Currency is a method of payment which can be used to purchase goods and services. Each country has its own currency – if it wants to trade with another country, exchange rates have to be considered. Monetary policies are set by the central bank or the finance ministry.
World Snapshots: Many countries use the same name for their currencies – Australia, Canada, Hongkong and the United States. In contrast, several european countries have chosen to use the same currency, the Euro, to become more competitive and create a single trading zone. Currency convertibility is important for trade and investing. World economies and financial markets are increasingly connected - latest currency news reports give a snapshot of how economies are coping in these times.
Let’s take a look at some of the latest currency news headlines for an idea on what is happening across the world.
- Rupee depreciation in the range of 15-20% with foreign investment and holdings dropping by more than $350 million. This is an indicator of price inflation, high fiscal deficits and also higher interest rates for any kind of borrowing.
- Dollar Crisis: Due to the collapse of major banks and the housing markets due to questionable investment tactics, the US has been in a recession for the last 3 years. It is on the road to recover and has again become the currency of choice for countries to invest in – the rupee is trading at its lowest at Rs.53.06 on December 30, 2011.
- Euro Crisis: Europe and the Euro have been making latest currency news headlines for a while now with Greece, Portugal and Spain defaulting on loans and needing bailout packages. All these countries have enacted new austerity measures and instituted deep cuts in services to get the economies back on track. As there are 15 or more countries in the European Union, it is a tricky issue to manage fiscal issues as problems in the Eurozone countries are all a little different from each other. This takes time to get sorted out and all eyes are on the European Central Bank for updates.
Other countries making latest currency news headlines are Turkey, Russia and Canada. Their currencies are getting stronger as they are able to keep trade deficits low. Canadian government bonds are a much sought after investment. The Ruble is on a rebound against the dollar as crude oil prices are raising and Russia is a major player in the oil market. The Turkish lira and bonds strengthened when Turkey divested itself of $750 million dollars in auctions.
The Chinese Renminbi has made steady gains and one of the better performing currencies in the world. It is not a fully convertible currency yet, just like the Indian Rupee. Some countries have expressed concern over this, but China is coming out and making its mark as a player on the world stage.