Small Exchange: China’s forex reserves surge higher, the Euro reacts to French election and unlicensed Kuwaiti exchange bureaus
This week's currency news rounded up.
China's forex reserves beat expectations
For the third consecutive month, China's State Administration of Foreign Exchange reported that reserves were up, rising $21 billion in April to total more than $3 trillion.
The regulator said that figures exceeded market expectations, bolstered by balanced forex supply and demand, as well as the appreciation of currencies against the dollar.
To give some perspective, in March, reserves rose just $3.96 billion to total $3.009 trillion.
Chinese banks’ net forex sales shrank 67% year-on-year during first quarter 2017, down to $40.9 billion.
Early last month, the US Treasury Department officially declined to continue labelling China as a currency manipulator. This decision has gone a long way to ease bilateral tensions with Beijing.
The Euro reacts to the French election
In stark contrast to movements following the Brexit announcement and last year's US presidential election, Emmanuel Macron's recent victory has done little to unsettle European and global forex markets.
The Financial Times reported that the euro fell by just 0.1% to $1.0992 on Monday, given the bulk of the impact had already been priced in. The Swiss franc lost 0.1% to $0.9899, as did the pound to $1.2968.
The Australian dollar weakened in Asia too, down 0.1% to $0.7415. However, the Mexican peso won against the dollar in Asia trading, up 0.2% to 18.9401 per dollar.
Unlicensed Kuwaiti exchange bureaus are flourishing
The Arab Times reports there has been a substantial jump in the number of unregulated and illicit foreign exchange bureaus popping up in Kuwait.
Sources reveal there are almost 40 convenience stores (bakalas) in Kuwait city mediating illegal foreign exchange money transfers. The low rates offered are difficult to pass up, while special charges are reserved for individual transactions exceeding KD 4,000.
The Central Bank of Kuwait has been ineffectively attempting to thwart these unauthorised agencies.
Each week Small Exchange sums up currency news from around the globe and looks into how it impacts exchange rates and options.