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Middle East to Abandon Dollar? - by Rob Mackrill

We have a good idea what that means for the dollar, but what does it mean for the dollar-peg countries? (Dollar-Peg countries are those exporting nations that have fixed the exchange rates of their currencies to the greenback...). One region where things could change is the Middle East. The turn of the year saw the creation of a new Middle Eastern trade bloc, the Gulf Cooperation Council. The bloc numbers six Persian Gulf states: Saudi Arabia, Bahrain, United Arab Emirates, Kuwait, Qatar and Oman. Among this new blocs objectives is to promote trade among its 35m souls...and the creation of a single currency. The target for introducing the Khaleeji is 2010, less than two years away.


Sterling Riding for a Fall - by Brian Durrant

In 1968 Andy Warhol famously said that "In the future everyone will be famous for 15 minutes." Recently, Richard Arens, a US trader, became the first person ever to pay $100 for a barrel of crude oil. For this achievement (on which he took a subsequent loss of $600) he received a certificate and of course, 15 minutes of fame. Meanwhile, this year is shaping up for more eye-catching price records. Someone might be the first to pay $1,000 for an ounce of gold. And it is not just commodities that are making the record books. The pound is registering all-time lows against the euro (although admittedly the price history here only goes back to 1999)...


The Inevitable Fate of Paper Money - by Lord William Rees-Mogg

All paper money has historically proved defective in terms of one of the classic functions of money. Nineteenth century economists such as William Stanley Jerons a great economist by any test taught that money ought to act as a store of value. There is no fiduciary issue which has survived the period since the end of the Second World War in 1945 without very substantial depreciation. Even comparatively respectable currencies, like the pound or the dollar, have lost a significant proportion of their purchasing power since 1945, and are expected to continue to lose purchasing power for the foreseeable future...


The Housewives That Move Markets - by Rob Mackrill

Who has the clout to move a market? Central banks...investment banks...hedge funds...housewives... Housewives!? Well, on occasion... Last summer reports speculated on the behaviour of the archetypal Japanese housewife Mrs Watanabe as to the future course of the yen carry trade. In case you missed it, the yen carry trade is - or was - the business of selling yen and reinvesting the proceeds in the likes of US and New Zealand dollar-denominated government bonds which paid considerably more interest than the 0.5% on offer at home in Japan...


The City New Year Service - by Revd Dr Peter Mullen

Over the last ten years in the City I have heard some pretty odd things said about the Christian faith. I have heard right wing people say that they dont go along with the miracles and the resurrection and all that stuff, but that religion is good as a basis for morality. This seems to miss the point that to base your morality on a lie doesnt seem to be a good place to start...


Is the Pound Doomed to Follow the Dollar's Decline? - by Rob Mackrill

Ben Bernankes Fed is ready for aggressive cuts. Mmm, more cheap money. US stocks liked what they heard...so did gold. The Dow which has been pretty much in freefall for the year to date went up 117 points yesterday and gold homed in on $900. The news has done little for European bourses, though. Well, whats to celebrate for European business from a yet weaker dollar? Here in London its raining and the skies are leaden grey. The FTSE 100 index looks something similar. Its sunk below 6,200 as it continues its down trend for the year...


The Dollar: Their Currency... Our Problem - by Brian Durrant

News that the dollar has recorded record lows against the euro on the foreign exchanges is taken by some as an ominous indication that the long period of US economic supremacy is at an end. In other words, we are experiencing a seismic shift in the global economic balance of power towards Europe. Is this really the case? The causes of dollar weakness are varied but the consequences are far more important to us...


Sell the Dollar, Buy the Rouble - by Rob Mackrill

Looking ahead a little... Where should we look to make some money in 2008? Therell be plenty of suggestions coming up soon enough, but heres a few from the likes of Goldman Sachs, Jim Rogers and Stephen Roach to get the juices flowing... Last week Goldman Sachs came up with the pick of its currency trading ideas for 2008. These included...


Selling Oil For An Unguaranteed Currency - by Rob Mackrill

Abdurrahman Salim Atiqi, Kuwait's one-time oil minister sneered back in 99: "What is the point of producing more oil and selling it for an unguaranteed paper currency?" If the Kuwaiti oil minister was sneering then, what would his demeanour be today? What's beyond sneer...disgust? Perhaps not. They are getting almost ten times the dollars for their sticky black goo but the unguaranteed paper currency they get in exchange is worth less. It's lost a quarter of its value against the euro and around two-thirds against the ultimate currency, gold.


The Unfashionable Dollar - by Garry White

Gisele is a really savvy lady. News emerged today that the world's-richest model has started to refuse to be paid in dollars because of the outlook for the currency. Gisele is said to earn $30 million a year and her sister told Bloomberg that the pouting Brazilian now prefers to be paid in euro and euro alone. The dollar really is severely out of fashion. If you dont act now, you could find yourself wearing the financial equivalent of last season's Jimmy Choos...



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