2023-11-16 09:21

Copyrighted Image by: Reuters. BRUSSELS - The European Central Bank (ECB) has commenced the Digital Euro Preparation Phase, marking a significant step forward in the development of a centralized digital currency for the 19 European Union countries that use the euro. This move comes after a two-year investigation into the feasibility of a digital euro, which is set to offer a secure and reliable alternative for digital payments. The ECB's initiative will explore operational details such as the possibility of creating a specialized digital euro application or its integration into banks' existing applications. For those without access to traditional banking, physical cards could facilitate digital euro transactions, ensuring inclusivity. The digital euro aims to function both online and offline and may be available to non-resident citizens of the euro area if they have an account with a euro area payment service provider. To maintain privacy, offline transactions will ensure payer-recipient confidentiality. In anticipation of any potential financial crisis scenarios that might cause a shift towards Central Bank Digital Currencies (CBDCs), the ECB plans to implement maximum balance thresholds for the digital euro accounts, initially set between €3,000 to €4,000. The preparation phase will span two years and include extensive testing across various domains. It will also involve refining the Digital Euro Scheme Rulebook and establishing a process for selecting service providers. This phase is expected to occur in tandem with legislative discussions. The ECB has emphasized that the digital euro will complement cash rather than replace it, offering benefits such as smoother cross-border transactions, enhanced security and privacy protection, consumer convenience, and reduced transaction costs. According to G+D Currency Technology, who is assisting in clarifying misconceptions about the initiative, the design of the digital euro prioritizes privacy and data protection, preventing citizen control or monitoring. Dr. Wolfram Seidemann, CEO of G+D, highlighted that the digital euro would merge the benefits of cash with the convenience of digital payments without additional costs or security risks for citizens. This new era of digital finance reflects a transition mirroring the evolution from barter systems to digital currencies, providing consumer convenience within a modernized governmental monetary ecosystem. https://www.investing.com/news/forex-news/ecb-advances-digital-euro-with-new-preparation-phase-93CH-3236045

2023-11-16 08:54

Copyrighted Image by: Reuters. The New Zealand dollar (NZD) has stabilized after a period of gains, with market analysts from UOB Group suggesting a sideways trading pattern in the near term. The NZD recently saw an uptick, reaching a peak of 0.6013 on Tuesday and closing slightly higher at 0.6023 on Wednesday, marking a modest 0.25% increase from the previous day's value. Analysts from UOB Group noted that while the NZD had risen to the forecasted limit of 0.6055 before retreating, it would need to surpass this threshold for further gains. They predict that in the next 1-3 weeks, the NZD could strengthen, provided it breaks above 0.6055, setting the stage for a potential advance toward 0.6100. This outlook is contingent on the currency maintaining above the strong support level of 0.5920. Today, however, the upward momentum has waned, with predictions indicating that the NZD is likely to trade within a narrow range of 0.5980 to 0.6045, as opposed to climbing further. In broader market movements, both the Australian dollar (AUD) and NZD weakened recently, with the NZD/USD pair hovering around 0.6000, which represents a 0.30% drop from New York's closing levels on Wednesday. The AUD/USD pair fell below 0.6500 after unwinding gains following positive job data. The shift in currency strength occurs amidst a backdrop of negative equity sentiment and lower US futures, with regional markets under pressure. The Japanese yen has shown strength against both AUD and NZD as the USD/JPY pair declined to near 151.25. Other major currencies have remained relatively stable while US Treasury yields have extended gains within a narrow band. https://www.investing.com/news/forex-news/nzd-stabilizes-after-recent-gains-forecast-to-trade-sideways-93CH-3236029

