Foreign Exchange Insights and Next Week

Next Week

February 16, 2018

Holidays: Lunar New Year Closures Monday in China, Hong Kong and Singapore. China remains shut on Tuesday and Wednesday. U.S. and Canada are also closed on Monday for Washington’s Birthday and Family Day, respectively. Central Banks: Following a slew of central bank policy reviews during the past two weeks, the coming week has very few […] More

Dollar and Relative Inflation

February 15, 2018

One theory of long-term exchange rate determination known as Purchasing Power Parity stipulates that currency movements have a tendency eventually to offset variations in relative inflation rates, such that the amount of currency A needed to purchase a bundle of trade-exposed goods in country A when converted into currency B will be just enough to […] More

Next Week

February 9, 2018

Holiday Closures: Japan Founders Day on Monday. Brazil observes Mardi Gras on Monday and Tuesday. Several Asian countries will be closed Thursday and/or Friday for the Lunar New Year that ushers in the year of the dog. These include China, South Korea, Hong Kong, Indonesia and Singapore. Central Banks: Policy reviews at the Swedish Riksbank, […] More

Next Week

February 2, 2018

Central Banks: A considerable list of monetary policy meetings scheduled next week features the Bank of England, Reserve Bank of Australia, Reserve Bank of India, and Bank of Russia and also includes central banks in Iceland, Thailand, New Zealand, Romania, Serbia, Poland, Mexico and Peru. RBA Governor Lowe and BOE Governor Carney hold subsequent press […] More

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