Forex investors see new president helping dollar

July 30, 2008 by Prakash Dhawan · Leave a Comment
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Currency investors are not particularly enamored with either of the two U.S. presidential candidates but they are more than ready for change after the U.S. dollar’s 33.8 percent decline under President George W. Bush.

Bush has presided over the worst drop in the dollar of any U.S. President since the developed world moved to flexible exchange rates in the early 1970′s.

And though analysts are not completely blaming Bush for the dollar’s slump, they say neither Republican Senator John McCain or Democrat Barack Obama can do any worse.

“One would think that just about anyone would be an economic improvement on one of the most reckless fiscal presidents we’ve ever elected,” said Chip Hanlon, president of Delta Global Advisors, Inc. in Huntington Beach, California.

The New York Board of Trade’s dollar index, which measures the dollar against a basket of six currencies, has lost 33.8 percent since Bush first took the oath of office on January 20, 2001. From a peak in July, 2001, the slide is even more dramatic at 39.3 percent.

Based on the dollar’s performance, Craig H. Russell, Beijing-based chief market strategist for China at Saxo Bank, says the Bush presidency has been more unpopular than the era of President Richard Nixon, who eventually resigned the White House in disgrace after being implicated in the Watergate scandal.

Nixon closed the so-called gold window on August 15, 1971, effectively ending the dollar’s ties to gold prices and the system of fixed exchange rates in place since World War Two.

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China launches new forex transfer system

July 27, 2008 by Prakash Dhawan · 1 Comment
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On Friday, China launched its inter-bank foreign currency payment system to smooth foreign exchange transfers on the Chinese mainland. But the People’s Bank of China said the new system is limited to forex transfers for enterprises, and it doesn’t cover across-the-board forex transfers.

The multi-currency forex payment system covers eight currencies, including the euro, the Japanese yen, the HK dollar and the US dollar. It will shorten the forex transfer time and increase efficiency.

The central bank said so far, eleven Chinese banks have joined the system. These include the country’s big-four state-owned banks, Shanghai Pudong Development Bank and Industrial Bank. It added that more players, including overseas banks, can also take part in the system based on their payment needs.

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