2023-11-16 08:33

Copyrighted Image by: Reuters Investing.com - The U.S. dollar edged higher in early European trade Thursday, holding its ground after a rebound from sharp losses earlier in the week as traders digested recent economic data and the potential impact on thinking at the Federal Reserve. At 03:30 ET (08:30 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, rose 0.1% to 104.350. The index suffered from volatile trading this week, gaining 0.3% on Wednesday following a 1.5% plunge the previous day. Retail sales, spending bill help the dollar The dollar drew support from better-than-expected retail sales numbers on Wednesday, after plunging as data showed cooling U.S. consumer prices raised doubts over whether the Federal Reserve would increase interest rates further in this particular cycle. Also helping the U.S. currency was the news that the U.S. Senate passed a stopgap spending bill and sent it to President Joe Biden to sign into law before a weekend deadline. “The release of US October retail sales failed to kindle this week's dollar bear trend and the Senate's support for a stopgap funding bill has removed the risk of a dollar bearish government shutdown at midnight on Friday,” said analysts at ING, in a note. There is more data to digest Thursday, in the form of weekly jobless claims, industrial and manufacturing production for October, and the Philadelphia Fed manufacturing index for November, as well as a series of Fed speakers. Euro looks to Lagarde for guidance In Europe, EUR/USD edged lower to 1.0844, but remains near to its highest level since August seen earlier in the week. There are several central bankers, including ECB President Christine Lagarde, set to speak at various events Thursday, and traders will be looking for further clues of their thinking regarding interest rates. “Perhaps helping the euro this week has been the lack of key eurozone data. Over the last couple of months, eurozone data releases have pulled the rug from under any emerging EUR/USD rally and have emphasised the pessimism in this trading bloc,” ING added. GBP/USD fell 0.3% to 1.2382, with sterling continuing to weaken after Wednesday’s data showed British inflation cooling by more than expected in October. U.K. CPI plunged to 4.6% on an annual basis in October, from 6.7% in September, with the fall in the annual CPI rate the biggest from one month to the next since April 1992. Despite this hefty drop, the Bank of England has warned that the "last mile" of getting it down will be tougher, forecasting that inflation will only return to its 2% target in late 2025. Japanese yen on intervention watch In Asia, USD/JPY traded flat at 151.36, weakening past the 151 level again following overnight strength in the dollar, which put traders on watch for any currency market intervention by the government. USD/CNY rose 0.1% to 7.2533, with the yuan coming under pressure from data showing a sustained decline in Chinese house prices. https://www.investing.com/news/forex-news/dollar-edges-higher-consolidating-after-volatile-period-3236012

2023-11-16 08:30

Copyrighted Image by: Reuters. SINGAPORE - Cryptocurrency brokerage Paxos has received initial approval from the Monetary Authority of Singapore (MAS) to issue a U.S. dollar-backed stablecoin, marking a significant step in the company's expansion efforts in Asia. This in-principle approval under the Payments Services Act (PSA) allows Paxos to offer digital payment token services while awaiting full authorization. Walter Hessert, Paxos' Head of Strategy, emphasized the strong global demand for U.S. dollars, which non-U.S. consumers often struggle to access safely and reliably. He indicated that Paxos' new offering is poised to cater to this demand, especially during a period where the appetite for stablecoins is on the rise. To ensure transparency, Paxos commits to publishing monthly attestation and reserve reports for its stablecoins. The brokerage firm Bernstein has projected a dramatic increase in the stablecoin market, expecting it to balloon from $125 billion to an astounding $2.8 trillion within the next five years. Paxos aims to capitalize on this growth by collaborating with enterprise clients to launch its USD stablecoin in Singapore upon receiving full regulatory sanction. This move comes as part of Paxos' broader strategy to extend its international footprint, having already facilitated the issuance of PYUSD, a USD-backed stablecoin for PayPal (NASDAQ:PYPL), introduced on August 7. The company's relationship with stablecoins also includes minting Binance's now-defunct BUSD until it was ordered by the New York Department of Financial Services to cease issuance due to regulatory concerns. Paxos' journey in Singapore began over a year ago when it received an operating license allowing it to provide tokenization, custody, and trade services. The recent PSA approval builds on this foundation and aligns with MAS' final rules for stablecoins released on August 15, targeting non-bank tokens linked to G10 currencies with circulation exceeding $3.7 million. As Paxos awaits full approval from MAS, the company's strategic movements suggest a keen focus on establishing a strong presence in the rapidly evolving digital currency landscape of Singapore and beyond. https://www.investing.com/news/cryptocurrency-news/paxos-gains-initial-mas-approval-to-issue-usd-stablecoin-in-singapore-93CH-3236007

