Foreign Exchange Insights and Next Week

Next Week

January 26, 2018

Central Banks: Monetary policy meetings are scheduled in the United States (the last one with Yellen as chair), Czech Republic, Chile, Colombia and Hungary. A summary of the Bank of Japan board meeting last week will be published. Iwata of the BOJ and Mersch of the European Central Bank speak publicly. Special Events: President Trump […] More

Dollar Reflecting an Erosion of Respect

January 24, 2018

Viewed from a very wide angle lens, currency valuations reflect the present value of a country’s perceived future. The perceived economic potential of a nation plays a big role in this evaluation. Investors want a store of value that is associated with a steady and desirable rate of inflation. A currency that holds its internal […] More

Next Week

January 19, 2018

World Economic Forum: Annual conference in Davos, Switzerland, bringing together leaders of business, politics and academia. This year’s theme is “Creating a Shared Future in a Fractured World.” The WEF begins Tuesday and runs through the end of the week. Central Banks: Both the Bank of Japan and European Central Banks will be holding policy […] More

Seasonality of the Dollar in Early January and Some Reflections on Rising Long-Term Treasury Yields

January 15, 2018

The dollar depreciated by 2.2% against the euro in the first half of January. That loss brings to three the streak of declines at the start of a calendar year. In the first January halves of 2016 and 2017, the dollar had on balance lost 0.5% and 0.6% relative to the common European currency. The […] More

Next Week

January 12, 2018

Central Banks: Monetary policy meetings are scheduled in Canada, South Africa, South Korea and Indonesia. The Fed Beige Book of regional economic conditions and the Bank of Canada’s quarterly Monetary Policy Report will be published. Jordan of the Swiss National Bank, Coerce of the European Central Bank and Evans and Mester of the Fed speak […] More

Next Week

January 5, 2018

Central Banks: Policy meetings are scheduled in Israel, Poland, South Korea, Peru, Serbia, and Romania. Many Fed officials have scheduled public speaking engagements: Kashkari, Dudley, Evans, Bullard, Rosengren, Bostic, Potter, Mester, and Williams. ECB minutes and the Bank of Canada’s Business Outlook Survey will be published. Japanese Closure on Monday: Coming of Age Day. Scheduled […] More

Dollar Reflections on a Snowy Day Early in January

January 4, 2018

Economic fundamentals improved last year in the United States and many other countries. Real activity grew faster. Inflation pivoted away from being troublesomely low to levels that still remained weaker than desired but ones that permitted monetary policy normalization to proceed gradually. Current account surpluses were experienced in the usual suspects such as Germany, Switzerland, […] More

Next Week

December 22, 2017

Holidays: Most markets — Japan being a notable exception — will be closed Monday for Christmas. The Emperor’s Birthday holiday in Japan on December 23rd falls on a Saturday and so will not be associated with a closed business day there this year. In several countries markets will remain closed on Tuesday for either Christmas […] More

Next Week

December 15, 2017

Central Banks: Monetary policy meetings are scheduled in Japan, Sweden, Thailand, the Czech Republic, and Hungary. Minutes from this month’s meeting of the Reserve Bank of Australia will be published (note that January is the one month each year when the RBA doesn’t have a scheduled policy review). Bank of Japan Governor Kuroda and Bank […] More

Updating a Note Posted in December 2015 on Yearend Seasonality of EUR/USD

December 13, 2017

In the early years after the United States adopted flexible dollar exchange rates in March 1973, the U.S. currency an astonishingly consistent pattern of depreciation against the mark during the second half of each December, dropping in thirteen out of fourteen years in one stretch. Like the euro now, theĀ  mark was then Europe’s predominant […] More