Archive for August 2015

Foreign Exchange Insights and Next Week

Next Week

August 21, 2015

Central Banking Beat:  The annual K.C. Fed-Jackson Hole Symposium for central bankers begins on Thursday, August 27 and runs through Saturday August 29.  A speech on the final day of the conference by Vice-Chair Stanley Fisher is awaited for clues about whether the first fed funds hike will come as soon as September.  Fed district […] More

New Overnight Developments Abroad - Daily Update

A One-Two Punch from China and Greece

August 21, 2015

The dollar’s retreat was extended overnight, hitting a low of 1.1312 per euro.  Against Thursday closing levels, the U.S. currency lost 0.6% against the kiwi and yen, 0.5% versus the euro, and 0.4% vis-a-vis the Swiss franc.  The dollar, in contrast, is unchanged relative to the yuan and Australian dollar and shows gains of 0.4% […] More

New Overnight Developments Abroad - Daily Update

Another Risk Off Market

August 20, 2015

Stocks are off in North America, Europe and Asia.  The Shanghai Composite slumped 3.4%, and markets in India, Korea, Hong Kong, Australia and Singapore all fell at least 1.0%, while the Japanese Nikkei lost 0.9%.  The German Dax is 2.2%, and the S&P shows a loss of 1.2% so far. Ten-year sovereign debt yields are […] More

Central Bank Watch

Central Bank of Iceland

August 19, 2015

An increase of the seven-day Icelandic collateralized lending rate on June 10 reversed the direction of monetary policy, and the Monetary Policy Committee today followed that action with a second 50-basis point hike to 6.25%, thus surpassing by 25 basis points the level that had prevailed from end-2012 until a cut in November 2014.  Officials […] More

New Overnight Developments Abroad - Daily Update

Benign Data and Market Action

August 19, 2015

The dollar did not change on balance overnight against the euro or sterling.  Other changes were mute, too, including a 0.1% uptick versus the yen. Share prices are mostly softer.  Ten-year sovereign debt yields are unchanged in the U.S., Germany, Japan and Britain. WTI oil slipped 0.8% to $42.30 per barrel.  Comex gold firmed 0.4% […] More

New Overnight Developments Abroad - Daily Update

Yuan Down Again But at a More Gradual Pace

August 13, 2015

The Chinese renminbi dipped only 0.3% today. The dollar is unchanged against the Swiss franc and Aussie dollar, up 0.6% against the loonie, 0.5% relative to the euro, 0.9% versus the kiwi and 0.2% vis-a-vis the yen and sterling. In Pacific Rim stock market action, the Shanghai Composite Chinese index recovered 1.8%.  Equities rose 2.3% […] More

New Overnight Developments Abroad - Daily Update

Yuan Decline Triggers Fresh Drop in Global Equities and Sovereign Debt Yields

August 12, 2015

The yuan fell by a further 0.9% against the dollar to 6.38, and in Hong Kong offshore trading the quote sank to 6.552.  Chinese central bank officials played down the development as a temporary adjustment to the new pricing system that will be more heavily influenced by market forces.  They asserted that economic fundamentals do […] More

Deeper Analysis

People’s Bank of China Explains Today’s Historic Actions

August 11, 2015

China’s central bank took giant steps today in the evolution of its monetary policy whose end-point is to give market forces greater determining impact in the country’s financial markets.  Several files of information can be found on the web site, the most useful being in a question and answer format.  One explains the context and […] More

New Overnight Developments Abroad - Daily Update

China Drops Bombshell on Financial Markets

August 11, 2015

The Chinese renminbi was devalued 1.9%, and central bank officials there announced that the currency henceforth would be allowed to reflect market forces to a much greater extent.  Intervention previously had been employed to prop of China’s currency amid weakening exports and lessening overall economic growth.  This change comes just over a year after the […] More

Foreign Exchange Insights and Next Week

A Stale Currency Market Landscape

August 10, 2015

In these dog days of August, currency movements cannot be trusted to represent the current state of relative economic fundamentals between countries, nor even expectations of future economic and financial market trends.  Superimposed upon this seasonal time of limbo, summer 2015 finds investors stuck with a set of uncertainties that has grown stale.  Foremost among […] More

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