Tag: dollar

What happens to cryptocurrency you buy if India decides to ban it, BFSI News, ET BFSI

Personal Finance

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Well, it is not the first time that the Indian government has pondered over banning cryptocurrencies. Initially, in 2013, when bitcoin was launched, the first few years went in hush-hush. The technology was new. This was something that was a store of value with no central authority.

Not only the government but also, enthusiastic investors were speculating how bitcoin will turn out to be. When after the end of 2016, this revolutionary financial asset made noise, the Indian government came to action.

Any government of the world is about authority, power and regulation. And bitcoin, or rather say, cryptocurrency, took that power from the government. There was no bank, no RBI or no scrutiny around your money. You held an asset and you did your investment, you used the money gained and you made sure your investment strategy works for you. There was no advisory, no policymakers, no brainwashing whatsoever. The bitcoin investment grew so much in 2017, that the Indian government had to come into action.

When wheels came, bicycles were invented. We all thought this is going to stay. Then came the motors and we thought the motor vehicles were going to stay. Then came the Wright brothers, who told us that we also could fly. But when the finite supply of automobile fuel would be exhausted, none of these would matter.

On the same lines, we thought writing letters is the best way to reach farther places. Then boom. The 2000s came and the internet was all over. The communication could be done in milliseconds.

So now let us talk about what we cannot do when there is a ban. When we say the ban, we mean that the transactions between the bank and your crypto exchanges will be stopped. This means that you will not be able to convert your local currency into buying any kind of cryptocurrency. This also means that you will not be able to liquidate your HODLed cryptos and get them encashed. This means, your HODLed cryptocurrency will be on *HODL* for some time more until the ban is uplifted.

But what if you send your cryptos to someone who is not an Indian resident and belongs to a country where crypto is legal. Well, in that case, you can always send your acquired crypto, and get the equivalent INR in your bank. However, this procedure of exit would come at a cost. The foreign exchange cost and penalties would cost you more than the actual exchange fees, had there been no ban in your own country.

But, you still need to identify the catch here. By the above method, we see that the transactions that involve crypto are still possible. No government can ever tame the internet. The government tried to ban PUBG. The gaming community in India identified VPNs that would still make PUBG accessible to them. The government tried banning porn, but anything that is accessible to everyone, or is made available on the cloud, can never be fully tamed. The same goes with the decentralised and open source-based cryptocurrencies as well.

Unocoin is one such platform that lets its user buy, sell and trade 40+ cryptocurrencies. The transactional fees are very nominal as compared to the features that it provides. Unocoin has always respected and abided by the laws set by the government of India and RBI. But it also makes sure it creates a space where the crypto exchanges are smooth. Hence, Unocoin collaborated with Airtm for a cross-platform transaction. With this Unocoin – Airtm collab, any Unocoin user can buy any crypto from either platform in exchange for his/her local fiat currency and via the pairing coin US dollar Tether ( USDT), can convert his/her acquired cryptos into another crypto/fiat currency from the other platform.

It is like entering a bridge, walking on the bridge and reaching the other side of the river. With the USDT acting as a pairing coin or the bridge, the walk from one end to the other and back to the first end is possible.

While there are speculations on the cryptocurrency, the virtual currency enthusiasts know for sure, that these are only the ups and downs that come in their investment plan. India would eventually be a country where there will be no inhibitions over cryptocurrencies, sooner or later.

The writer is Co-founder & CEO of Unocoin Technologies Private Limited



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Gold steady as inflation woes offset firmer dollar, yields, BFSI News, ET BFSI

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Gold prices steadied on Tuesday, after rallying to a five-month peak in the previous session, as concerns over broadening inflationary risks kept bullion’s safe-haven appeal intact in the face of a stronger U.S. dollar and elevated bond yields.

FUNDAMENTALS

* Spot gold was flat at $1,862.81 per ounce, as of 0140 GMT. U.S. gold futures were also flat at $1,866.80.

* Richmond Federal Reserve President Thomas Barkin said on Monday the U.S. Fed will not hesitate to raise interest rates if it concludes high inflation threatens to persist, but that central bank should wait to gauge if inflation and labor shortages prove to be more long-lasting.

