Unintended consequences: Sanctions on Russia hurt US dollar dominance - News and Current Events | futures io social day trading
futures io futures trading


Unintended consequences: Sanctions on Russia hurt US dollar dominance
Updated: Views / Replies:211 / 1
Created: by kbit Attachments:0

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors – all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you don’t need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 
Thread Tools Search this Thread
 

Unintended consequences: Sanctions on Russia hurt US dollar dominance

  #1 (permalink)
Elite Member
Aurora, Il USA
 
Futures Experience: Advanced
Platform: TradeStation
Favorite Futures: futures
 
kbit's Avatar
 
Posts: 5,872 since Nov 2010
Thanks: 3,301 given, 3,332 received

Unintended consequences: Sanctions on Russia hurt US dollar dominance

The US dollar, the dominant global currency since 1944, may lose some of its luster due to the American-led sanctions against Russia over the turmoil in Ukraine. The greenback has been fading in favor since the global financial crisis in 2008.

The US-led sanctions against Russia may have backfired on the US because it threatens to “hasten a move away from the dollar that’s been stirring since the global financial crisis [in 2008],” Rachel Evans at Bloomberg wrote. In an unexpected turn of events, Hong Kong’s central bank has bought more than $9.5 billion since the start of July “to prevent its currency from rallying as the sanctions stoked speculation of an influx of Russian cash,” she noted.

“OAO MegaFon, Russia’s second-largest wireless operator, shifted some cash holdings into the city’s dollar,” according to Bloomberg. “Trading of the Chinese yuan versus the Russian ruble rose to the highest on July 31 since the end of 2010, according to the Moscow Exchange.”

In March, after Crimea voted to secede from Ukraine and join Russia, the US and European Union imposed visa restrictions on Russians and Crimeans whom they considered “most directly involved in destabilizing Ukraine, including the military intervention in Crimea.” America and the EU expanded their economic punishment later in the month, as well as twice in April, once in May and twice in July, according to Debevoise & Plimpton, an international financial law firm.

In the latest round of sanctions, issued on July 29, the European Union imposed broader sanctions to “limit access to EU capital markets for Russian State-owned financial institutions, impose an embargo on trade in arms, establish an export ban for dual use goods for military end users and curtail Russian access to sensitive technologies particularly in the field of the oil sector.” President Barack Obama announced the US would also be “blocking the exports of specific goods and technologies to the Russian energy sector,” “expanding sanctions to more banks” and “suspending credit that encourages exports to Russia.”

The dollar’s dominance has shrunk over the last 13 years, from 72 percent of global currency reserves to 61 percent today, threatening the position that the greenback held since the Bretton Woods Conference in July 1944, when delegates from 44 Allied countries met in New Hampshire to hammer out a way to regulate the international monetary and financial order after the conclusion of World War II. Each signatory agreed to adopt a monetary policy that maintained the exchange rate by tying its national currency to the US dollar and to prevent competitive devaluation of its money. At the time, the dollar was pegged to the price of gold. In 1971, President Richard Nixon took the US off the gold standard, and the American banknote became the reserve currency around the world. Certain commodities, like oil, are priced in US dollars, regardless of the country of origin.

“The crisis created a rethink of the dollar-denominated world that we live in,” Joseph Quinlan, chief market strategist at Bank of America Corp.’s US Trust, which oversees about $380 billion, told Evans. “This nasty turn between Russia and the West related to sanctions, that can be an accelerator toward a more multicurrency world.”

The wording of the economic penalties may also negatively impact the greenback’s standing as the world’s reserve currency.

Historically, US sanctions prohibit companies from using US dollars in the targeted country (like Iran or Sudan), Frances Coppola wrote in Forbes in mid-July. But the present sanctions on Russia focus on “US persons” providing companies with long-term financing in any currency. Some of the targeted businesses include those in the energy industry, including Rosneft and Novatek, and those in the financial industry, like Gazprombank (the financial arm of gas giant Gazprom) and the Russian state development bank.

“It is perhaps not obvious why an energy company would want to borrow in Euros, since oil and gas are priced in dollars,” Coppola wrote. “But borrowing in Euros could be a way round the sanctions.”

Banks could also use derivatives “or even just basic foreign exchange facilities,” she added. But with the EU joining in on the sanctions, Euro funding may be “rather hard to come by.” But, Coppola noted, “It’s still clever.”

http://rt.com/usa/178500-russian-sanctions-dollar-dominance/

Reply With Quote
 
  #2 (permalink)
Elite Member
London + UK
 
Futures Experience: Advanced
Platform: Proprietary Analytics
Broker/Data: Multiple broker + Multiple feed
Favorite Futures: Currently European and US equities
 
sands's Avatar
 
Posts: 432 since Dec 2013
Thanks: 223 given, 205 received

My rough measure of currency dominance, is in what currencies impact gold, the $ is still king despite the emergence of strength from the Euro.

Reply With Quote

Reply



futures io > > > > Unintended consequences: Sanctions on Russia hurt US dollar dominance

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

Jigsaw Trading: TBA

Elite only

FuturesTrader71: TBA

Elite only

NinjaTrader: TBA

Jan 18

RandBots: TBA

Jan 23

GFF Brokers & CME Group: Futures & Bitcoin

Elite only

Adam Grimes: TBA

Elite only

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Russia bans all U.S. food, EU fruit and vegetables in sanctions response kbit News and Current Events 2 August 7th, 2014 02:45 PM
Russia's billionaires 'horrified' at sanctions..... kbit News and Current Events 1 July 22nd, 2014 12:41 AM
U.S. hits oil giant Rosneft, other firms with toughest Russia sanctions kbit News and Current Events 0 July 16th, 2014 11:50 PM
5 unintended consequences of Draghi’s Big Bazooka kbit News and Current Events 0 June 4th, 2014 10:21 PM
And Now It's Time To Consider The Unintended Consequences... GridKing News and Current Events 0 March 4th, 2012 03:27 AM


All times are GMT -4. The time now is 11:04 AM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-12-18 in 0.08 seconds with 19 queries on phoenix via your IP 54.226.113.250