Currency


forex

The rich oil exporters country, Saudi Arabia, Kuwait, Bahrain and Qatar, have agreed to launch a single currency which hope hope to displace the US Dollar as the pricing currency for oil. The four nations will launch the first phase next year by creating Gulf Monetary Council that will pave the way for a full-fledged regional central bank. The decision to launch the Council next year comes at a time when the dollar is struggling with its stature as the world’s currency.

The single currency dubbed ‘Gulfo’, inspired by Europe’s monetary union and widely regarded as a success across the Gulf states. With the introduction of single currency, it is expected to increase trade volume and financial integration, facilitate foreign direct investment, and create the right conditions for the development of the Gulf region into an optimum currency area.

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forex

The havoc wreaked by the unwinding of yen carry trades in 2008 in financial markets may be a distant memory for some of us in the wake of the current rally in global equity markets.

However, it is a scene that could be replayed some time down the road and this is not good news for a recovering global economy. Only this time, the currency with the starring role is the US dollar.

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forex

Betting against the dollar is becoming the trade investor can’t afford to ignore.

The US Dollar Index fell last week the lowest level in a year as price swings in foreign exchange declined, encouraging investors to borrow greenback at record low interest rates and buy assets in countries offering yields as much as 8.1 percentage points higher than US deposit rates.

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