Yuan to Continue Upward Move

In what can only be called a dramatic change of direction, the upward move of the Chinese yuan has caught a lot of investors off guard, as their attention, in the currency market has mostly been on the Japanese yen, once it implemented a policy to drive down its value.

Meanwhile, the yuan has moved strongly in the opposite direction, strengthening against the U.S. dollar in a meaningful way since the beginning of 2013.

More on strength of yuan

Citigroup (NYSE:C) Says Real Rises on Retail Sales

Citigroup’s (NYSE:C) Dirk Willer said today that increased retail sales aided the Brazilian real in reaching it third gain in the last four days, as retail sales in Brazil rose to their highest levels on record.

Retail sales in Brazil rose by 15.7 percent in March over the year before, surpassing analysts' projections of 14 percent.

The central bank of Brazil raised interest rates in April to combat the expanding economy, increasing benchmark borrowing costs from 8.75 percent to 9.5 percent.

Europe's decision to bailout out the irresponsible, socialist/welfare countries had generated concerns over whether or not investors would ignore assets in Brazil specifically, and Latin America in general.

Willer said, “The market reacted well to retail sales. The pressure point has largely been removed after the European bailout package was announced.”

Citigroup (NYSE:C) On Canadian Dollar

The Canadian dollar will regain parity with the U.S. dollar, according to Citigroup (NYSE:C), and should find support in the range of 1.0207 to 1.0225.

In a note to clients, Citigroup said in the short-term the Canadian dollar should reach 0.9931.

Last week's market turmoil brought the loonie down, but that won't last long, as the fundamentals are too strong to keep it at those levels.

The Canadian dollar is increasingly being thought of as a safe haven investment, as the economy of Canada remains strong, and they are positioned for a profitable and long run because of the natural resources available in the country, and the strong demand for those resources from China and other areas of the world, which will go on for many years.

The Canadian dollar will rise with the economic growth of the country, and with little or no sovereign debt issues, is being eyed by investors as an alternative to the U.S. dollar, along with gold.

Weatherford International (NYSE:WFT) Blames Losses on Charges

In reporting a loss for the first quarter, Weatherford International (NYSE:WFT) blamed the losses on charges related to currencies, especially the devaluation by Venezuela of their currency.

Even so, after all the charges, Weatherford still fell short of analysts' expectations, as profits plunged even after removing the charges from the equation.

Much of that is attributed to the increased cost of doing business.

Excluding charges, earnings dropped from 27 cents a share last year during the same quarter to 6 cents a share the latest quarter. Overall losses came in at $40 million, or 5 cents a share, in contrast to profits last year of $164.8 million, or 23 cents a share; a disaster whatever way they want to spin it.

Revenue for the quarter grew to $2.34 billion, a 4 percent gain, while analysts had looked for revenue of $2.54 billion and earnings of 9 cents a share.

Most of the reason for the drop in earnings is from the weak Latin American market, which has been the main growth engine of the company. Earnings in that region plummeted by 66 percent, much of that from the decline in drilling in Mexico.

China Ready to Revalue Renminbi?

China about to revalue renminbi?

Rumors on the street are China is close to announcing they are ready to revalue their currency, although we shouldn't expect much of a move there, and if the rumors are true, it will be a relatively small increase in value in the renminbi.

What is expected is a very quick but low revaluing of the Chinese currency, probably to placate politicians in the U.S., who for the most part, are clueless over it all, but are pressuring the Chinese from a populist position.

Concerns over speculators entering the market will evidently be handled by the Chinese saying the renminbi can just as easily be lowered in value as increased in value, as they want to keep the possible huge influx of investment that could come into China from assuming an inevitable upward climb in value which could hurt the country.

Goldman Sachs (NYSE:GS): Commodity 'Price Spikes'

Commodity prices to explode upward

Goldman Sachs (NYSE:GS) said commodities may be in for “violent price spikes” as increasing demand from emerging markets leads to significant shortages. The constraints on supply is the second factor leading to the conclusion from Goldman.

Contrary to alleged manipulation of markets by speculators, the commodity price increases coming up will be related to supply, demand and storage, not investors.

Major price movements in commodities are largely related to when commodity inventories are low. When they're readily available, commodity prices are more stable.

Goldman added there's no proof or evidence currency movements affect commodity prices.

Marc Faber: New Gold Standard Already Created

Marc Faber on Gold

Marc Faber recently sad in an interview that we have already entered into a new gold standard; one created by the free market and not anyone else.

Faber cited the increasing acquisition of physical gold by investors as well as the growing number of exchange traded funds.

In his interview Faber recommended that people flee cash and bonds over the next decade and buy gold and some equities.

Gold will continue to rise in value against all paper currencies which are depreciating said Faber.