* Rate hikes tend to weigh on gold as higher interest rates raise the non-yielding metal’s opportunity cost.

* Bank of England Governor Andrew Bailey said he was very uneasy about the inflation outlook and that his vote to keep interest rates on hold earlier this month, which shocked financial markets, had been a very close call.

* Tightening monetary policy now to rein in inflation could choke off the euro zone’s recovery, European Central Bank President Christine Lagarde said on Monday, pushing back on calls and market bets for tighter policy.

* Pressuring bullion, the dollar index held close to a 16-month high and benchmark U.S. 10-year Treasury yields were near a three-week peak.

* A stronger dollar makes gold more expensive for buyers holding other currencies, while higher yields increase the metal’s opportunity cost.

* Speculators raised their net long gold futures and options positions to 146,319 in the week ended Nov. 9, the U.S. Commodity Futures Trading Commission (CFTC) said on Monday.

* Spot silver was steady at $25.04 per ounce. Platinum fell 0.1% to $1,085.54 and palladium dropped 0.6% to $2,142.19.

DATA/EVENTS (GMT) 0700 UK ILO Unemployment Rate Sept 1000 EU GDP Flash Estimate QQ, YY Q3 1330 US Retail Sales MM Oct 1415 US Industrial Production MM Oct



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Dollar firm as US inflation poses next test, BFSI News, ET BFSI

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SYDNEY: The dollar made a steady start to the week on Monday but was kept below Friday peaks, as currency traders seek a path between markets’ volatile interest rate projections and central bankers vowing to keep rates low even as inflation surges.

Figures due Wednesday are expected to show U.S. consumer price growth running hot at 5.8% year-on-year, the next big test of faith in the Federal Reserve‘s insistence it will be patient with interest rate hikes.

In early Asia trade, the dollar was marginally higher against the yen and crept from a one-week low to 113.49 yen.

After briefly touching a 15-month top of $1.15135 on the euro in the wake of strong U.S. labour data on Friday, the greenback steadied at $1.1566 per euro.

Sterling, which was walloped when the Bank of England surprised traders by holding rates steady last week, fell to a five-week low of $1.3425 on Friday, before bouncing to hold at $1.3487 on Monday.

The Bank of England’s surprise triggered a sharp reversal late last week in what had become quite aggressive bets on imminent rate hikes in Britain and globally, while stocks have meandered higher through the maelstrom in bond markets.

“Central banks have distorted a whole lot of markets, pumping up the equity market and pumping up the bond market,” said Jason Wong, a strategist at Bank of New Zealand in Wellington.

“Currencies are sort of in the middle of all that, wondering what the hell’s going on,” he said, with the market seemingly in a holding pattern but with risks building up, especially in China where a slowing economy brings global implications.

The risk-sensitive Australian and New Zealand dollars struggled to make much headway in early trade, with the Aussie

pinned just below $0.74 and the New Zealand dollar

around $0.7108.

“AUD/USD risks remain skewed to the downside this week in our view,” said Kim Mundy, an analyst at Commonwealth Bank of Australia, especially if U.S. inflation data is strong or if Australian employment data on Thursday is particularly weak.

“A dip towards $0.7300 is possible,” she said.

Elsewhere, weekend data showed Chinese exports unexpectedly strong, but imports unexpectedly soft in another indicator of underwhelming demand, especially as China tightens movement restrictions to keep a lid on COVID-19.

The Communist Party begins a meeting on Monday which is expected to pass a resolution in praise of President Xi Jinping and lay the groundwork for a third term of his leadership.

Traders are also looking ahead to Chinese producer and consumer price data due on Wednesday, with annual producer price growth seen surging to 12% in perhaps a harbinger of further price pressure to come through global supply chains.

The Chinese yuan was marginally weaker in early trade at 6.3951 per dollar. The U.S. dollar index was flat at 94.225, putting it roughly in the top half of a range it has traded for a little more than a month.



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Dollar in driver’s seat as payrolls loom; sterling staggers

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The dollar was on course for a second straight week of gains against major peers on Friday, ahead of a key US jobs report that could sway the timing of Federal Reserve interest rate increases.

