New Overnight Developments Abroad - Daily Update
Declines in Kiwi, Ruble and Turkish Lira
August 9, 2018
The dollar advanced overnight by 1.6% against the New Zealand dollar, 0.9% versus the Russian ruble, and some 2.5% vis-a-vis the Turkish lira. Not only did the latest review of New Zealand monetary policy end with leaving the Official Cash Rate at 1.75%, half its level prior to the June 2015 first of 7 reductions, […] More
New Overnight Developments Abroad - Daily Update
Sterling Continues to Stumble on Hard Brexit Fears
August 8, 2018
Sterling hit new 2018 lows of EUR 0.9019 and $1.2859. The dollar is 0.6% stronger against the pound than its Tuesday closing level. The dollar is also up 0.3% versus the loonie, down 0.3% relative to the yen, and barely changed against the euro, Swiss franc, Aussie dollar or kiwi. Asian stocks were mixed Wednesday, […] More
New Overnight Developments Abroad - Daily Update
Softer Dollar but Higher Share Prices
August 7, 2018
The dollar softened overnight by 0.6% against the Aussie dollar, 0.4% relative to the yuan and euro, 0.3% vis-a-vis the peso, loonie and kiwi, 0.2% versus the yen and Swiss franc, and 0.1% against sterling. Share prices climbed 2.7% in China, 2.0% in Hong Kong, 0.7% in Japan, and 0.6% in South Korea. Equities in […] More
Foreign Exchange Insights and Next Week
Spotlight on Sterling
August 6, 2018
As a former hegemonic reserve currency with enormous residual offshore holdings, sterling is intrinsically susceptible to being shoved around disproportionately whenever favorable or unfavorable fundamental economic shifts arise. From $2.80 prior to the November 1967 devaluation, the pound slid to a low of $1.55 less than a decade later in October 1976 and touched an […] More
New Overnight Developments Abroad - Daily Update
Sterling Slide Extended
August 6, 2018
The pound ended last week on a weak note after Bank of England Governor Carney flagged “an uncomfortably high” risk that Britain leaves the EU without any negotiated deal. That message was reinforced over the weekend by Trade Minister Fox’s perception of 60-40 odds in favor of no deal, and sterling slipped a bit below […] More
Foreign Exchange Insights and Next Week
Next Week
August 3, 2018
Central Banks: Central banks hold monetary policy reviews in Australia, New Zealand, Thailand, The Philippines, Peru, Romania and Serbia. Australia’s quarterly Monetary Policy Statement and minutes from the Bank of Japan Board meeting to be published. Barkin of the Fed speaks publicly, as will Reserve Bank of Australia Governor Lowe. Holidays: August Civic holiday in […] More
Deeper Analysis
Narrower U.S. Non-Manufacturing Advantage Last Month Versus Euro Area
August 3, 2018
The July spread between the ISM non-manufacturing U.S. purchasing managers index and IHS’s service-sector PMI for the euro area was 2.4 points smaller than June’s differential. In combination with a 2.3-point contraction of their manufacturing PMI spread reported earlier this week, the sum of the two first differences was slightly more than halved to 4.5 points, […] More
New Overnight Developments Abroad - Daily Update
Service Sector PMI Surveys and U.S. Jobs Data
August 3, 2018
The U.S. Labor Department’s July jobs and wage data will be released shortly. Investors are already digesting PMI data reported overnight. Euroland’s composite purchasing managers survey (comprising both manufacturing and service sector activities) dropped back to a 2-month low of 54.3 in July from a 4-month high in June of 54.9. The services PMI had […] More
Central Bank Watch
Bank of Mexico Decides Not to Raise Interest Rate after Latest Policy Review
August 2, 2018
The Governing Board kept its overnight interbank interest rate at 7.75% but observed in a released statement that “since the last monetary policy decision, the balance of risks to the forecasted trajectory of inflation remains biased upwards, in an environment of high uncertainty.” There had been two 25-basis point hikes this year — in February […] More
Central Bank Watch
Czech National Bank Lifts 2-Week Repo Rate to 1.25% from 1.00%
August 2, 2018
Developing economies like that of the Czech Republic depend on capital inflows, and these have diminished as a result of U.S. President Trump’s protectionist agenda. Currencies have depreciated, forcing central banks to raise interest rates and counter imported inflation. Today’s Czech National Bank rate increase is the fifth of the cycle, following moves of 20 […] More
