New Overnight Developments Abroad - Daily Update
Investor Sentiment Hit By IFO Figures and Various Comments
February 23, 2010
Harvard Professor Rogoff, former chief IMF economist, is predicting likely sovereign debt defaults in coming years, plus spending cuts and weak growth in the United States. Testimony by four Bank of England officials, including Governor King, were quite guarded. Additional quantitative easing may be needed. Economist Roger Bootle, a former British Treasury advisor, warned of […] More
Central Bank Watch
Bank of Israel Monetary Policy Left Unchanged
February 22, 2010
A decision to leave the Bank of Israel’s key policy rate at 1.25% matched the market consensus. A statement from officials mentioned lower-than-expected CPI inflation in both December and January as the main factor behind today’s decision and noted as well that measures of expected price inflation remain benign and anchored at an in-target pace […] More
Central Bank Watch
Hungary Gets a Rate Cut for the Eighth Month in a Row
February 22, 2010
Magyar Nemzeti Bank reduced its two-week bill rate by 25 basis points to a 20-year low of 5.75%, the same incremental cut as in December and January. The previous four months had seen the rate decline by 50 basis points apiece, and an initial easing last July was 100 basis points in size. A weak […] More
New Overnight Developments Abroad - Daily Update
Quiet Start to New Week
February 22, 2010
There have been few and inconsequential data releases this Monday. No market-shattering statements, either. China finally reopened following a week-long Lunar New Year holiday, and officials there renewed a pledge to maintain a moderately loose monetary policy and a pro-growth fiscal stance. Stocks rose in the Pacific Rim by 2.4% in Hong Kong, 2.7% in […] More
Central Bank Watch
Key Mexican Interest Rate Left at 4.5% as Anticipated
February 19, 2010
The Bank of Mexico’s key interbank interest rate has been 4.5% since last July 17th and will remain there at least another month in spite of a jump in CPI inflation last month to 4.5% and related to some tax increases. A statement released by bank officials saw no evidence yet of second-order inflationary effects […] More
Foreign Exchange Insights and Next Week
Next Week
February 19, 2010
Chairman Bernanke with a fresh four-year term will be back at Congress doing his semiannual rundown on monetary policy. It’s funny how the timing of Fed moves make so much more sense after the fact. The Fed did a good job of preparing the public for a possible discount rate hike in the not-distant future, […] More
Foreign Exchange Insights and Next Week
The Dollar Express
February 19, 2010
The dollar is coming off yet another solid week. While attention continued to be riveted on the high debt and deficits of Euroland’s peripheral countries like Greece, Spain, Portugal and Ireland, the dollar scored its largest advances of the week against the yen, a new development, and sterling, which is an old story. The yen […] More
New Overnight Developments Abroad - Daily Update
Dollar Strengthened in Wake of Late Wednesday’s Surprise Fed Discount Rate Hike
February 19, 2010
At 19:30 GMT yesterday after U.S. markets had closed, the Fed announced a 25-basis point increase in its discount rate to 0.75%. The FOMC minutes this week had served notice that such a move could occur soon and would not be meant as a signal of tightening monetary policy but rather another part of an […] More
New Overnight Developments Abroad - Daily Update
AN ADMINISTRATIVE ANNOUNCEMENT
February 18, 2010
Currency Thoughts has attracted a wide variety of regular readers as well as casual visitors. In order to provide more focused service, we are now requiring registration for New Overnight Developments Abroad. Many professionals involved in FX trading as well as economists in academia rely on this feature to begin their day. It is a […] More
Deeper Analysis
Energy and Inflation
February 18, 2010
Most of the recent volatility in inflation has been caused by energy. Canadian non-energy consumer prices, reported today, rose 1.3% both in the year to January 2010 and the 12 months to September 2009. Total inflation in that interval, however, swung from an on-year decline of 0.9% to an increase of 1.9% over the same […] More