Sterling headed for its worst week in 11 after the Bank of England caught the market off-guard by keeping rates steady on Thursday.

The dollar index, which measures the greenback against a basket of six rivals, was steady at 94.327 after rallying 0.51 per cent overnight. That lifted it into the positive for the week, adding 0.20 per cent.

The British pound was little changed on Friday following a 1.36 per cent tumble in the previous session that set it upfor a 1.39 per cent slump for the week.

Investors have been forced to reset monetary policy expectations this week, after some of the biggest global central banks knocked back bets for early rate hikes.

European Central Bank President Christine Lagarde pushed back on Wednesday against market bets for a rate hike as soon as next October and said it was very unlikely such a move would occur in 2022.

Also on Wednesday, Fed Chair Jerome Powell said he was in no rush to hike borrowing costs, even as the Federal Open Market Committee announced a $15 billion monthly tapering of its $120 billion in monthly asset purchases.

The Fed has set a labour market recovery as a condition for rates lift-off. US non-farm payrolls due later on Friday are forecast by economists to show a 450,000 surge in jobs in October, following a 194,000 rise in the prior month.

“The FOMC delivered a ‘dovish taper,’ but the USD is still better positioned than most,” Westpac strategists wrote in a client note.

“Payrolls this week should be at least as strong as consensus given signs that recovery momentum is accelerating again,” making dips into the mid-93s a buying opportunity for the dollar index, they said.

Euro trades flat

The euro was little changed at $1.1556 after dropping 0.49 per cent overnight, putting it on course for a 0.16 per cent decline this week.

“If the markets are indeed dominated by the ‘taking away the punch bowl’ theme, then this force will prove consistently corrosive against the EUR,” Deutsche Bank macro strategist Alan Ruskin wrote in a research note.

“It may need more than payrolls to break 1.15, but payrolls will not stand in the way of the USD chipping away at EUR/USD’s major downside support.”

The dollar was about flat at 113.67 yen, down 0.29 per cent since last Friday. While the Bank of Japan is set to be slowest among developed-market central banks to normalize policy, the Japanese currency benefited as those expectations remained constant while investors cut bets elsewhere.

The Reserve Bank of Australia set the tone for the week on Tuesday, when policy makers stuck to their dovish stance in the face of increasingly sticky inflation pressures.

On Friday, the RBA said in its statement on monetary policy that “an increase in the cash rate in 2023 could be warranted. However, in the Board’s view, the latest data and forecasts do not warrant an increase in the cash rate in 2022,” as markets are pricing.

The Aussie dollar was slightly lower on the day at $0.7394, adding to the previous session’s 0.67 per cent decline and putting it on course for a 1.67 per cent drop this week.

New Zealand’s kiwi dollar slipped 0.09 per cent to $0.70915 after a 0.81 per cent slide on Thursday, setting up a 1.07 per cent weekly loss.

Among cryptocurrencies, bitcoin was around $62,100, having largely traded sideways since it hit its all-time high above $67,000 last month.

Ether, the second-biggest cryptocurrency, traded around $4,500 after hitting a record high of $4,670.81 on Wednesday.

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Rupee rises 16 paise against dollar in early trade

Banking & Finance

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The rupee surged 16 paise to 74.87 against the US dollar in opening trade on Thursday amid easing crude oil prices.

At the interbank foreign exchange, the rupee opened strong at 74.92 against the dollar and gained further to touch 74.87 in early deals, a rise of 16 paise over its previous close.

On Wednesday, the rupee had settled at 75.03 against the US dollar.

Cash is still ‘King’ as digital divide between Bharat and India continues

Meanwhile, the dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.04 per cent to 93.84.

Global oil benchmark Brent crude futures fell 2.03 per cent to $82.86 per barrel.

Bitcoin edges off all-time high

On the domestic equity market front, BSE Sensex was trading 363.32 points or 0.59 per cent lower at 60,780.01, while the broader NSE Nifty declined 119.75 points or 0.66 per cent to 18,091.20.

