March 5, 2015
The New Zealand dollar sank 1.0% against the dollar and fell to a one-month low against the Australian dollar on the possibility that the Reserve Bank of New Zealand might resort to property market-specific regulatory changes instead of and delaying a near-term interest rate hike. German industrial orders slumped 3.9% in January, reversing nearly all […] Read Article
March 4, 2015
Snow shoveling duty will limit the length of the dollar essay this week to a couple of developments worth watching. The first is explained in an earlier posting today on Currency Thoughts that documents a very sharp narrowing of the U.S. and eurozone purchasing managers indices between November 2014 and last month. This convergence in both […] Read Article
March 5, 2015
At meetings when the nine-person Monetary Policy Committee chooses not to modify policy, as was the case this month and most of the time, officials almost never disclose extra information beyond when policy was changed, the size of that change, and the release time for minutes of the meeting just completed. Today’s statement instructs those […] Read Article
March 4, 2015
A poll of forecasters conducted each month by The Economist found expectations as recently as February of U.S. GDP growth in 2015 (3.3%) to be almost three times higher than the view toward the euro area (1.2%). The average forecasts three months earlier were respectively 2.9% and 1.2%. However, in the table below, which shows […] Read Article
March 5, 2015
The official policy rate of Bank Negara Malaysia has been at 3.25% since a 25-basis point hike last July, which was its first change since four such increases in the 14 months between March 2010 and May 2011. Real GDP expanded nearly 6% between 4Q13 and 4Q14, CPI inflation is hovering currently around 1%. A […] More
March 5, 2015
After the second of eight scheduled meetings of the ECB Governing Council, held off-sight in Nicosia, a statement was release informing us that The ECB refinancing rate, marginal lending facility rate, and deposit rate were left unchanged at 0.05%, 0.30%, and -0.20%. New staffing GDP and CPI forecasts had been crunched and for the first […] More
March 4, 2015
The monetary policy committee, known as Copom, raised the Selic interest rate by another 50 basis points, matching increases made on January 20 and December 3rd. There also was a 25-basis point hike last October and 375 basis points of tightening between April 2013 and April 2014. The new Selic rate level of 12.75% will […] More
March 4, 2015
The target had been cut at the prior Governing Council Meeting on January 21, which coincided with a quarterly review of economic conditions and prospects. The cut in January was the first rate change since a hike in September 2010 was was characterized as providing “insurance against risk of too low inflation and growth from […] More
March 4, 2015
Reductions of 50 basis points in the National Bank of Poland’s reference rate to 1.5%, Lombard rate to 2.5%, and deposit rate to 0.5% were announced in a central bank statement today. Officials make a case for deepening deflation in Poland: “Moderate wage growth, the fall in global commodity prices and no demand pressure all […] More
March 4, 2015
The plunging hryvnia has lifted Ukraine inflation into double digits. In response, officials at the National Bank of Ukraine had raised their discount rate a month ago from 14.0% to 19.5%, but that didn’t stem geopolitically-generated capital flight. So even more draconian measures were unveiled in a statement released today. The discount rate has been […] More
March 4, 2015
RBI Governor Rajan released a statement announcing a new monetary policy framework oriented around a single target of 4% CPI inflation give or take two percentage points. The statement also informed markets about a 25-basis point cut of the RBI repo rate to 7.5%. A similar cut on January 15 (also not coinciding with a […] More
March 4, 2015
The Reserve Bank of India sliced its repo, reverse repo and standing facility rates by 25 basis points to 7.5%, 6.5%, and 8.5%. Like the prior change on January 15, this easing of monetary policy was taken between scheduled policy reviews, creating a big element of surprise. The latest action was taken in conjunction with […] More
March 3, 2015
Analysts were pretty evenly split prior to the March Board meeting between no change in Australia’s official cash rate and a 25-basis point reduction to 2.0%. It would have been the second straight easing, but officials opted to leave its stance instead unchanged. At today’s meeting the Board judged that, having eased monetary policy at […] More
March 3, 2015
The U.S. dollar fell overnight by 0.5% against the Aussie dollar, 0.4% versus the kiwi, 0.3% relative to the yen and 0.1% vis-a-vis the loonie. The dollar is unchanged against sterling and the yuan but has risen 0.3% against the Swiss franc and 0.1% relative to the euro. Share prices lost 2.6% in China, 0.7% […] More
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