Deeper Analysis
July in Figures
July 31, 2010
July was a month of lessening risk aversion in spite of mounting concern about U.S. and Japanese growth prospects and continuing unease over the fiscal austerity that is coming to Europe. The dollar fell across the board, and significant stock market losses in the second quarter were trimmed unevenly. Ten-year sovereign debt yield changes for […] More
Foreign Exchange Insights and Next Week
Next Week
July 30, 2010
Central bank interest rate meetings are scheduled in Australia, the euro area, the U.K., Peru, Romania Indonesia and the Czech Republic, but none is expected to announce a change of policy. Canada will be closed for Civic Day on Monday. The first week of the month is naturally PMI week. Monday will see a parade […] More
Foreign Exchange Insights and Next Week
Beware of August
July 30, 2010
The upcoming third anniversary of the financial crisis finds advanced economies deeper in debt, struggling to maintain traction, and without a consensus over policy priorities. Confusion also exists over the next direction of major currencies. The dollar lost value against most currencies during July in a pattern that persisted into the final days of the […] More
New Overnight Developments Abroad - Daily Update
Weaker Stocks and Euro Ahead of U.S. 2Q GDP Release
July 30, 2010
The dollar has climbed 0.6% against the euro but fallen 0.7% against the yen. The greenback is stronger by 0.5% against the kiwi, 0.3% versus the Aussie dollar, and 0.2% relative to sterling. Dollar/Swiss is unchanged, and the yuan ticked up 0.1% against the U.S. currency. The loonie is 0.2% higher. Stocks in the Pacific […] More
Deeper Analysis
Note on U.S. Growth
July 29, 2010
The Federal Reserve Beige Book gave a somber snapshot of the state of activity in June and early July. The pace of activity slowed in the Fed districts of Atlanta and Chicago, stalled in the Kansas City and Cleveland districts, and and was modestly positive but not picking up further in other areas. However competitive […] More
New Overnight Developments Abroad - Daily Update
Dollar Softer Across the Board
July 29, 2010
Overnight the dollar lost 1.2% against the Swiss franc, 1.1% against the Australian dollar, 0.7% against the Canadian dollar and euro, 0.5% against the yen, 0.3% relative to sterling and 0.2% against the kiwi. The dollar even dipped 0.03% against the yuan. The Japanese Nikkei lost 0.6%, and stocks dipped 0.2% in South Korea and […] More
Central Bank Watch
New Zealand Central Bank Rate Raised But Statement Signals Greater Caution
July 28, 2010
The Reserve Bank of New Zealand has implemented a second 25-basis point rate increase. The first was announced June 10, and today’s lifts the rate to 3.0%. The central bank’s statement was less hawkish than June’s communique. Growth had been called broad-based seven weeks ago, but in contrast considerable discussion this time is spend on “subdued […] More
Larry's Blog
How Low Will the Euro Go By End-2010?
July 28, 2010
The euro presently shows a 10% net year-to-date decline against the dollar. At its low of $1.1878 in early June, the euro had dropped by 17.0% since the end of 2009. I do not expect the euro to be weaker than that June level on December 31. Some analysts are more bearish on the euro […] More
New Overnight Developments Abroad - Daily Update
Weaker Aussie and New Zealand Dollars
July 28, 2010
The U.S. dollar advanced 1.0% and 0.7% against its Australian and New Zealand counterparts but was pretty steady otherwise. The Greenback dipped 0.3% against the loonie, 0.2% relative to the Swissy and yen, and 0.1% against the euro. The dollar rose 0.1% against sterling and is again unchanged versus the yuan. Stocks rose sharply overnight […] More
Bonds and Stocks
Footprint of Deflation in Major Advanced Economies
July 27, 2010
The fear of future inflation has ushered in an age of austerity even as prospects for sustained economic recovery among major advanced nations face substantial and unusual uncertainty. It is feared that government deficits, which ballooned in response to a drop in tax revenues caused by the deep recession, will be monetized away by central […] More
