Yuan rises high above dollar - WSJ

Business | interns

The yuan rose to its strongest level against the dollar in the currency’s modern era leading to gains in China’s stock market

China signals end to yuan's two-year peg to dollar - Bloomberg

Business | Jeff Winkler (admin)

The decision was made after the world’s third-largest economy improved, the central bank said in a statement on its website, without indicating a timeframe for the change

Europe's currency collapse - WSJ

Business | interns

Euro sinks below $1.20 on fresh debt fears

Sex and bribes: Reserve Bank of Australia exposed - Sydney Morning Herald

Business | Jeff Winkler (admin)

An Australian Reserve Bank currency firm was willing to supply prostitutes and pay bribes to foreign officials to win banknote supply contracts

To audit or not to audit?

Opinion | Richard Olivastro

The Fed is the central bank with monopoly power and the power of the currency. That single action has had profound impact on your ancestor’s money, your parent’s money, and now on your money. Try going down to your local bank and asking for a dollar in exchange for its value in gold

Geithner visits Beijing to cool currency tensions - AP

Business | interns

U.S. Treasury Secretary Timothy Geithner met with a Chinese vice premier on Thursday and discussed economic ties in a sign the two sides might be trying to cool their rhetoric in a dispute over China’s currency controls

Trying to sink a floating dollar - Reuters

Business | interns

White House spokesman Robert Gibbs said that the President wants China’s yuan currency to be market-based

Dollar reigns supreme, debt, deficit and all - USA Today

Business | AJ

No other country has a currency as strong or as well-regarded as the U.S. has, even with its current fiscal woes

China exports leap 46 percent in February - Los Angeles Times

Business | interns

China’s exports rose 46 percent in February from a year earlier, beating expectations and setting the stage for more calls to increase the value of the Chinese currency, analysts say

No consensus on euro crisis

Business | AJ

The European single currency is facing an ‘inevitable break-up’ a leading French bank claimed yesterday

The Euro gets a strong start in February - BENZINGA

Business | AJ

The Euro enjoyed a stronger night after losing three percent against the Dollar and six percent against the Yen during January

Strategist: Future reserve currency is Euro

Business | AJ

The euro will become the world’s favorite reserve currency because Europe has a better growth strategy than the US, David Roche, global strategist at Independent Strategy told CNBC

China's gamble could prove disastrous

Business | AJ

In order to stimulate its economy, Beijing re-pegged its currency to the dollar. Doing so, however, has not only increased global economic imbalances — it could ultimately harm China itself.

An International Monetary Fund Currency to Rival the Dollar? Why Special Drawing Rights Can’t Play That Role (Development Policy Analysis)

| Alex Beehler

To alleviate the global recession, the G-20 group of

nations recently agreed to authorize the International

Monetary Fund to allocate $250 billion worth of

Special Drawing Rights — the IMF’s unit of account — to its

member states. This sparked much discussion on whether the

SDR could become a new international currency, rivaling the

U.S. dollar. Speculation was further fueled by the suggestions

of Chinese officials that SDRs could displace the dollar in foreign

exchange reserves. However, the SDR is not a currency

and has no chance of becoming one.

Today the SDR has two roles: as a unit of account, and

as a line of credit between IMF members. Neither role

makes it a currency. The SDR’s value is defined as equal to

that of a basket of four currencies: the U.S. dollar, the euro,

the yen, and the pound sterling. Member-states occasionally

agree to issue SDRs to themselves, and these serve as

mutual lines of credit, providing needy countries access to

hard currency. SDR allocations represent purchasing power

through a credit facility, not through creation of a new

currency.

Chinese officials and some leading economists want a

greater role for SDRs in foreign exchange reserves. This

would shift currency risk away from China to the IMF. But

other IMF members would have to pick up that risk, and

there is no reason for them to subsidize China. Underlying

the SDR issue is a global struggle for political power. But

China has a large and growing GDP and tax capacity, which

may overtake that of the United States one day. Before then,

the Chinese yuan will probably become convertible, and

become a highly sought-after reserve currency in its own

right. The real currency challenge to the dollar will come

from the yuan, not the SDR.To alleviate the global recession, the G-20 group of

nations recently agreed to authorize the International

Monetary Fund to allocate $250 billion worth of

Special Drawing Rights — the IMF’s unit of account — to its

member states. This sparked much discussion on whether the

SDR could become a new international currency, rivaling the

U.S. dollar. Speculation was further fueled by the suggestions

of Chinese officials that SDRs could displace the dollar in foreign

exchange reserves. However, the SDR is not a currency

and has no chance of becoming one.

Today the SDR has two roles: as a unit of account, and

as a line of credit between IMF members. Neither role

makes it a currency. The SDR’s value is defined as equal to

that of a basket of four currencies: the U.S. dollar, the euro,

the yen, and the pound sterling. Member-states occasionally

agree to issue SDRs to themselves, and these serve as

mutual lines of credit, providing needy countries access to

hard currency. SDR allocations represent purchasing power

through a credit facility, not through creation of a new

currency.

Chinese officials and some leading economists want a

greater role for SDRs in foreign exchange reserves. This

would shift currency risk away from China to the IMF. But

other IMF members would have to pick up that risk, and

there is no reason for them to subsidize China. Underlying

the SDR issue is a global struggle for political power. But

China has a large and growing GDP and tax capacity, which

may overtake that of the United States one day. Before then,

the Chinese yuan will probably become convertible, and

become a highly sought-after reserve currency in its own

right. The real currency challenge to the dollar will come

from the yuan, not the SDR.
Swaminathan S. Anklesaria Aiyar is a research fellow at the Cato Institute’s Center for Global Liberty and Prosperity and has been editor of India’s two biggest financial dailies, The Economic Times and Financial Express.