The US dollar, as measured against six other major world currencies, has hit its highest level since December 2005, while the euro declined to US$1.1760 – closer to the level of US$1.1747 at which it first traded upon its launch in 1999.
The continuing weakness of the euro was attributed to recent data showing deflation in the eurozone last month, expectations of further economic stimulus including quantitative easing (QE) by the European Central Bank (ECB) and growing belief that the Federal Reserve will begin raising US interest rates later this year.
Added to these factors was concern that a snap election to be held in Greece later this month could result in the country exiting the single European currency – an outcome dubbed ‘Grexit’.
Belief that the ECB could resort to QE was further reinforced by data on German industrial orders, which fell 2.4% in November 2014, more than expected.
According to a report by Bloomberg, Dutch bank ING Groep – which proved to be an accurate currency forecaster in 2014 – continues to expect the euro to continue falling and drop to parity with the dollar within two years, a level last seen in 2002. The median estimate of more than 30 forecasters in a Bloomberg survey is a more modest fall to US$1.15 by the end of 2016.
Bloomberg adds that ING expects measures by the ECB to boost the eurozone’s flagging economy and avoid deflation will have more severe consequences for the currency than most other firms.
The US money market fund reforms came into effect in 2016 and are already dramatically shaping US fund industry with investors flooding out of prime funds and into government securities. While the reforms are similar, they are not the same. GTNews interviews Yeng Bulter, global head of the cash business at State Street Global Advisors on the differences.
The top five sectors Asian fintech investors are interested in are data analytics, blockchain, lending, payments and regtech, according to Gary Hwa, EY regional managing partner.
On the third day of the Singapore Fintech Festival conference, there was a focus on specific applications of fintech innovation. One was trade finance, which is clearly is ripe for a revolution.
Kicking off day two of the Singapore Fintech Festival, Deloitte Chairman David Cruikshank said that fintech is significant for three reasons. First, customer expectations of services are higher than ever. Second, barriers to entry are lower than before. And finally, financial institutions (FIs) face a threat of what a competitor might do.