Headline for .     We are now well into the 5th year since the promise (by the European Central Bank president on July 26/2012) to do "whatever it takes to preserve the Euro". Since then, two more nations have joined the Euro zone.     WORLD CURRENCY OBSERVER thanks readers for comments. In any language, on any topic, send them to renaissance@briargreen.com.    
World Currency Observer
World Currency Observer

Exchange Rates: one year high and low

October 4, 2017 (see October 18 update below). Next update: November 1, 2017. Visit Search to look at past issues of World Currency Observer (brochure edition).

The Mexico peso fell by 2% against the US$ in September, and the Iceland króna fell by 1.5%, but both currencies are still stronger against the US$ than this time last year - the peso is up by 6%, and the króna up by nearly 7%. The Haiti gourde was up by 2% against the US$ in September, and is up by over 5% since this time last year. The Jamaica dollar fell by 1.5% on the month. The Argentina peso fell by 2% on the month against the US$, adding up to a 14% decline since this time last year. The Uruguay peso fell by 1% on the month. The Brazil peso fell by 1% on the month, but is still 2.5% stronger against the US$ than this time last year. The United Kingdom pound rose by 3.2% against the US$ in September, and by nearly 4% against the Euro. The Euro weakened a little against the US$ in September, but is up by 5% since this time last year. Many non-Euro currencies in East Europe -namely the Croatia kuna, Hungary forint, Poland zloty and Turkey lira - weakened by a range of 2 to 3% against the Euro in September. The Turkey lira is nearly 20% weaker against the US$ than at this time last year and is down by 24% against the Euro. The Russia rouble is now 8% stronger against the US$ than this time last year, after moving up 1.5% in September, which was after a similar gain in August. The Uzbekistan som is currently at just under 8100/1US$, and was at around 3000 one year ago, a decline which is, among former USSR currencies, unique in recent years. The Iran rial fell by 1.6% against the US$, and is down 6.8% against the US$ than this time last year. The Israel shekel is up by more than 6% against the US$ than this time last year. The Yemen rial is nearly 45% weaker against the US$ since this time last year. The South Africa rand fell by nearly 5% against the US$ in September, but is still up by nearly 5% since this time last year. The Algeria dinar was down by 2.7% against the US$ in September, and the Tunisia dinar was down by 1.5% (down by 12.5% since this time last year). The China yuan fell by 1.5% in September against the US$, after moving up by 2.7% against the US$ in August, leaving it about the same level as this time last year. The Taiwan dollar is 3% stronger against the US$ than this time last year. The Japan yen fell by 2.3% in September , leaving the yen 11% weaker against the US$ since this time last year. The India rupee fell by 2% in September, but is 2% stronger against the US$ than it was a year ago. Oil prices are up around 8% on the month. And, just to note that disappointed reactions by cocoa growers in the Cote d’Ivoire, to the setting by the government of a low price for cocoa to be paid to growers, reflects in part their acknowledgement of the weakness of the low world price of cocoa, but appears to be supplemented by a view that it is even lower than it would be otherwise because cocoa is one of several international commodities whose world benchmark price is set in UK pounds (BREXIT and all that) – WCO (brochure edition) will offer, in future postings, some observations on the interplay between commodity prices and exchange rates (including cocoa).

The number of Rohingya refugees who have fled from Myanmar (Burma) to Bangladesh has passed the 500 thousand mark (Bangladesh population is around 165 million, and Myanmar is around 55 million)…There are mixed assessments of the trade impact, so far, of measures to implement a customs union (unión aduanera) between Guatemala and Honduras, which began in June, and which covers around half of the economy of central America. (WCO remarks that not all customs unions live up to the textbook definition of a customs union, which is a combination of a free trade agreement plus common external tariffs).…A speech by United Kingdom BREXIT campaign leader Johnson (now foreign secretary) suggested that, with BREXIT, the UK “will take back control of roughly £350 million per week. It would be a fine thing, as many of us have pointed out, if a lot of that money went on the NHS, provided we use that cash injection to modernise and make the most of new technology.” A UK official strongly rebuked him, saying that this measurement ignores payments to the UK from the European Union (“surprised and disappointed... a clear misuse of official statistics”.)…OPEC oil production cuts are said to continue to be undermined by increased production by Libya and Nigeria, who were exempted from last year’s agreements…The president of Venezuela has announced that foreign contracts with Venezuelans must be in currencies other than the US dollar. Given the size of Venezuelan oil production, this has led to a suggestion that the world may see more China-yuan-denominated oil contracts.

Developments in the Middle East have led many to wonder what will happen to the 2 ½ year old ISIS currency. ISIS (which refers to itself as the modern Islamic State) announced its own currency three years ago, and then began, in June 2015, the issue of several coins based on the gold dinar, the silver dirham, and other coins made of copper. Use of these coins was made obligatory in ISIS occupied territory, although other currencies have remained in circulation. Part of the currency launch by ISIS was an increasingly enforced requirement that recipients of US dollars exchange them for ISIS currency; since ISIS has controlled some oil fields, some of these receipts have been considerable. The ISIS currencies are based, in part, on reviving the historic Islamic currencies which were issued by the Islamic caliphs (the combined government and political leadership) since the time of the prophet Mohammed in the 7th century. Because the Revelation (basically the Koran, supplemented with other holy texts) made references to specific payments and fines related to transgressions, it was necessary to put a specific value on these payments – hence the need for Islamic coins as expressions of value. ISIS, in launching its currencies three years ago, made statements about the need to institute Muslim finance to free the world from Western finance. One presentation, which WCO has seen, suggested that the introduction and use of paper money represented a debasement of the more pure money which existed at the time of the Prophet Mohammed (and for many centuries after), which was based on the Roman empire gold dinar, the Persian silver dirham, and the Persian copper fals, and that it is now necessary to get back to these, to free the world from the US dollar. A numismatic note: the historic dirham weight of gold contained in the coin was based on the weight of a specific number of grains of wheat, which is one reason that sheaves of wheat appear on some of the ISIS coins.

October 18, 2017 update

WCO, watching the evolution of the moves by some Catalonia residents for the region to become independent of Spain, note that currency implications would be less than usual because, as a member of the Eurozone, Spain has been using the Euro for many years and does not have its own currency. Catalonia officials are reported as saying that they plan to continue using the Euro, helping them to argue that separation would not make them smaller, but rather would free them to become more integrated with the larger EU community (although it is very clear they would have to overcome strong Spanish opposition in making such moves, reflecting the strong steps that Spain is taking now to ensure that Catalonia remains part of Spain). The proposal by Catalonia to continue using the Euro would, if it ever happened, put Catalonia as the most populous member (7.5 million people) of the list of countries and territories which use the Euro without being part of the Euro zone, which includes Montenegro and Kosovo in the Balkan region of Europe, and also includes smaller states, such as Vatican City and notably, Andorra. Andorra is located on the border between France and Spain and is right beside Catalonia, and part of the independence debates has been talk on whether Andorra would become part of an independent Catalonia.

(World Currency Observer will next be updated on November 1, 2017. Visit Search to look at past issues of World Currency Observer (brochure edition).)