…but money talks (to paraphrase Neil Diamond)
And china has lots of it. Beijing has
established a new global infrastructure development bank to rival the World
Bank, and its efforts to have it accepted in the West have apparently not been
to the satisfaction of the US. America has been calling on China to devote
funding for global development for some time, but it expected this to happen
under the auspices of the World Bank, which Washington dominates, to the extent
that it is prepared to use it to further its foreign policy.
The new bank is to be called the
Asian Infrastructure Investment Bank (AIIB). While China will be the lead
member, it has pledged that it will not exercise any power of veto over its
decisions. It did this in order to attract other founder members. On foot of
the undertaking the UK, Germany, France and Italy have all declared their
intention of giving support. Australia could be only days away from also
agreeing to become a founder member. And yesterday, the head of the IMF,
Christine Lagarde, while on a visit to China, made comments welcoming the
creation of the new institution. She said that her organisation would be
delighted to cooperate with the new bank.
High
volatility around US CPI release
The Euro was moving up nicely against
the US dollar yesterday in a continuation of its tendency since the FOMC
monetary policy statement in the middle of last week. Then, inflation figures
in the US, which were released yesterday at 12:30 GMT, came in somewhat higher
than previously. This was enough to sow confusion in the Forex market, because
higher inflation would be one of the more important factors influencing the Fed
to raise core interest rates.
The market vacillated for a full 30
minutes before deciding to go with the Greenback, and against the trend for the
day up to that point.
These are the conditions that provide
challenge to Foreign Exchange traders. Happily, the OmiCronFX Mandelbrot algorithmic routine is up to it.
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