China’s Forex Continues Rigidity

According to US Treasury Secretary John Snow during a press briefing at the close of a meeting of finance ministers and central bankers from the Group of Seven leading industrial nations in London, China’s July reforms to its currency regime was not sufficient amidst the welcomed the end of the yuan being pegged to the US dollar in a favor of other currencies.

"China’s new exchange-rate system has operated with too much rigidity. This rigidity constrains exchange-rate flexibility in the region and thus poses risk to China’s economy and the global economy," Snow said.

Snow also challenged the International Monetary Fund (IMF) to implement its most fundamental responsibility to step up its oversight of members’ exchange-rate policies since the organization’s advice has been too sparing or muted in such issues.

Acting on the US Treasury’s foreign exchange system’s report to the US Congress, Snow’s challenge was in addition to his call last week to IMF’s Managing Director to prepare a report on currency policies for presentation to the IMF board next year.

(Sournce: G7: Tsy’s Snow: IMF Forex Advice Often Too Muted, TheBusinessOnline.Com)

Gold Boosts Japan Trading

For the first time since late 1987, Asian trading for gold prices broke through the critical threshold of $500 an ounce last November 29, 2005. The boost in gold prices was driven by investor demand for the metal as a diversifying asset prompting the rise in prices in Japan, says Business Week Online.

"A rise in the value of the dollar against the euro reversed the rally early trading on the New York Mercantile Exchange. The December gold contract was at $497, down $1.30 from the previous day," the Business Week website said, adding that "Gold’s appeal as a hedge against currency weakness, inflation and financial instabilities in general has driven the recent rise in prices."

According to the website, gold’s heightened status is apparently being encouraged by Japan’s strong technical trends and possibly concerns on further yen weakness along with Russia’s continuous demand for it in a bid to diversify its foreign reserves.

(Source: Gold Breaks Through $500 An Ounce In Asia, BusinessWeek.Com)

Unaffected By Political Rifts

As of November 30, the Canadian Dollar stays unperturbed by political rifts says Dow Jones Newswire Column’s in the Yahoo Website.

"The long-anticipated fall of the Liberal government in Ottawa late Monday and what’s shaping up as an extraordinarily vituperative Christmas election campaign isn’t likely to derail the Canadian currency march toward new highs, which is being powered by superior economic fundamentals, inflows of foreign investment capital, and mounting Bank of Canada rate hike expectations," it said.

Despite the Canadian government’s forced dissolution due to a vote of non-confidence in the Prime Minister’s government, the Canadian dollar remains undisturbed along with the trading for it since it is continuously supported by the election outcome such as pledges from both the Liberals and the Conservatives to maintain balanced budgets and relative fiscal conservatism.
Canada will hold their election on January 23, 2006 ending the Prime Minister’s government’s inception last June 2004.

(Source: Canada Dollars Stays Unperturbed By Politics, Yahoo Website)