July 27 2023 |, By, Mesirow Currency Management, Weak Currency and Strong Inflation Bedevil Turkey, Unconventional economic policies are making it hard for Turkey to avoid a monetary mess  An economy beset by high inflation lack of foreign exchange reserves and ever-changing financial leadership have led to a weak currency that’s likely to become weaker Monetary and fiscal policies result in ailing lira Irregular monetary and fiscal management is reflected in a feeble lira that continues to…, Explore, Get it wholesale, Foreign exchange trades settle two days after trading Could they settle in 30 seconds Read article, Central Bank Digital Currencies, What do CBDCs mean for the US dollar as the world’s major reserve currency Read article

Demystifying codes and exchange rates, Currencies can be confusing but they aren’t difficult to understand when you know the basics To help clear up the confusion Mesirow will post articles throughout 2025 that cover key topics about currency basics This series will include explanations on how currencies are quoted (topic of this article how countries manage their national currencies and the essentials of currency hedging  Currencies…, base currency, the, quote currency, and the, exchange rate, These are identified using standardized three-letter codes established by the International Organization for Standardization (ISO For example, USD, United States Dollar, EUR, Euro, JPY, Japanese Yen These codes combine the two-letter ISO country code with the first letter of the currency name For instance US + D(ollar =, USD, However there are exceptions such as the Russian ruble In 1998 Russia redenominated its currency replacing 1000 old rubles (RUR with one new ruble (RUB The ISO code was updated accordingly The exchange rate shows how much of the quote currency is equivalent to one unit of the base currency (Figure 1 For example if the US dollar – Russian ruble exchange rate is 981022 it means 1 USD can be…, Translation One US dollar can be exchanged for  981022 Russian rubles, What do changes in exchange rates mean If an exchange rate increases the base currency is said to be strengthening If it decreases the base currency is weakening Because currency pairs reflect the relationship between two currencies when one currency strengthens the other weakens For example If the Russian ruble exchange rate rises (eg from 92 to 98 the base currency – USD  – strengthens relative…, USDRUB Exchange rate, Day 1 89 Day 2 87 Day 3 87 Day 4 (yesterday 92 Day 5 (today 98 Figure 2 RUBLES PER US DOLLAR , The dollar rose from yesterdays rate of 92 to 98 and The ruble fell to 98 from yesterdays rate of 92 are equivalent statements , Why it matters Understanding currency quotes is the first step in navigating the confusing world of foreign exchange By learning how exchange rates are presented and what they signify you’ll gain a clearer view of the economic trends and market forces shaping currency values  Check back for more insights as we explore the world of currencies and their role in the global economy  , Explore more currency insights, Four strategies to reduce liquidity management stress, Different approaches can help investors manage the liquidity challenges associated with their currency program  Read article, Safe haven currency hedging, Why do US and Swiss pension funds use different currency risk strategies Read article

June 20 2024 | By, Mesirow Currency Management,  , National debt worries, It’s easy to be complacent about the US debt level Since 1990 debt crises have erupted periodically (1995–6 2011 2013 2021 2023 with intense media coverage and dire predictions of economic consequences Sometimes the crises partially shut down the government and once led to a credit downgrade (2011 But each time the crisis was resolved and forgotten  THE NATIONAL DEBT CLOCK – MARCH 1989 Source…, Where is the debt level now, The US debt level measured as a percentage of GDP to make it comparable across time periods is historically high and headed to unimaginable levels  According to the CBO the debt held by the public at the end of 2023 was 973% of gross domestic product The CBO estimates that debt will increase to 116% of GDP by 2034 and to 1717% of GDP by 2054 Those values dwarf debt held during and directly after…, Country, S&P, Moodys, Fitch, Japan, A+ A1 A, US, AA+ Aaa (negative outlook AA+  , Category, S&P, Moodys, Fitch, Prime, AAA, Aaa, AAA  , AA+, Aa1, AA+, High grade AA Aa2 AA   AA- Aa3 AA-  , A+, A1, A+ Upper medium grade A A2, A,   A- A3 A- Source Trading Economics Fitch wolfstreetcom Few signs of strain The United States hasn’t experienced much pain for its large and growing debt Moody’s rates the US’s long-term debt as prime (but with a negative outlook its highest rating S&P and Fitch ratings are one level lower (Table 1  Inflation levels are moderating the CBO doesn’t expect personal consumption expenditures…, What can be done to reduce US debt, Reducing spending or increasing income are easy remedies to identify The International Monetary Fund estimates that the US needs to lower spending or increase taxes by about 4% of GDP by 2029 to stabilize debt That could involve painful adjustment for some government fund recipients  Improved economics could be another solution Those improvements could include increased productivity say from…, Explore more currency insights, Cryptocurrencies and Tokenization, Distributed ledger technology fosters digitization of just about everything Read article, Can a US rapid payment system take off, The benefits of rapid payments (financial inclusion connectivity shelter from economic sanctions have many nations interested in establishing a rapid payments system  Read article

