New Overnight Developments Abroad - Daily Update

Several Central Banks Hold Scheduled Policy Meetings

January 19, 2017

Central banks in Euroland, Indonesia, Malaysia and Chile hold their first interest rate policy meetings of 2017. The ECB retained a zero percent refinancing rate, flanked by a 0.25% interest on its marginal lending facility and a negative 0.40% deposit rate. Bond buying of EUR 80 billion per month will continue this quarter, followed by […] Read Article

Foreign Exchange Insights and Next Week

The Dollar in Years When a New President Is Inaugurated

January 17, 2017

In February 1973, the second dollar devaluation in 14 months failed to stem heavy speculative downward pressure on the U.S. currency. Just a couple of weeks later, fixed exchange rates imposed by rigidly automatic central bank intervention were ended against the currencies of other advanced economies. A new system of floating exchange rates was born, […] Read Article

Central Bank Watch

European Central Bank

January 19, 2017

All things considered, the Governing Council of the ECB sent a dovish signal to the marketplace but announced no policy modifications after the first of eight scheduled reviews in 2017. Consider, for example, that on-year inflation in the most recent twelve months compared to the previous 12 months through December 2015 had risen by 1.5 […] Read Article

Deeper Analysis

Inflationary Amber Light

January 13, 2017

After the election of Donald Trump, the dollar, U.S. equities, long-term interest rates, and commodities rose initially. Some of these changes have been pared, but they reflect a changed perceived economic outlook. Analysts who follow fundamental economic trends became more optimistic about economic growth and the likelihood of higher inflation. Market players were very mindful that […] Read Article

Central Bank Watch

Bank Negara Malaysia

January 19, 2017

Following a percentage point of tightening in 2010-11 and a subsequent 25-basis point hike in July 2014, the Malaysian overnight money rate target had stood at 3.25% until a 25-basis point reduction last July. Inflation has eased following the lapse of Malaysia’s goods and services tax, prompting the incentive for the central bank rate cut, which […] More

Central Bank Watch

Bank Indonesia Reaffirms Monetary Stance

January 19, 2017

Cuts of 25 basis points in the Indonesian seven-day reverse repo rate were undertaken last year in January, February, May, June, September and October. The resulting 4.75% rate level during the past three months was extended at the first policy review of 2017. A released statement asserts that the monetary stance associated with this rate […] More

Central Bank Watch

Bank of Canada’s Interest Rate Target Kept at 0.50%

January 18, 2017

The Governing Council retained a 0.5% target interest rate. That’s been the level since reductions of 25 basis points in January 2015 and July 2015. Officials just completed a review quarterly that hardly changed macroeconomic projections last made in October and that concluded that the existing monetary stance is still appropriate. A statement explaining today’s […] More

New Overnight Developments Abroad - Daily Update

Better Session for the Dollar

January 18, 2017

Following sharp losses on Tuesday, the dollar prior to the release of U.S. CPI figures shows a recovery of 0.9% against sterling, 0.8% relative to the peso, 0.5% vis-a-vis the loonie and yen, and 0.2% versus the euro, Aussie dollar and kiwi. The yuan and Swiss franc remained steady. Share prices in the Pacific Rim increased […] More

New Overnight Developments Abroad - Daily Update

Strengthening Pound and Gold, Weakening Dollar and Stocks

January 17, 2017

British Prime Minister Theresa May delivered a speech on Brexit that Rejects any residual partial association with the European Union, Prioritizes total control over immigration above special rights to the single market, Informs that an all-out arrangement for the U.K. would leave it in position to negotiate trade separate trade deals with all countries. Hopes […] More

New Overnight Developments Abroad - Daily Update

Dollar Up, Stocks Down on MLK Holiday

January 16, 2017

The United States is observing Martin Luther King’s birthday. The stock exchange and banks will be closed. But President-Elect Trump continues to make lots of news. In a wide-ranging interview with the European press, Trump did not back away from well-rehearsed previous themes. NATO is outdated. The U.S. will not remain its prime financier. Radical […] More

Foreign Exchange Insights and Next Week

Next Week

January 13, 2017

Holidays and Special Events: On Monday, Martin Luther King’s Birthday in the United States. Tuesday-Friday World Economic Forum in Davos, Switzerland. Inaugural of Trump/Pence on Friday. Central Banks: Interest rate policy meetings in Canada, Euroland, Malaysia, Chile, Turkey and Indonesia. Yellen, Dudley and Harker of the Fed speak publicly. ECB President Draghi and Bank of […] More

Central Bank Watch

Bank of Korea Maintains a Loose Monetary Stance

January 13, 2017

At this year’s first interest rate policy meeting, officials at the Bank of Korea left the seven-day repo rate at a record low of 1.25%, its level since a 25-basis point cut last June. Similarly sized reductions were engineered in August and October of 2014 and March and June of 2015. A statement released today noted […] More

New Overnight Developments Abroad - Daily Update

Markets Calmer than Yesterday

January 13, 2017

After slumping Thursday, the dollar is unchanged today against the yen, Australian dollar, loonie and sterling. The greenback slipped a mere 0.2% against the euro, Swissie and peso since Thursday’s close and is down 0.1% vis-a-vis the yuan and kiwi. The Japanese Nikkei recovered 0.8%. Elsewhere in the Pacific Rim, equities have fallen 0.8% in […] More

Central Bank Watch

Central Reserve Bank of Peru

January 12, 2017

Although Peru’s key central bank rate was left at 4.25%, its level since the last February’s last of four cuts of 25 basis points each in the space of five months, a released statement revises projected inflation over the coming year up slightly and observes that “the water deficit generated by adverse climate factors has been […] More

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