Goldcorp (NYSE:GG) Still Looking Good

Goldcorp Controlling Costs

Goldcorp (NYSE:GG) has been dismissed lately based on the assumption they're fully valued with nowhere to go. That seems to be an incorrect way to view the company, as they seemed poise to contiue on strong in the ongoing bull gold market.

While the price of gold isn't the only factor in determining the share price movement of a gold company, as evidenced today with mixed results from the market even though gold solidified.

One key strength of Goldcorp, similar to Yamana Gold (NYSE:AUY), is it has among the lowest costs among the major gold mining companies, which allows them a lot more room for things like currency fluctuations and temporary price swings in the price gold, among other factors.

In spite of numerous factors, including the currency issue, which hammered Goldcorp last year, the company still was able to pay about $132 million in dividends. That's not easy to do in the climate they operated under, even with gold prices rising.

Again, it's the control of its operational costs which gives the company the ability to be much more flexible than most of its key rivals. That not only allows the company to share the wealth, but also provides them with liquidity to make key acquisitions that may become available to them.

The bottom line of controlling costs for Goldcorp is the flexibility it offers. That and rising gold prices, even with the risk of currency exchanges, makes them a solid gold company for those willing to invest in them.

Goldcorp Controlling Costs

George Soros and British Pound

British Pound Plunging

The ongoing plunge in value of the British pound brings to mind the millions earned by George Soros when he bet against it in September 1992.

Concerns over the rate of the fall in value of the pound has some concerned over how that will impact the value of stocks, commodoties and trade around the world.

The pound has been in even worse shape than the euro over the last month and a half or so, and it remains to be seen how it could effect the global scene.

It makes you wonder if old George Soros is back in the picture, or at least someone like him.

British Pound Plunging

George Soros: Euro May Collapse

George Soros Euro Collapse

Although George Soros speaks out of both sides of his mouth, as evidenced by his remarks that gold is in a bubble while he had recently invested millions into the metal, he still is interesting to listen to, as you know whether he's speaking the truth or not, that he is interested in what he's talking about, and that's the case with his recent comments that the euro may not survive and be in danger of a total collapse.

One thing you can be sure of from the comments of Soros is he has a stake in the euro, or he wouldn't be talking about it.

Soros says the euro may not survive just from the sovereign risk threat from Greece, although many think the PIIGS overall are much more of a risk than if Greece itself only collapsed. The pigs are Portugal, Ireland, Italy, Greece and Spain.

Many think the euro could survive a collapse of Greece, but a collapse of some of the other countries at the same time, or near the same time, would probably be the end of the European union and the euro.

Soros obviously is attempting to influence the markets to his investment advantage; not the first time he's tried and succeeded at doing it.

George Soros Euro Collapse

Chile Peso in Earthquake Aftermath

Trading Chile Peso

As relief efforts from agencies outside the country send a windfall of U.S. dollars their way, the Chilean peso is expected to experience a nice upward push in value against the dollar during that time.

In 2009 the Chilean peso grew in value against the U.S. dollar by close to 20 percent. It was dropping against the greenback in the first two months of 2010 based on new currency reserve requirements in the country concerning private pension funds.

This temporary situation could be a good play going forward for currency traders looking for some degree of predictability in their forex trading.

Trading Chile Peso

George Soros Betting Against Euro

George Soros and Euro

George Soros is swooping in like a vulture on a carcass with the euro, as the currency expert who has made the vast majority of his fortune betting on currencies, is looking to make another killing by betting against the euro.

Via his Soros Fund Management company, Soros is putting a huge amount of resources to generate what will eventually be an extraordinary sum of money made from the euro crisis stemming from the PIIGS in southern Europe: Portugal, Ireland, Italy, Greece and Spain.

Soros isn't alone though in his hedge fund focus, as others are salivating to get into what looks like one of the surest bets around to make a once-in-a-lifetime deal on.

George Soros and Euro

Commodity Currencies Poised for Growth

Commodity Currencies

Although it's impossible to know the rate of growth and/or strength commodity currencies will grow against the U.S. dollar, it's going to be a good season of time for them as commodity prices are set to increase for some time to come.

When talking of commodity currencies, we're referring to the dollars of Australia, Canada and New Zealand; all countries which rely on commodities as a large part of their economies.

History has shown that for the most part these three currencies move in unison with one another based on how the price of commodities are moving, and so all of them should be a good bet over the next couple of years to strengthen against the U.S. dollar, which continues to collapse in value.

China's seeming resumption of economic domestic growth is a good sign for these three currencies as well, as it implies China is buying up commodities again in preparation for more growth, assuming it's for that purpose and not to protect its own exports and currency primarily, although it definitely entails that.

