Foreign Exchange Insights and Next Week
Next Week
May 18, 2012
The summit of G8 leaders in Maryland winds up on Saturday, May 19. An EU summit is scheduled for Wednesday, the same day that the OECD Economic Outlook will be published and that minutes from the Bank of England early-May meeting are being released. Some of the central bankers with public appearances include ECB President [...] More
Big Storm Coming and No Place to Hide
May 18, 2012
The euro’s increasing vulnerability is the main topic of currency market chatter. It has taken 2.5 years for the euro to depreciate about 23 U.S. cents or some 15%. Over this span, a familiar sequence of crisis intensification, slow policy response, and eventual announcement of measures to preserve the euro has kicked the problem down [...] More
Next Week
May 11, 2012
An interest rate meeting is scheduled next week in Iceland, and the FOMC releases minutes from its last meeting. EU finance ministers meet Monday and Tuesday, and the G7 leaders hold their annual summer summit at Camp David on Friday and Saturday. Important state elections in Germany’s most populous region, North Rhine Westphalia, are set [...] More
Dangerous to do Business
May 11, 2012
Risk aversion is back in vogue. One saw this in equities more quickly than in foreign exchange. Investors can think of many reasons to be averse. The May 6th elections in Europe improved the probability of Greece leaving the common currency bloc in 2012. Four years and 10 months after the onset of the global [...] More
Next Week
May 4, 2012
A busy week lies ahead, kicked off on Sunday with the French presidential runoff election, Greek parliamentary elections, a German state election in Schleswig Holstein, and local elections in Italy. British markets will be closed for a bank holiday on Monday, and U.K. policy priorities will be reviewed in the Queen’s Speech on Wednesday. The [...] More
EUR/USD and Dollar/Yen Just Drifting Around
May 4, 2012
Real economic growth is one of the first factors generally mentioned when analysts list influential determinants of currency market movement. The United States is enjoying one of the largest growth advantages vis-a-vis Europe in a very long time, but you wouldn’t know that from the recent steadiness of the euro. The common currency is quoted [...] More
Next Week
April 28, 2012
The coming week features the release of April purchasing manager survey results for manufacturing, services and, in the case of Britain and Germany, also construction. There are scheduled interest rate policy meetings at the European Central Bank, Reserve Bank of Australia, Bank of Thailand, Bank Negara Malaysia, Czech National Bank, and National Bank of Romania. [...] More
Will Currency Logjam Break Up in May?
April 27, 2012
The dollar fell modestly against the euro and Swiss franc during the last full calendar week of April, a bit over 0.5% against the British and Australian currencies, and slightly more than 1.0% relative to the Canadian dollar and Japanese yen. Since the start of the year, the dollar has eased by 5.0% or less [...] More
Next Week
April 20, 2012
Next week’s calendar is crowded with central bank meetings at the Fed (including a Bernanke press conference), Bank of Japan (and the release of new macroeconomic forecasts), Megyar Nemzeti Bank, Bank of Mexico, and Bank of Israel. The first estimates of GDP growth arrive for Britain and the United States. Preliminary purchasing manager survey results [...] More
What an Absence of High Inflation Means for Currencies
April 20, 2012
Economists and investors see different primary economic threats. In the marketplace, a high level of fiscal deficit phobia continues. The fear is that fiscal excess accommodated by low central bank interest rates will produce accelerating inflation. Elevated commodity prices may constitute the foothills of that trend, and the pessimists also note that many emerging economies [...] More
