Archive for September 2013

New Overnight Developments Abroad - Daily Update

Mixed Results from Second-Tier Data

September 25, 2013

A generally quiet day so far.  The dollar has gained against commodity-sensitive currencies, rising 0.7% against the kiwi, 0.4% versus the Australian dollar and 0.2% relative to the loonie.  The U.S. currency is unchanged against the Chinese yuan but down 0.2% versus the euro, Swissie, yen and sterling. Share prices advanced 1.2% in New Zealand […] More

Central Bank Watch

Hungary’s Magyar Nemzeti Bank Cuts Interest rate for 14th Straight Time

September 24, 2013

A statement from Hungarian monetary officials announced a 20-basis point cut of the two-week deposit rate to a record low of 3.60%.  A similar reduction had been made in August, and there was a streak of twelve monthly cuts of 25 basis points each starting in August 2012.  Core inflation in Hungary is historically low, […] More

New Overnight Developments Abroad - Daily Update

Toxic Remarks from the Dallas Federal Reserve President

September 24, 2013

The Federal Reserve has become even more embroiled in a politicizing maelstrom.  Dallas Fed President Richard Fisher has aired its dirty laundry in public, with highly critical remarks about 1) President Obama’s poorly handled hunt for a successor to Chairman Bernanke and 2) the Fed’s decision not to taper.  He argued that Fed credibility has […] More

Central Bank Watch

Bank of Israel Cuts Policy Interest Rate Unexpectedly

September 23, 2013

There has been a ninth interest rate cut of 25 basis points in the current streak of ease dating back to September 2011.  Compared to a peak then of 3.25%, Israel’s central bank interest rate now falls to 1.0%, and all but 50 basis points of the normalization engineered from August 2009 to May 2011 […] More

New Overnight Developments Abroad - Daily Update

German Election Results and Preliminary September Chinese and Euroland PMI Readings

September 23, 2013

Japan was closed in observance of the autumnal equinox. The right-of-center Christian Democrats and Christian Social Union did much better than forecast.  Those sister parties picked up 72 seats in German national parliamentary elections to fall just marginally under securing an absolute majority.  Angela Merkel is assured of a third four-year term as German Chancellor.  […] More

Foreign Exchange Insights and Next Week

Next Week

September 20, 2013

In the coming week, Germans elect the national parliament from whom Angela Merkel of the center-right Christian Democrats is likely to secure a third four-year term as Chancellor but governing in a Grand right-left coalition as she did in her first term.  For the past four years, the pro-market Free Democrats were the junior ruling […] More

Central Bank Watch

Reserve Bank of India Opens a New Box of Tools

September 20, 2013

2013 has been a difficult year for the Indian rupee, which despite some appreciation in September is down over 13% against the dollar since end-2012.  The exchange rate has been hit by elevated inflation, disappointing growth, a chronic current account deficit equal to about 4.5% of GDP, and rising global long-term interest rates.  A number […] More

New Overnight Developments Abroad - Daily Update

Looking Ahead to German Election, Fed Chairperson Nomination, and U.S. Fiscal Showdown

September 20, 2013

It’s been a comparatively quiet end to an exhausting week.  On the immediate horizon is Sunday’s German parliamentary election, with polls showing a likely Grand Right-Left coalition led by Angela Merkel.  President Obama is expected to nominate Janet Yellen, the current Fed Vice-Chairperson, to follow Bernanke.  It’s believed that a potential crisis over raising the […] More

Foreign Exchange Insights and Next Week

Dollar Absorbing Twin Body Blows

September 19, 2013

It’s been a difficult Thursday-to-Thursday statement week for the dollar, which got sandbagged by yesterday’s Fed surprise not to begin reducing quantitative easing.  In the period, the U.S. currency suffered losses of 2.8% against the kiwi, 2.2% relative to the Swiss franc, 1.8% versus the Australian dollar, 1.7% against the euro and 1.5% at sterling’s […] More

Central Bank Watch

South African Reserve Bank

September 19, 2013

South Africa’s monetary policy committee left its repo rate at 5.0% but flagged a possible future need to tighten if inflation stays above target or rand depreciation resumes.  A statement released today by the SARB concludes Currently, a sustained breach of the inflation target is not our central forecast, but the upside risks to the […] More

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