Commodity Currencies

Few People Invested in Gold

One of the major reasons cited by a number of experts as to why we're not in a gold bubble is the fact that very few in main street America have gravitated toward gold as a key part of their investment strategy.

When the time comes when people respond to gold increasing in price to the point it can't be ignored, a lot of the upward movement will already have happened, and the resultant surge in the price of gold at that time probably will be a bubble. But for now, it's not even close to that point, and little is changing in the printing of money by central banks around the world to change gold from being an important investment over the next decade.

Investors like Jim Rogers say they wouldn't think of selling gold any time soon, and once it drop in price some, are ready to buy up even more.

Even so, silver is probably the better way to invest in commodities and precious metals at this time, as it's still 70 percent off its highs, while gold continues to flirt with highs on a daily basis.

Other good commodity investment vehicles to participate in for most would be commodity indexes, according to Jim Rogers.

Rogers also believes investors should familiarize themselves with foreign currencies, as there will be a lot of opportunities in the years ahead to make money in that commodity sector as well.

Rogers has been buying the U.S. dollar, even though he knows its doomed over the long term. He believes there will be a nice upward movement based solely on how bearish most investors are in the greenback at this time. Over the long term, he still remains bearish on the U.S. currency.

Commodities: Archer Daniels Midland Profit

Commodity company Archer Daniel's Midland doubles net income


At a glance it looks like Archer Daniels Midland (ADM) had a great quarter, as net income more than doubled. In reality, the company gains were primarily from lower tax rates and change in accounting concerning inventory valuations.

A couple other factors in the rise in profits were increased sales prices as well as currency exchange-rates. Because Archer Daniels has less global exposure, they were able to perform better than their chief competitor Bunge Ltd (BG), which was down 50 percent from Wall Street expectations.

Even so, for now the company will enjoy a brief surge in stock price based on exceeding expectations of 69 cents a share, excluding items. Net income surged to $1.63 a share for the quarter ending September 30, or $1.05 billion. Last year in the same period net income was $441 millon, or 68 cents a share.

Revenue for the quarter grew by 65 percent to $21.16 billion, in spite of overall volume being about the same. Most of that was due to higher commodity costs which drove the prices up. That and hitting the currency exchange-rates at the right time drove the revenue increase.

Particularly strong in the quarter was the agricultural services and oilseed processing divisions. That was partly offset by the surging costs of energy and corn during the quarter.

Operational margins grew from 7.2 percent to 8.8 percent.

Much of ADM's success stems from their corn-processing facilities, whereby they're able to take the feedstock and put into whatever product has the best profits at any given time. That and their ability to manage the currency-exchange rates well has helped them immensely.

Still, the change in inventory valuation has helped them look much stronger than they really were during the quarter, and that needs to be strongly taken into consideration when looking at its seemingly overwhelming positive profits performance.

Looking ahead, commodity based companies will rebound as demand for resources rises again. Archer Midland Daniels will rise with them.

Commodities: US Dollar Strengthens

Dollar will collapse in spite of current strength

The U.S. dollar continues to strengthen because of the unique market circumstances, as it improved against euro, British pound, and the Australian and New zealand dollars today.

Against the Japanese yen though, it dropped to a 13-year low, as it's growing into the currency of choice for those seeking safety. At its lowest point against the yen today, the dollar fell to 90.89.

As Watching U.S. Dollar said today, "remarkable factors in the market keep the dollar high against other nations' currencies, as it was up to two-year highs against the euro, while it enjoyed a six-year high against sterling.

"Sterling fell to as low as $1.5270 against the U.S. dollar, while the euro was as low as $1.2498. The Australian and New Zealand dollars also plunged against the greenback, with the Australian dollar taking the biggest hit, falling by 7.6 percent to $0.6213, while the New Zealand dollar was right behind it, decreasing by 6.5 percent to $0.5576."

Looking ahead, the US dollar will eventually collapse as a perfect storm seems to be brewing against it in 2009.

U.S. Dollar: Up, Up and away... - will it last?

After about six years of faltering, the U.S. dollar has enjoyed a resurgence lately, as it's been on a significant upward run.

According to the New York dollar index, against the currencies of major trading partners the greenback has risen by 14 percent since the Bear Stearns fiasco.

More significant is the strength it has experienced against the euro, where it has climbed by 13 percent since hitting a $1.60 bottom a couple months ago.

Much of the upswing has come from investors moving their money to safer U.S. Treasury's, from stocks, bonds and real estate.

Some think there will be inevitable correction for the U.S. dollar soon, which could be precipitated by a jump in the price of oil or better news from emerging markets.

Even so, expectations are that Europe will probably cut rates some time in the next several months, and that should keep the U.S. dollar in a strong position in the near term.

