New Overnight Developments Abroad - Daily Update
Swissy Strengthens, Kiwi Weakens
June 28, 2010
The summit of G-20 leaders in Toronto over the weekend released a statement that had something for everybody. Omitted any reference to the yuan or, more generally, foreign exchange conditions and policy coordination. Identified a strengthening recovery as the key near-term priority. Warned of the downside risk from a synchronized fiscal adjustment across several major […] More
Foreign Exchange Insights and Next Week
Next Week
June 25, 2010
Wednesday will mark the end of a quarter and the mid-point of 2010. Canada celebrates Canada on Thursday, and dealing rooms will close early on Friday in the U.S. for the Independence Day weekend. A Swedish interest rate hike is expected on Thursday. Monetary policy meetings in Romania, Israel and Poland probably will not result […] More
Foreign Exchange Insights and Next Week
Risk Aversion, Not Growth Prospects, Again Driving Foreign Exchange
June 25, 2010
Economic growth prospects have discernibly darkened in advanced industrial economies, so financial markets are looking beyond what should be a respectable second quarter. An interest rate hike by the ECB, Bank of Japan, or even the Fed is nowhere in sight. The ECB and Bank of Japan have taken liquidity-supporting steps, which at the least […] More
Deeper Analysis
U.S. Economic Growth: Reflections
June 25, 2010
Revised U.S. GDP expanded 2.7% at an annualized rate (saar) last quarter and by a similar 2.4% between 1Q09 and 1Q10. Although not as good as preliminary indications, growth in the United States has not been bad for an advanced economy. GDP last quarter increased only 0.8% saar in Euroland and by 1.2% in Britain. […] More
New Overnight Developments Abroad - Daily Update
Euro, Kiwi, and Aussie Dollar Weaker as G-20 Leaders Assemble in Toronto
June 25, 2010
The dollar advanced 0.8% against the New Zealand dollar and 0.4% against the euro and Australian dollar. The greenback also rose 0.2% against sterling and 0.1% against the yen and Canadian dollar. The Swiss franc kept pace with the dollar and hit a record 1.3508 per euro high. Investors are downbeat on global growth prospects. […] More
Central Bank Watch
Taiwan’s Rate Hike
June 24, 2010
Taiwan became Asia’s sixth country to endure a rate increase. The 12.5 basis point increase in the discount rate to 1.375% reverses the final of seven reductions engineered between September 26, 2008 to February 18, 2009. Those easings had totaled 237.5 basis points and left the discount rate at a 55-year low. Quantitative easing had […] More
Central Bank Watch
Hong Kong Monetary Authority Again Mimes Fed
June 24, 2010
Hong Kong’s key interest rate has been left at 0.5%. Monetary authorities in the former British colony move in lock-step with what the FOMC does. For background on the policy of the HKMA, please read this April 29th article from Currency Thoughts. Copyright Larry Greenberg 2010. All rights reserved. No secondary distribution without express permission. More
New Overnight Developments Abroad - Daily Update
Risk Aversion Reigns as Investors Stay on Edge
June 24, 2010
Australian Prime Minister Rudd resigned. His popularity had melted after proposing a draconian tax on mining activity. Australian markets celebrated only briefly because the government remains in the Labour Party’s hands. Former Deputy PM Gillard becomes Australia’s first woman prime minister. The Fed’s statement yesterday acknowledged heightened external uncertainties. News from Iran provided another source […] More
Deeper Analysis
FOMC
June 23, 2010
One source of the dollar’s strength against the euro since late November has been a perception that the Fed will begin raising interest rates well ahead of the ECB. If this premise were prescient, it should only be meaningful from a market standpoint if the onset of Fed tightening were six to nine months away. […] More
Central Bank Watch
Further Norwegian Monetary Tightening Delayed
June 23, 2010
The policy interest rate of the Norges Bank was kept at 2.0%, and a released statement from the Executive Board of the central bank expressed the view that the rate “should be held at the current level for a period and then gradually raised towards a more normal level.” A range of 1.5-2.5% was projected […] More