August 25 2023 |, By, Mesirow Currency Management, Russia says BRICS nations plan a common currency , The US dollar is the dominant currency in global finance and commerce Some nations chafe at the dollar’s role in world trade and financial affairs and look for opportunities to diminish that currency’s importance The August 22 - 24 summit in South Africa for leaders of the BRICS nations – Brazil Russia India China and South Africa – had been the hoped-for setting for the announcement of a BRICS…, Statements and counterstatements, The Russian embassy in Kenya leaked word of the common currency in a July 2 tweet followed by similar statements a few days later from Russia Today a state-supported television network  In a July 5 interview Leslie Maasdorp Vice President and Chief Financial Officer of BRICS-supported New Development Bank downplayed the creation of a US dollar competitor Mr Maasdorp said that the US dollar is…, Russian frustration, Russia’s desire to dislodge the US dollar is not surprising In response to the Ukraine invasion a US-led coalition levied a series of sanctions on Russia The coalition capped the price of Russian crude oil blocked Russian banks from using SWIFT (the US-managed global payment system and froze Russian currency reserves Russia has had some success countering the sanctions but currency issues are…, Brazil’s common currency experiences, Brazil has considerable experience – all dismal – in launching a common currency In 1987 Brazil and Argentina tried to launch the gaucho but that effort was dropped among economic turbulence the following year In 2019 Brazil and Argentina proposed another currency collaboration the peso real The Brazilian central bank opposed it despite the Brazilian president’s insistence that the currency…, Forgotten lessons about gold standards, The history of gold-backed currencies might give the BRICS countries reasons to reconsider using that precious metal to back their currency  Gold advocates point to the period from the end of the US Civil War in 1865 to the beginning of World War I in 1914 as justification for a gold standard The world experienced a relatively calm political environment strong economic growth and absence of major…, It’s hard to overthrow the king but it’s not impossible, Deposing the US dollar from its global role is a daunting task Commodities are priced in USD debt is often issued in USD and many goods and services are invoiced in USD The United States offers ample investment opportunities for those holding excess dollars and has well-defined and established laws for governing finance and trade Those benefits might be ignored if the US continues to impose…, Explore, T+1 securities settlement cycle, Does a shorter security settlement cycle mean more foreign exchange risk Read article, Get it wholesale, Foreign exchange trades settle two days after trading Could they settle in 30 seconds Read article  

Dominant reserve currencies—those currencies that banks hold as reserves for use in international trade and finance—come and go These currencies rise into prominence spend about 90 to 100 years in the spotlight and decline into obscurity 1 The US dollar is the current dominant reserve currency It rose in the first half of the 1900s and has maintained its position as the world’s most important…, WORLD RESERVE CURRENCIES SINCE 1450* timeline graphic from 1450 to present *modern day flag of country shown The history of the dollar from World War I onwards is a story of a dynasty power benefits and political and economic turmoil  US dollar ascent  The US dollar’s ascent began during World War I when the United States became a crucial exporter for war materials and food trade that was settled…, Explore, Nothing lasts forever Is the US dollar an exception, Crises and competition challenges USD hegemony as the dominant foreign exchange reserve Read article, The central bank digital currency threat, Nations are rushing to launch CBDCs Will the US be a leader or a laggard in the digital currency race Read article   1 https//wwwmidasgoldgroupcom/news/world-reserve-currencies-since-1450  | 2 Eichengreen Barry Exorbitant Privilege The Rise and Fall of the Dollar and the Future of the International Monetary System Oxford University Press 2011 page 60 | 3 Eichengreen page 61 | 4  https//…

The currency market is the largest and most liquid in the world with approximately $66 trillion traded a day up from $51 trillion in 2016* In a market that large and fast moving inefficiencies inevitably arise that astute investors can use to help manage risk pursue more predictable returns or both Learn more in our new report “ Currency for Institutional Investors ” For more information on how…, Mesirow named Currency Manager of the Year for the third consecutive year by MoneyAge, *“Bank of International Settlements Triennial Report 2019” https//wwwbisorg/statistics/rpfx19_fxhtm The information contained herein is intended for institutional clients Qualified Eligible Persons Eligible Contract Participants or the equivalent classification in the recipient’s jurisdiction and is for informational purposes only Nothing contained herein constitutes an offer to sell an interest…

Uto Shinohara is a Managing Director and senior investment strategist in Mesirow’s Currency Management group His responsibilities include leveraging in-depth research to drive strategic decisions across the product suite as well as interaction with the group’s global and diverse client base  Uto has more than 25 years of investment management expertise with significant experience in quantitative…

Vincent Vicidomini is a Managing Director in Mesirow Fiduciary Solutions In his role he is responsible for developing new relationships with recordkeepers third-party administrators broker-dealers advisors and defined contribution investment only firms He regularly consults with leadership teams regarding fiduciary program development ways to mitigate risk through outsourcing and establishing…