Central Bank Watch
Hungary’s First Base Rate Cut in Four Years
June 23, 2020
The base rate of the Central Bank of Hungary, which had been at 0.90% since a 15-basis point reduction exactly four years ago, was reduced by another 15 basis points to 0.75%. CPI inflation this year is expected to hover between 3.0% and 3.5% and to average even less in 2021. The overnight deposit rate […] More
New Overnight Developments Abroad - Daily Update
Preliminary Purchasing Manager Readings for June Beating Expectations
June 23, 2020
PMI readings for Euroland, Germany, France, and Great Britain show a V-shaped pattern. Other themes of today include A further disturbing rise in the Covid-19 numbers. Global cases rose about 145,000 in the past 24 hours, 31k of which were reported in the United States. U.S. President Trump’s opinion poll approval ratings continue to erode. […] More
Foreign Exchange Insights and Next Week
America in 2020 Through the Lens of 18th Century Founding Documents
June 22, 2020
Almost three weeks have passed since my last dollar essay in this space. The prior focus on the Covid-19 pandemic and its potential effects on the global and U.S. economies has been overshadowed by an introspective examination into the disturbing state of American race relations and how the dream enshrined in the U.S. Constitution preamble […] More
New Overnight Developments Abroad - Daily Update
Softer Dollar, Share Prices, and Sovereign Debt Yields
June 22, 2020
The upswing of global and U.S. Covid-19 infections accelerated over the weekend. Global cases moved above 9 million people, and U.S. deaths from the disease climbed above 122 thousand. The Trump rally in Oklahoma attracted fewer people than anticipated, in part reflecting fear of catching the virus. Street protests in American cities continued. The dollar […] More
Foreign Exchange Insights and Next Week
Next Week’s Menu: June 20 -26, 2020
June 19, 2020
Central Banks: Monetary policies to be reviewed in Hungary, the Czech Republic, New Zealand, China, the Philippines, Turkey, Mexico and Thailand. Minutes from last Central Bank of Brazil policy meeting and a summary of the latest Bank of Japan meeting will be published, and the Fed on Thursday reveals the results of the annual bank […] More
Central Bank Watch
Bank of Russia Interest Rate Reduced Full Percentage Point
June 19, 2020
The Central Bank of Russia lowered its one-week repo rate by a full percentage point to a record low of 4.5%, bringing the net drop this year to 175 basis points. The rate earlier was cut 25 bps in February and by 50 bps in April. More monetary relief is moreover still in play according […] More
New Overnight Developments Abroad - Daily Update
Good Trade News but Unsettling Covid Developments
June 19, 2020
Share prices got a boost from an overnight report that China will step up purchases of U.S. agricultural goods. This comes after Thursday’s revelation in the Bolton tell-all book that Trump had solicited a boost in Chinese purchases to voter reelection support from the mid-west. Several populous U.S. states like California, Florida, and Texas continue […] More
Central Bank Watch
Indonesian Interest Rate Cut
June 18, 2020
Indonesia’s policy interest rate has been reduced 25 basis points to 4.25%. This was the third such drop in 2020 following 25-basis point cuts in February and May. Officials at Bank Indonesia likely was sliced 25 basis points from their overnight deposit and lending rates to create a new corridor that runs from 3.5% to […] More
Central Bank Watch
Central Bank of Brazil Authorizes 75-Basis Point Rate Cut
June 18, 2020
As was expected, Brazil’s monetary policy committee known as Copom cut its Selic interest rate by another 75 basis points to 2.25% and matching the reduction made in May. A pair of 25-basis point reductions were done earlier in February and March. In a released statement from the Central Bank of Brazil, however, officials noted […] More
Central Bank Watch
Swiss National Bank Keeps -0.75% Interest Rate Target
June 18, 2020
The scheduled quarterly monetary policy review at the Swiss National Bank ended with officials leaving their policy rate unchanged at negative 0.75% and doubling down on the need for forceful currency market intervention to counter safe-haven demand and limit the franc’s appreciation. GDP is projected to drop 6% this year in a released statement, and […] More
