Archive for January 2017

Deeper Analysis

January in Figures

January 31, 2017

The slumping dollar was the fulcrum of financial market activity in January. Dollar lows for the month were hit on January 31 against the euro, yen, Swiss franc, Australian dollar and kiwi, and the monthly highs occurred on either the third of second day of the months. From their lows to their highs, the Aussie […] More

Central Bank Watch

Bank of Japan Review

January 31, 2017

By another 7-2 vote with Kiuchi and Sato again dissenting, monetary policymakers voted not to change its interest rate targets, the size of quantitative easing, the medium-term inflation target, guidance governing future policy decisions, or its assessment of Japanese growth and inflation conditions and prospects. This result was expected. The statement on monetary policy¬†retains a […] More

New Overnight Developments Abroad - Daily Update

Monday Night Massacre, Lots of Released Data, and a BOJ Meeting

January 31, 2017

President Trump sacked Acting Attorney General Sally Yates late last night, who had refused to enforce his selective immigration ban, and replaced her with Dana Boente. The firing stirred recollections of Nixon firing of Eliot Richardson and Bill Ruckelshaus when they wouldn’t fire Watergate Special Prosecutor Archibald Cox in October 1973. In other U.S. political […] More

New Overnight Developments Abroad - Daily Update

U.S. Restraints on Immigration Rattle Markets

January 30, 2017

Numerous Asian markets from China to South Korea, Taiwan, Singapore, Malaysia, and Hong Kong were closed for the Lunar New Year (of the Rooster). There’s been an uproar over President Trumps executive orders concerning immigration banning visitors from many Islamic countries but conspicuously not Saudi Arabia. Stocks fell 0.5% overnight in Japan, 0.9% in Australia, […] More

Foreign Exchange Insights and Next Week

Next Week

January 27, 2017

Central Banks: The first of eight scheduled FOMC meetings is on Tuesday and Wednesday and will not be associated with a published Summary of Economic Projections or¬†a press conference by Chair Yellen. A policy meeting at the Bank of Japan on Monday-Tuesday will be associated with a released “Outlook” including revised macroeconomic forecast and a […] More

New Overnight Developments Abroad - Daily Update

A Week to Remember

January 27, 2017

It’s been a memorable first week of the Trump presidency. He will be meeting today with British Prime Minister Theresa May, who hopes to make giant strides in securing a bilateral trade accord between the two countries. Mexican President Nieto cancelled his trip to Washington amid mounting tensions over immigration, trade, and who pays for […] More

Foreign Exchange Insights and Next Week

Is a Revival of U.S. Currency Market Intervention Coming?

January 26, 2017

I suspect it is. Foreign exchange intervention used to be a key tool of monetary policy, wherein countries buy or sell their own currency in the marketplace against a different widely traded currency. As such, FX operations are like the open market operations used to guide banking reserves and domestic monetary policy, but there’s a […] More

Central Bank Watch

National Bank of Ukraine

January 26, 2017

The Ukrainian central bank interest rate was left unchanged at 14%. The same action was taken at the prior policy meeting in early December. A sharp decline of CPI inflation from 43.3% in 2015 to 12.4% last year had enabled officials to lower the interest rate from 30% in at the start of August 2015 […] More

New Overnight Developments Abroad - Daily Update

Dollar Bounces Higher

January 26, 2017

The dollar recovered 0.8% overnight against the yen and and is up 0.4% relative to the Canadian, Australian and New Zealand dollars. The greenback rose 0.2% versus the euro but slipped 0.2% against the Swissie. The yuan is unchanged, and the Mexican peso rebounded 0.3% as President Nieto said his country will not pay for […] More

New Overnight Developments Abroad - Daily Update

Dollar Retreats but European Stocks Rise Strongly

January 25, 2017

The dollar fell 0.6% against sterling, 0.5% relative to the yen, 0.4% vis-a-vis the loonie and kiwi and 0.3% against the euro, Swiss franc, yuan and Mexican peso. Yesterday’s tightening of Turkish monetary policy had a perverse effect on the lira, convincing investors that the currency is so vulnerable that more monetary restraint will be […] More

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