2023-11-16 08:14

The South African rand, after experiencing its most significant two-day gain since July earlier this week, has seen its rally falter as of today. The currency was trading at 18.2200 against the dollar at 0632 GMT, marking a slight decline of 0.1% from its previous close. This comes after a surge in the rand's value following softer-than-expected US consumer inflation data released on Tuesday, which had initially boosted risk-sensitive currencies like the rand. The initial optimism had also been fueled by strong local retail sales figures and a spike in demand for South African bonds, with Tuesday witnessing the highest net purchase of bonds in four months and the biggest daily gain in the Bloomberg EM Local Currency South Africa Bond Index since July. Additionally, Wednesday saw the rand extend its gains by 0.4% to 18.1566 per dollar in Johannesburg, culminating in an overall two-day gain of 3.1%. However, analysts at Rand Merchant Bank have cautioned that the rand's rally could slowly unwind without key US data to sustain the momentum. Similarly, Andre Cilliers from TreasuryONE anticipates consolidation and profit-taking in the market. The effects of this week's currency movements are also evident in South Africa's benchmark 2030 government bond, which showed strength in early trade today with a yield drop of 1.5 basis points to 10.190%, reflecting the global market influences on the rand. Despite this week's fluctuations, there remains a cautious outlook for the future of South Africa's currency. Bloomberg's forecast model suggests a potential dip in the rand by the end of 2024, indicating that traders and investors are still hedging their bets on the currency's long-term trajectory. The rand's performance is a key indicator for South Africa's economic health as it impacts inflation and borrowing costs. The carry trade appeal of the rand has been bolstered by high yields and falling volatility, with a return of 4.7% this quarter on the dollar-rand carry trade. https://www.investing.com/news/forex-news/south-african-rand-rally-falters-amid-market-consolidation-93CH-3235982

2023-11-16 08:05

Copyrighted Image by: Reuters NEW DELHI - In a move that reflects the current global oil market trends, the Indian government announced significant reductions in the windfall tax on diesel and crude oil today. This decision comes as the latest adjustment in a series of tax changes that respond to fluctuating international oil prices. The tax on crude oil has been cut from ₹9,800 ($117.70) per tonne to ₹6,300 ($75.70) per tonne. In a more pronounced reduction, the windfall tax on diesel has been halved from ₹2 to ₹1 per litre. These changes are part of the Centre's ongoing strategy to align domestic tax rates with the international market. This pattern of tax reduction began earlier in October when the Centre reduced the windfall tax on crude from ₹12,100 per tonne to ₹9,050 per tonne and eliminated the windfall tax on aviation turbine fuel entirely. These proactive measures have been taken in response to a noticeable drop in the average price of India's imported crude oil, which was recorded at $84.78 per barrel this month, down from $90.08 in October and $93.54 in September. The introduction of the windfall tax occurred in July last year when India decided to levy additional taxes on crude oil producers and extend these taxes to exports of gasoline, diesel, and aviation fuel. The government's rationale was to address the domestic refiners' preference for exporting due to lucrative refining margins abroad rather than prioritizing domestic markets. To ensure that domestic tax rates remain in step with global oil prices, the Centre reviews these rates every fortnight, taking into account the average oil prices from the preceding two weeks. This responsive approach aims to balance fiscal needs with market realities, providing stability for both producers and consumers within the country's energy sector. https://www.investing.com/news/commodities-news/india-slashes-windfall-tax-on-diesel-and-crude-oil-93CH-3235977