Indonesia and China’s Foreign Exchange Reserves Rose in February 2017

For Indonesia, February was the 3rd consecutive month of growth in terms of foreign exchange reserves. Agus Martowardojo, governor of Indonesia’s central bank, announced that foreign exchange reserves reached $119.9 billion in February, up from $116.9 billion in January. As explained in a previous article (TOP 3 EMERGING ECONOMIES TO WATCH IN 2017), Indonesia is an important commodities exporter. This rise in FX reserves is likely due to earnings from oil and gas exports, as well as capital inflow. Rising Forex reserves also have an impact on the Indonesian Rupiah, boosting its performance against major currencies, especially the U.S. Dollar.

For the First Time, Bitcoin is Worth More than Gold

We’ve all heard of Bitcoin, the cryptocurrency built on blockchain technology, which burst onto the trading scene back in 2009. You’ll never, of course, be able to get your hands on physical Bitcoin notes, but that’s the essence of its appeal. Since Bitcoin is totally decentralised, it isn’t controlled by any bank, national government or supranational authority, instead operating as a peer-to-peer electronic cash system designed to cut out all intermediaries.

The FED Should Continue the Normalization of Its Monetary Policy

After two days of testimony before Congress and the U.S. House of Representatives Financial Services Committee, Fed Chair Janet Yellen seems to have convinced investors there will be further rate hikes this year.

USD at Lowest Level since November

Since December and the last rate hike, the Dollar Index has continued going down in the face of increasing domestic and international risks. Yesterday, the FOMC decided to keep interest rates unchanged, the Fed Funds rate staying in a range of 0.5% to 0.75%. This unanimous decision was expected from investors, who anticipated a 38% chance of a rate hike in March before the FOMC meeting. After the minutes were released, the odds of a rate hike in May increased to 52%, and to 75% for June.

USD Facing 5th Consecutive down Week

The US Dollar is down for the 5^th consecutive week in the face of increasing uncertainties over President Donald Trump’s administration. Some analysts believe that the new president’s decisions could change the dynamic of the world’s most powerful economies. Yesterday, President Trump signed the end of the TPP agreement, a trans-pacific free trade treaty, “for the good of American workers”. There are many economic and geopolitical risks surrounding the US Administration’s policies, which some think could pose a threat to the financial markets.