From "Watching U.S. Dollar"

Commodity News Weekend Roundup

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COMMODITIES-Grains drop but oil ekes out gain on late bounce

Grains dropped Friday on profit taking ahead of the weekend, pulling corn further below the record hit this week, and gold also slid as cautious investors lightened their load on new signs of problems in the U.S. economy.

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Latest On Commodities: Tax Break

It’s the final weekend before Uncle Sam comes to collect his dues. AND, I have just one thing to say to everyone who finds him/herself knee-deep in old receipts, cross-eyed from punching calculator keys – Think Happy Thoughts.

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Commodities Wrap: Chicken Cuts

Chicken Producer Cuts Production Due to High Grain Costs, Prices Likely to Remain High

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Shorts, Commodities Lift These ETFs to Top

The top 10 ETFs for the quarter were dominated by funds that employed short strategies and funds invested in natural gas and copper.

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Canadian Currency's Link to Commodities Is Weakening, RBC Says

The Canadian dollar's link to commodities has been weakening as investors shift their focus to the global economic outlook amid the credit turmoil rooted in U.S. subprime mortgages, according to RBC Capital Markets.

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Forget gold, silver, bronze: the winner is aluminium

RIO TINTO's chief economist, Vivek Tulpule, says commodity prices could exceed the record prices they are fetching amid the rapid change of China and India.

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Market 360: A weekly wrap of US equity markets, commodities, currencies, and more

Commodities

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U.S. Dollar Continues Slide Against Major Currencies

The U.S. dollar continues its downward trend, as it again dropped to a record low against the euro, and its lowest performance against the yen in twelve years.

Another first for the greenback was it fell below one Swiss franc for the first time in its history.

The news of the bailout of Bear Stearns Co. (NYSE: BSC), along with the growing suspicion that the Fed could cut interest rates up to a full point at their next meeting, caused gold to also surge to historic highs, increasing to $1,009 an ounce.

"The initial reaction is to sell the U.S., sell the dollar, sell the equities," said Jeff Gladstein, global head of foreign-exchange trading at AIG Financial Products. "This is bad news. It's definitely a confirmation of the reality that U.S. financial institutions are having a hard time."

Against the yen, the dollar plunged to 98.90, the worst performance since September 1995, while against the euro it dropped to a record $1.5688. With the Swiss franc, it feel to as low as 0.9988, down from Thursday's 1.0093.

Commodities Continue to Surge: Oil Hits $110 for First Time

Commodity News Around the Web


Gas Prices Jump, Oil Hits $110

Gasoline and oil prices extended their record-setting streaks Wednesday, with gas at the pump reaching a new high of nearly $3.25 and crude surpassing $110 for the first time.

The gains came as a weakening dollar led investors to shrug off an Energy Department report that crude oil and gasoline supplies jumped last week.

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Dollar Falls to Record Low Against Euro

Euro Tops $1.55 for the First Time With Broad Skepticism About Fed Plan to Support Markets

The dollar fell against most major currencies on Wednesday, including a new low against the euro, which fetched $1.55, as skepticism grew over the latest U.S. Federal Reserve Bank plan to restore calm to jittery global credit markets.

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New S&P Currency Indexes Cover Renminbi And Rupee

Standard & Poor's has two currency indexes linked to two of the world's hottest emerging markets. The S&P Chinese Renminbi Index and the S&P Indian Rupee Index are the first members of a full family of similar indexes that S&P is launching; the S&P Currency Beta Series will include indexes both for individual currencies and groups of currencies. They were created for use as hedging and measurement tools.

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U.S. dollar sinks as Jordan says sell

The U.S. dollar has hit yet another record low against the Euro, after Jordanian central bank officials talked of reducing U.S. dollar reserves and figures showed Japan's economy is performing better than expected.

The Euro was buying US$1.5540 at 3:30 PM ET Friday, the strongest rate ever against the greenback since the Euro debuted in 1999. The U.S. dollar index, which measures the greenback's strength against a basket of major currencies, also slipped to a record low of 72.47. The Canadian dollar was slightly higher than yesterday's close at US$1.01.

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COMMODITIES-Rally plows ahead as oil crosses $110; wheat up


The powerful bull run in key commodities showed little fatigue on Wednesday as oil closed up after hitting a record above $110 per barrel and wheat settled higher after rallying for a second straight day.

Metals also ended in the positive, with copper [COP/X] rising more than 1 percent after losses in two earlier sessions, and gold [GOL/X] repeating Tuesday's modest gains.

Sugar [SUG/N] and cocoa [COC/N] closed down, along with corn and soybeans. But cotton [COT/N] showed surprising resilience, closing up after hitting limit-down.

Leading commodity indexes such as the Reuters-Jefferies CRB .CRB, the S&P GSCI .SPGSCI and the Dow Jones-AIG .DJAIG ended higher too.

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