New Overnight Developments Abroad - Daily Update
Weaker-than-Expected PMIs and a Market-Moving Comment from John McDermott
April 23, 2015
The kiwi slumped 1.4% after Reserve Bank of New Zealand Assistant Governor McDermott said that policymakers are not currently contemplating a further rise in the official cash rate. Otherwise the U.S. currency fell overnight by 0.6% against the Swiss franc and 0.1% versus the euro but rose by 0.4% relative to the Australian dollar, 0.2% […] More
Foreign Exchange Insights and Next Week
Dollar Paused in Troubling Times
April 22, 2015
In spite of disappointing U.S. growth for a second straight quarter, dollar demand sizzled in January-March. Trading has been consolidating this month, and not merely pausing after such an upward spurt or even because of some convergence of macroeconomic trends between the United States and Europan. These are disturbing times. Each day, more bad news […] More
Central Bank Watch
An Indirect Central Bank Approach to Containing Turkish Lira Depreciation
April 22, 2015
2015 is not even 31% complete, yet the beleaguered lira has fallen 15% against the dollar. The danger is that currency weakness will lift inflation, which in March stood at 7.6%. The currency’s weakness was amplified by cuts in the one-week repo rate of 50 basis points in January and 25 bps in February on […] More
New Overnight Developments Abroad - Daily Update
Weaker Dollar Especially against the Ozzie and Sterling
April 22, 2015
The Australian dollar has risen 1.2% against its U.S. counterpart, buoyed by Aussie first-quarter CPI data that showed core inflation falling no further and remaining above 2.0% target floor. Sterling was lifted 0.7% against the dollar by Bank of England April 8-9 minutes that revealed not only a unanimous 9-0 vote for no change but […] More
Central Bank Watch
Another Hungarian Central Bank Base Rate Reduction
April 21, 2015
The Monetary Council at Magyar Nemzeti Bank sliced its base rate by 15 basis points to 1.95%. A similar-sized cut at the March monthly meeting had broken a policy pause over the eight prior months. For two years from August 2012 through July 2014, policy was loosened every month, taking the base rate from 7.0% […] More
New Overnight Developments Abroad - Daily Update
Greek Deficit Worries Depress Euro
April 21, 2015
The dollar rose overnight by 0.5% against the euro, 0.3% versus the Swiss franc, 0.2% vis-a-vis the yen and sterling, and 0.1% relative to the loonie but is unchanged against the yuan and Australian dollar and down 0.4% against the kiwi. Greek share prices have slumped 3.3%. The Chinese and Hong Kong stock markets closed […] More
Central Bank Watch
People’s Bank of China Slashes Banks’ Reserve Requirement to 18.5% from 19.5%
April 20, 2015
Sunday’s announcement was double the size of this year’s initial reduction of the reserve requirement ratio in February. February’s 50-bp cut — the more typical magnitude of changes — had been the first cut since and easing in May 2012 capped off a flurry of three cuts in the space of a half-year. The backdrop […] More
New Overnight Developments Abroad - Daily Update
Market Reaction to Chinese Monetary Easing
April 20, 2015
The People’s Bank of China slashed its reserve requirement to 18.5% from 19.5%. The full-percentage point reduction was twice as great as a previous 50-bp cut announced on February 4 and came in reaction to weaker GDP and other data announced last week. February’s cut had been the first since three 50-bp reductions engineered in […] More
Deeper Analysis
Communique from G20 Finance Ministers and Central Bankers Unlikely to Be a Market Mover
April 17, 2015
The released two-page statement after meetings over two days in Washington contains little to excite market players. Currency policy is boiled down to a single sentence: “We reaffirm our previous exchange rate commitments and will resist protectionism.” The negotiations between the Greek government and its creditors is not addressed explicitly. On the matter of global […] More
Foreign Exchange Insights and Next Week
Next Week
April 17, 2015
Central Bank Watch: Hungary and Turkey hold interest rate policy meetings. Minutes will be published from the policy meetings in Britain and Australia held earlier this month. RBA Governor Stevens and BOJ Deputy Governor Nakaso speak publicly. Special Meetings: The semi-annual IMF meetings in Washington run April 17-19. A meeting of eurozone finance ministers is […] More
