Foreign Exchange Insights and Next Week
Can the U.S. Win a Currency War?
June 20, 2019
President Trump wants a weaker dollar to depress imports, strengthen U.S. exports and import-competing domestic goods, and wean America off its reliance on globalized supply lines. He believes the dollar is fundamentally overvalued, and there is some merit to that claim. The most recent semi-annual update of the Economist’s BIG MAC index done last January […] More
Central Bank Watch
Bank of Norway Tightens
June 20, 2019
The last of today’s bonanza of central bank policy announcement was the exception to the dovish predisposition of other monetary authorities. The Bank of Norway as expected raised its policy interest rate by 25 basis points to 1.25%. This was the third tightening move following 25-bp increases last September and March but leaves the rate […] More
Central Bank Watch
Bank of England Bracing for Possible No-Deal Brexit
June 20, 2019
The Bank of England left the British Bank Rate at 0.75%, its level since a 25-basis point hike last August. The baseline forecast, which was formally reviewed at the prior meeting, anticipates further rate normalization, but assumed a smooth Brexit process that looks increasingly unlikely. Today’s statement identifies increased downside growth risks, projects flat GDP […] More
Central Bank Watch
Japanese Monetary Policy Not Changed
June 20, 2019
Following its scheduled monetary policy review, the Bank of Japan left its stance unchanged but observed weak industrial production, export demand, housing, and expected inflation. Amid escalating global uncertainties and ahead of a planned domestic sales tax hike, BOJ officials flagged a rising possibility of more easing in the future, but the credibility of that […] More
New Overnight Developments Abroad - Daily Update
Dollar Down on a Perfect Storm of Tensions Fraught with Uncertainty
June 20, 2019
The dollar lost 0.6-0.9% overnight against the euro, Swiss franc, loonie, yuan, kiwi, Australian dollar and Mexican peso. The greenback also has fallen 0.4% relative to the yen and 0.3% vis-a-vis sterling. The list of unknowns keeps lengthening. Iran shot down a U.S. surveillance drone, seemingly bringing another Middle East war closer. From Fed Chairman […] More
