Currency Manipulation?

South Africa’s increasingly weak currency is again in the spotlight as the Competition Commission starts a probe into alleged currency manipulation.

Now the commission is looking into whether JPMorgan Chase, Barclays Bank, Royal Bank of Scotland, Citigroup, Swiss-based UBS and Bank of America manipulated the rand and caused it to plummet.

These international institutions were fined a total of $5.6 billion for currency manipulation by UK and US regulators some time ago.

Manipulation does happen, he says, and currencies are manipulated to keep governments in check and protect the interests of countries such as the US, which dominates global trade as the bulk of international interactions are done in dollars.

Another way of shorting is to sell to the lowest bidder, and keep selling so the item – currency, futures or stock – is pushed lower, which allows traders to buy back in at the lower price and, hopefully, make a profit.

Mohammed Nalla, head of strategic research at Nedbank Capital, argues, however, that there is no market manipulation, and that it is not possible to short sell a liquid currency.




 source: January 2016Nicola Mawson

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