Central Bank Watch

Investors Continue to Mark Time Ahead of Jackson Hole Symposium

August 24, 2016

Overnight the dollar rose 0.2% against the euro and 0.1% versus the Swiss franc but slipped 0.3% against the kiwi and 0.2% relative to sterling. There’s been no net change vis-a-vis the yen or Aussie dollar. Share prices rose 0.7% in Singapore, 0.3% in India and 0.6% in Japan but fell 0.7% in Hong Kong […] Read Article

Foreign Exchange Insights and Next Week

Next Week

August 18, 2016

Jackson Hole Symposium: This annual event sponsored by the Kansas City Fed runs from August 25 to 27. This year’s theme is “Designing Resilient Monetary Policy Frameworks for the Future.” Scheduled Interest Rate Policy Meetings: Turkey, Iceland and Hungary. U.S. Data Releases: Revised GDP, new and existing home sales, the FHFA house price index, durable […] Read Article

Central Bank Watch

Central Bank of Iceland

August 24, 2016

Icelandic monetary authorities implemented their first interest rate change, a reduction of 50 basis points, since a hike last November and their first rate cut since December 2014. Moreover, forward guidance on future rate changes switched from a bias toward increases to an ambivalent signal. After the Monetary Policy Committee’s prior meeting in early June, […] Read Article

Deeper Analysis

The Case in the FOMC Minutes for a Second Rate Hike Being Done Sooner

August 17, 2016

Minutes from the July 26-27 Federal Open Market Committee reveal a range of opinions regarding how soon to undertake a second hike of the federal funds target range. The diversity of views was greater than suggested by the single dissenting vote by Kansas City Fed President George in favor of a hike then. Certainly more […] Read Article

Central Bank Watch

Magyar Nemzeti Keeps Loose Stance but Doesn’t Augment Such

August 23, 2016

Hungary’s Base Rate has been 0.90% since three consecutive reductions of 15 basis points earlier this year in March, April and May. From August 2012 to July 2014 the rate had been slashed to 2.1% from 7.0%, and its was redued by a further 75 basis points between March and July of 2015. Today’s statement […] More

Central Bank Watch

Central Bank of the Republic of Turkey Cuts Marginal Funding Rate Again

August 23, 2016

The MFR had earlier been reduced by 25 basis points in March, 50 bps each in April, May and June, and 25 bps to 8.75% in July. Today’s cut was by 25 basis points to 8.5% versus 10.75% at the start of 2016. The most recent of these easings were implemented in spite of a […] More

New Overnight Developments Abroad - Daily Update

Stronger New Zealand Dollar

August 23, 2016

Several currencies strengthened against the U.S. dollar, led by the kiwi and not including the euro. The greenback lost 0.7% against the New Zealand dollar, 0.3% relative to the loonie, yen and sterling, and 0.1% versus the Aussie dollar and yuan, but it gained 0.3% against the euro and is unchanged against the Swiss franc. […] More

New Overnight Developments Abroad - Daily Update

Slow Day for News

August 22, 2016

Even by usual Monday standards, hardly any economic data have been released today, and the week’s main event is still four days away. That will be Janet Yellen’s speech on Friday at the K.C. Fed Jackson Hole Symposium. Despite recent hawkish comments from the likes of New York Fed President Dudley, markets are not currently […] More

Central Bank Watch

Bank Indonesia Leaves Key 7-Day Reverse Repo Unchanged at 5.25%

August 19, 2016

A new monetary policy framework has been launched, but the main interest rate has been left steady at 5.25%. The 7-Day reverse repo of 5.25% replaces the function of the BI reference rate that had been at 6.5% after four 25-bp cuts earlier this year. The reverse repo rate will be flanked symmetrically by a […] More

New Overnight Developments Abroad - Daily Update

Dollar Up But Stocks Lower

August 19, 2016

The dollar rose overnight by 0.9% against the Aussie dollar, 0.4% relative to the loonie, yuan and sterling, 0.3% versus the yen and Swiss franc and 0.2% against the kiwi and euro. In European stock market action, share prices have dropped 2.0% in Italy, 1.2% in Spain, 1.0% in Greece, 0.8% in Switzerland, 0.7% in […] More

New Overnight Developments Abroad - Daily Update

Pick-Up in Flow of Data Creates New Trading Incentives

August 18, 2016

Wednesday had seen a lull in statistical releases and a commensurate lackluster trading day. Thursday’s been a more interesting day from both vantage points. Released figures include Japanese trade and machine tool orders, Euroland consumer prices, current account and construction output, British retail sales, Australian labor statistics, and Chinese property prices. Investors also are reacting […] More

New Overnight Developments Abroad - Daily Update

Deja Vu

August 17, 2016

Wednesday’s been very quiet from a data release standpoint. Market trading has been dominated by Fed watching, which in the wake of remarks yesterday by Fed District Presidents Dudley of New York and Lockhart of Atlanta has markets pricing in much higher odds of a fed funds rate increase before yearend. They suggested a move […] More

Foreign Exchange Insights and Next Week

Dollar Ranges So Far in 2016

August 16, 2016

After the close of yesterday, five-eighths of 2016 had been completed. Up to that point, the dollar had ranged considerably more widely against the yen, sterling loonie, Aussie dollar and kiwi than against the euro and Swiss franc. The high-low spreads of the EUR/USD and USD/CHF pairs were only 8.4% and 8.6%, while the trading […] More

New Overnight Developments Abroad - Daily Update

Weaker Dollar and World Share Prices Ahead of Key U.S. Data Releases

August 16, 2016

The dollar fell overnight by 1.3% against the yen (now showing a 99 handle), 1.2% relative to the Swiss franc and kiwi, 1.0% versus the euro (which is near 1.13), 0.9% vis-a-vis sterling (hurt by a rise in British inflation), 0.8% against the Aussie and Canadian dollars, and 0.3% versus the yuan. Japan’s Nikkei closed […] More

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