Archive for January 2013

Central Bank Watch

India Gets Easier Monetary Policy Stance

January 29, 2013

Officials at the Reserve Bank of India Cut the central bank’s repo and reverse repo rates by 25 basis points each to 7.75% and 6.75%.  This was the second round of cuts.  The first was made last April and amounted to 50 basis points.  Previously, the repo rate had been raised by 200 basis points […] More

New Overnight Developments Abroad - Daily Update

Japanese Government on Defensive over Yen Policy

January 29, 2013

Foreign governments continue to depict the actions and remarks of the new Japanese government as a breach of the rule against competitive devaluation.  The yen recovered 0.4% against the dollar overnight.  The U.S. currency also lost 0.3% against the Australian dollar and sterling and 0.2% versus the Swiss franc and kiwi.  The dollar has risen […] More

Central Bank Watch

Bank of the Republic of Colombia — Rate Cut Review

January 28, 2013

Colombia’s central bank intervention interest rate was cut for a third straight time and the fifth time in seven months.  The rate is now at 4.0%, down from 5.25% from February 2012 through July 2012.  The rate had previously been raised from 3.0% prior to February 2011.  The current easing trend has happened against the […] More

Central Bank Watch

Bank of Israel: No Policy Change after January Meeting

January 28, 2013

Monetary policymakers did not change policy this month but released a statement that was ambivalent about the next change either as to direction or timing.  Analysts were somewhat surprised when the Monetary Policy Committee cut their benchmark interest rate by 25 basis points to 1.75% in December.  That was the fourth such reduction of 2012 […] More

New Overnight Developments Abroad - Daily Update

Abe Government’s Yen Policy Criticized

January 28, 2013

Japan has drawn a wide range of foreign criticism from South Korea to the ECB for encouraging a weak yen.  Fresh lows of 91.27 per dollar and 122.94 per euro were touched overnight, but on balance Japan’s currency has edged up 0.1% against the U.S. currency from Friday’s closing level.  A risk exists that next […] More

Foreign Exchange Insights and Next Week

Next Week

January 25, 2013

Interest rate policy meetings are scheduled next week in the United States, India, Israel, Hungary, New Zealand and Malaysia.  The FOMC decision on Wednesday will be followed by a Bernanke press conference. The WEF Conference in Davos winds up this weekend.  Then, Aussie markets will be closed Monday to observe Australia Day. The featured U.S. […] More

Deeper Analysis

Inflation in Japan and Canada: Too Little of a Bad Thing

January 25, 2013

Conservatives around the world have been warning since 2009 that heavy doses of monetary accommodation and fiscal deficit spending will lead to an unacceptably large increase of inflation.  The major surprise on the price front in country after country has been lower-than-anticipated inflation.  Analysts and politicians have been hard-wired to believe that inflation is intrinsically […] More

Central Bank Watch

First Danish Rate Increase in 18 Months

January 25, 2013

The Danish National Bank’s key lending rate and certificate of deposit rates were increased by 10 basis points each effective today to 0.30% and -0.10%, respectively.  The previous change in any Danish central bank interest rates was implemented on July 6, 2012, and the last hike in any rates was done July 8, 2011.  Today’s […] More

New Overnight Developments Abroad - Daily Update

New Lows for Yen & Sterling and Highs for Euro

January 25, 2013

Currencies hit new 2013 extremes overnight.  The yen fell as low as 91.03 per dollar and 122.315 per euro.  The euro touched a high of $1.3465, while sterling slipped as low as $1.5746. On balance since the Thursday close, the dollar rose 0.6% against the yen, 0.2% versus the loonie, and 0.1% relative to the […] More

Foreign Exchange Insights and Next Week

Not the Euro

January 24, 2013

Britain’s relationship to Continental Europe has always been a restless one.  Britain approached the Common Market late, not joining until 1973, and the island nation is now contemplating the possibility of leaving the European Union unless its rights and responsibilities as a member can be renegotiated.  Britain has twice abandoned participation in joint European currency […] More

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