Foreign Exchange Insights and Next Week
Reserve Currency Temptations
June 7, 2011
The country whose currency anchors the international monetary system has unique advantages in raising capital. Because It can borrow overseas in its own money, the real burden of foreign-held debt doesn’t increase if its currency depreciates. This benefit of reserve asset hegemony tends to depress interest rates and promote economic growth, and it encourages monetary […] More
Central Bank Watch
No Urgency to Tighten Australian Monetary Policy
June 7, 2011
The Reserve Bank of Australia implemented three 25-basis point rate hikes in 2009 and four more in 2010, but the current “mildly restrictive” stance has not been changed in the last seven months and continues to be deemed “appropriate” according to a statement released today after the Policy Board held its monthly meeting. The tone […] More
New Overnight Developments Abroad - Daily Update
Dollar Struggles Continue
June 7, 2011
The dollar fell 1.0% against the New Zealand dollar, 0.7% versus the euro, 0.6% against the Canadian dollar, 0.5% relative to sterling and 0.3% versus the Swiss franc. The greenback is unchanged against the Australian dollar and 0.1% firmer relative to the yen. A senior Chinese official, Guan Ho, warned that the dollar is likely […] More