Foreign institutional investors were net sellers in the capital market on Wednesday as they offloaded shares worth ₹1,913.36 crore, as per exchange data.

According to Anil Kumar Bhansali, Head of Treasury, Finrex Treasury Advisors, the range for USD-INR for the day is 74.80-75.20.

“Markets await for the US Fed meeting but equities are down while currencies are in a range. On Wednesday buying was from ONGC and BPCL, which may continue on Thursday,” Bhansali said.

Bhansali added that “exporters may sell above 75 at around 75.10 and importers may buy near 74.80.”

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Gold inches lower on dollar uptick; focus on key central bank meetings, BFSI News, ET BFSI

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– Gold prices edged lower on Tuesday, weighed down by an uptick in the dollar as investors eye upcoming key central bank meetings this week.

FUNDAMENTALS

* Spot gold fell 0.1% to $1,805.96 per ounce by 0116 GMT. U.S. gold futures was flat at $1,806.60.

* On Monday, the metal rose nearly 1% to a high of $1,809.66, only about $4 shy of an over one-month peak scaled last week.

* The dollar rose 0.1% on Tuesday, recovering from a near one-month trough hit during the previous session. A stronger greenback makes gold more expensive for buyers holding other currencies. [USD/]

* Benchmark 10-year U.S. Treasury yields were also a tad higher at 1.6431%, raising non-interest bearing gold’s opportunity cost. [US/]

* Market participants eye meetings from the Bank of Japan and the European Central Bank (ECB) on Thursday. Neither of the central bank is likely to announce a change in policy, though the ECB might address how inflationary pressures could affect policy.

* The U.S. Federal Reserve and the Bank of England are also set to meet next week.

* Bank of England interest rate-setter Silvana Tenreyro said she needed more time to judge how the end of the government’s job-saving furlough scheme was affecting the labour market, adding to signs that she sees no urgency to raise rates.

* Gold is often considered an inflation hedge, though reduced stimulus and interest rate hikes push government bond yields up, translating into a higher opportunity cost for holding bullion which pays no interest.

* Spot silver fell 0.1% to $24.53 per ounce. Platinum edged 0.1% down to $1,056.35 and palladium gained 0.2% to $2,055.16.

DATA/EVENTS (GMT)

1400 US Consumer Confidence Oct

1400 US New Home Sales-Units Sept

(Reporting by Nakul Iyer in Bengaluru; Editing by Rashmi Aich)



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Rupee ends 47 paise higher against the dollar on Wednesday

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The rupee ended 47 paise stronger on Wednesday due to dollar inflows in the backdrop of foreign portfolio investors eyeing investments in public offerings by Indian companies and due to the weakening of the greenback.

The Indian unit closed at 74.88 per dollar against the previous close of 75.35.

In intraday trade, the rupee saw a high of 74.83 to the dollar and a low of 75.1350.

Dollar index falls

IFA Global, in a report, observed that the rupee rose against the dollar because the dollar index remained weak and risk sentiment improved with a rise in equities globally.

“The dollar weakened because rising inflation amid a surge in energy prices in global economies is expected to push central bankers for a quick monetary policy tightening that may outpace the US Fed’s. Brent crude oil prices eased a bit and fell below the $85-per-barrel mark, which provided further relief to the domestic currency,” the report said.

However, a sharp rise in the yield on the 10-year benchmark US Treasury note limited any sharp gains in the rupee.

Anindya Banerjee, DVP, Kotak Securities, noted that the rupee appreciated on the back of a sharp rally in Chinese currency and fall in the US Dollar index.

“With oil prices holding steady at around 85 dollars a barrel, rupee has become a major underperformer in the Asian basket. There is scope for the currency to gain further ground, especially if the US Dollar index remains weak and global equity markets maintain the risk on-trend,” Banerjee said.

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RBI remains net purchaser of US dollar in August, BFSI News, ET BFSI

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Mumbai, Reserve Bank of India (RBI) remained a net buyer of the US currency in August after it net purchased USD 3.747 billion from the spot market. In the reporting month, RBI had purchased USD 10.887 billion and sold USD 7.14 billion in the spot market, according to the monthly RBI bulletin for October 2021 released on Monday.

