continue reading →

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Beware ETNs

Posted on September 17, 2008 by Felix

The Chinese renminbi is one of the most stable currencies in the world. Its value against the dollar is severely constrained by the Chinese government, and it never moves very far in any given day. But, it’s hard for foreigners … Continue reading →

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Mexican Peso Datapoint of the Day

Posted on August 7, 2008 by Felix

Currency conversion is so easy these days. More or less, one US dollar is worth the same as a Canadian dollar, an Australian dollar, a Swiss franc, one hundred yen, one thousand won, and half a British pound. The latest … Continue reading →

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Free Zimbabwe’s Banks!

Posted on July 31, 2008 by Felix

As Zimbabwe knocks another ten (yes, ten) zeroes off its currency, the central bank governor, Gideon Gono, is optimistic that somehow this will do some good: so optimistic, in fact, that he’s reintroducing coins. It won’t work, of course. Something … Continue reading →

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When Banks Hide Fees in FX Rates

Posted on July 29, 2008 by Felix

I just transferred some money from my US bank account to a vendor in the UK. Citibank’s wire-transfer fee was a modest flat rate of $20 — or so I thought until I looked at the exchange rate, which was … Continue reading →

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When Oil Strength Isn’t Dollar Weakness

Posted on July 3, 2008 by Felix

Barry Ritholtz asks: Here’s a question — at what point does ECB Central Bank Chief Trichet realize that every time the ECB hikes rates, it pummels the dollar and sends oil higher? The answer, it would seem, is "not today": … Continue reading →

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Zimbabwe Datapoints of the Day

Posted on June 24, 2008 by Felix

Comparing Old Mutual’s share price in London and Harare, Josh Giersch concludes that there are now 35 billion Zimbabwean dollars to one US dollar – up from a mere 17 billion on Friday. Which would put annualized inflation, he says … Continue reading →

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When Trichet Met Bernanke

Posted on April 26, 2008 by Felix
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Iceland: Victimized by its Tiny Currency

Posted on April 14, 2008 by Felix

Jim Surowiecki has a good piece on Iceland this week. "When we look at Iceland’s predicament," he says, "we should say that there but for the grace of China go we." It’s a good point. If Iceland risks becoming the … Continue reading →

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Currency Datapoint of the Day

Posted on April 2, 2008 by Felix

Used to be, Russians loved them their greenbacks. And not any old greenbacks, either: they had to be "new bills with the watermark and large portrait". No longer. Now, they want Chinese renminbi. That’s official policy, that is.

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Is Iceland the New Bear Stearns?

Posted on April 1, 2008 by Felix

Got some spare cash? Thought about parking it in Iceland? The currency has plunged against the dollar, which means you get more than 77 Icelandic krona to the dollar, up from 65 at the beginning of March. Meanwhile, overnight rates … Continue reading →

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Zimbabwe Datapoint of the Day

Posted on February 21, 2008 by Felix

Brian Latham reports: The currency slumped to 20 million per dollar, from 6 million yesterday, traders including John Tonganyika said in interviews today from the capital, Harare. It’s the biggest drop since Zimbabwe gained independence from Britain in 1980, said … Continue reading →

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Zimbabwean Dollar Website of the Day

Posted on February 17, 2008 by Felix

It gives me great pleasure to announce that Market Movers has nabbed itself 11,000 valuable pixels on the Million Zimbabwean Dollar Homepage, for the bargain price of just $0.41, plus a $0.35 paypal fee. From the FAQ: 8. How long … Continue reading →

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Subprime: Gross Losses are Much Bigger Than Net Losses

Posted on January 2, 2008 by Felix

I’d like to thank Floyd Norris for responding to my blog entry last week about one of his columns. Norris is a blogger in his own right, of course, but it’s always good to see venerable journalists venturing off their … Continue reading →

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The Denomination Fallacy, Coffee Edition

Posted on December 24, 2007 by Felix

The denomination fallacy normally rears its economically-illiterate head with respect to oil prices. But in the Washington Post today, Anthony Faiola manages to apply it to coffee: For untold millions worldwide, the weak dollar has emerged as a troubling dark … Continue reading →

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David Woo Defends the Oil Price Denomination Fallacy

Posted on December 4, 2007 by Felix

David Woo, global head of foreign exchange strategy at Barclays, knows a hell of a lot more about the FX market than I do. And it turns out that Woo doesn’t dismiss the oil-price denomination fallacy out of hand. In … Continue reading →

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Trade the FX Markets for Fun and Losses!

Posted on November 30, 2007 by Felix

Online poker, it’s a bitch, what with being illegal and all. What we really need is a legal way to lose lots of money online, using an addictive videogame-style interface. Enter eToro: where Reuters 3000 meets Nintendo Wii! There’s some … Continue reading →

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Chart of the Day: Oil Prices

Posted on November 23, 2007 by Felix

From Stephen Gordon comes this chart: Gordon notes that the Canadian dollar/yen exchange rate today is pretty much the same as it was back on September 4, which means that the price of oil has risen about the same amount … Continue reading →

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Currency Devaluation Datapoint of the Day

Posted on November 16, 2007 by Felix

Justin Fox reads research from Merrill’s David Rosenberg: While the loonie plummeted against the dollar between 1992 to 2002, Rosenberg says, inflation in Canada declined from 4.5% to 1.3%, the short term interest rate set by the Bank of Canada … Continue reading →

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Price Restraint

Posted on November 1, 2007 by Felix

One-liner of the day comes (natch) from Tim Price: To be fair to Stan O’Neal, when he promised in December that Merrill Lynch’s $1.3 billion acquisition of subprime mortgage lender First Franklin would provide “revenue velocity”, he didn’t explicitly state … Continue reading →

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