Archive for November, 2007

The US Dollar

Friday, November 16th, 2007

The US dollar has been losing value against major currencies for some time now, which is raising concern among other nations about the stability of the currency. On Thursday the dollar rose slightly against the Euro but fell against the Yen. Continuing credit market worries and weak stock markets are to blame. The United Arab Emirates is under intense pressure to unpeg it’s currency from the US dollar, due to increasing inflation and possible social unrest associated with it. There was some positive news coming out of the US, with regional U.S. business activity being higher.

The U.S. dollar rose against the euro but slid against the yen on Thursday, as ongoing credit market concerns and weak stock markets led investors to pare back on short positions in the greenback.
Uncertainty about losses from the U.S. subprime mortgage crisis continued to pervade markets. Standard & Poor’s cut its long-term credit rating on Bear Stearns Cos, while the investment bank is expected to report its first-ever quarterly loss. In addition, General Electric Co said on Wednesday its short-term bond fund had run into trouble and all its outside investors have liquidated their holdings.
Persistent concerns about the lending environment have caused some currency traders to trim bets against the dollar and reduce yen carry trades, in which the low-yielding Japanese currency is borrowed to fund purchases of higher-yielding ones.

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China and India Energy Demand

Wednesday, November 7th, 2007

The expanding economies of Asian giants China and India will put further pressure on energy resources on Earth. A new report by the International Energy Agency forecasts that China will overtake the US as biggest emitter of greenhouse gasses this year, and that India will be the third biggest CO2 emitter by 2015. Forecasts in the report were based on a conservative 6% yearly GDP growth rate for both economies. China’s economy has been growing at average rates of 10% for the last few years. To fulfil demand both countries need to invest trillions of dollars in energy infrastructure and supplies by 2030.

The International Energy Agency focused on the impact of soaring demand from Asian giants China and India in its 2007 World Energy Outlook.

Here are some key predictions by the energy watchdog.

The figures and dates are based on current energy consumption trends. Future action by governments to reduce demand would affect the forecasts.

They are also based on an assumption of economic growth in both countries of 6.0 pct per year on average for the 2005-2030 period, a rate described as ‘conservative’ by the IEA. Higher growth would increase energy demand.

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