In July, RBI net purchased USD 7.205 billion. It had bought USD 16.16 billion and sold USD 8.955 billion during the month. In August 2020, the central bank had net bought USD 5.307 billion from the spot market, the data showed.

During FY 2020-21, RBI had net purchased USD 68.315 billion from the spot market. It had bought USD 162.479 billion from the spot market and sold USD 94.164 billion during 2020-21, the data showed.

In the forward dollar market, the outstanding net purchase at the end of August was USD 49.606 billion compared with a net purchase of USD 49.01 billion in July. PTI HV RAM

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Gold prices dip on rising dollar, bond yields, BFSI News, ET BFSI

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Gold prices eased on Tuesday, hurt by a stronger dollar and rising U.S. Treasury yields, while investors awaited more cues from Federal Reserve officials on the central bank’s monetary policy shift.

FUNDAMENTALS

* Spot gold fell 0.1% to $1,748.01 per ounce by 0115 GMT, while U.S. gold futures were down 0.3% to $1,747.50.

* The dollar index was up 0.1%, making gold more expensive for holders of other currencies.

* Overnight, benchmark 10-year U.S. Treasury yields rose to their highest level in three months.

* U.S. Federal Reserve officials on Monday tied reduction in the Fed’s monthly bond purchases to continued job growth, with a September employment report now a potential trigger for the central bank’s bond “taper.”

* Fed Chair Jerome Powell is due to testify later in the day before Congress on the central bank’s policy response to the pandemic.

* In prepared remarks, Powell said the U.S. central bank would move against unchecked inflation if needed.

* While gold is often considered a hedge against higher inflation, a rate hike would increase the opportunity cost of holding gold, which pays no interest.

* China’s central bank vowed to protect consumers exposed to the housing market on Monday and injected more cash into the banking system as the Shenzhen government began investigating the wealth management unit of ailing developer Evergrande.

* SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.3% to 990.32 on Monday.

* Poland’s central bank has more than 230 tonnes of gold and plans to expand its reserves, the head of Poland’s Central Bank said on Monday.

* Silver fell 0.8% to $22.47 per ounce.

* Platinum dropped 0.5% to $976.07, while palladium was down 0.6% at $1,952.44.

DATA/EVENTS (GMT) 0130 China Industrial Profit YTD, YY Aug 1400 US Consumer Confid. Final Sept



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Gold steadies below $1,800 as firm dollar, yields weigh, BFSI News, ET BFSI

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Gold prices steadied on Wednesday, after slipping 1.6% in the previous session when it breached the key psychological level of $1,800, as gains in the dollar and a rise in US Treasury yields hurt bullion’s appeal.

FUNDAMENTALS
Spot gold rose 0.1% to $1,796.03 per ounce by 0116 GMT, hovering slightly above the more than one-week low of $1,791.90 hit on Tuesday.

US gold futures were steady at $1,799.40.

The dollar hovered near a one-week peak against major peers.

The benchmark 10-year Treasury note rose as high as 1.385% on Tuesday for the first time since mid-July, increasing the opportunity cost of holding non-interest bearing bullion.

US President Joe Biden will present on Thursday a six-pronged strategy intended to fight the spread of the Delta coronavirus variant and increase vaccinations.

Japan’s economy grew faster than the initially estimated in the April-June quarter, helped by solid capital expenditure, although a resurgence in COVID-19 is undermining service-sector consumption and clouding the outlook.

Russia’s Nornickel, world’s largest producer of palladium and high-grade nickel, has extracted additional metals from waste products as part of new technology it tested to support its 2021 output from its Arctic mines that were hit by flooding, it said on Tuesday.

Venezuela’s gold reserves fell by three tonnes in the first half of 2021 to their lowest level in 50 years, central bank data showed on Tuesday, as President Nicolas Maduro’s cash-strapped government continues selling gold as a source of income.

Silver rose 0.1% to $24.32 per ounce, platinum edged 0.3% higher to $1,001.36 and palladium was up 0.2% to $2,376.37.



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