Deeper Analysis

Comment on U.S. Current Account Data

March 21, 2017

U.S. President Trump has cast great attention on the U.S. trade and current account deficits, calling such a drag on the growth of U.S. real GDP and jobs and insinuating that the deficit expanded and the jobs and GDP situations deteriorated under his predecessor’s stewardship. The facts indicate otherwise¬†otherwise. The current account deficit averaged 2.5% […] More

New Overnight Developments Abroad - Daily Update

Dollar in Retreat

March 21, 2017

The dollar’s weaker again. The euro rose above $1.080 for the first time since February 2 and hit its best level since January 31. The greenback has fallen 0.9% against sterling, 0.7% relative to the euro, 0.4% vis-a-vis the kiwi, 0.3% versus the Swiss franc, Chinese yuan and Mexican peso, 0.2% against the loonie, and […] More

New Overnight Developments Abroad - Daily Update

Somewhat Softer Dollar in Wake of G20 Meeting of Finance Ministers and Central Bank Chiefs

March 20, 2017

The dollar slipped overnight by 0.4% against the New Zealand and Australian dollars, 0.2% relative to the euro and sterling, and 0.1% vis-a-vis the Swiss franc. The dollar is unchanged against the loonie and up 0.2% versus the peso and 0.1% against the yen and yuan. The Japanese and Mexican markets are shut for the […] More

Foreign Exchange Insights and Next Week

Comments on G20 Communique and Medium-Term Macroeconomic Expectations

March 19, 2017

The Group of Twenty finance ministers and central bank leaders met for two days in Baden-Baden, Germany and released a statement on Saturday that is notable for two omissions. The first deletion concerns trade and exchange rate policy. The pledge regarding currency management wasn’t changed and still states, We reiterate that excess volatility and disorderly […] More

Foreign Exchange Insights and Next Week

Next Week

March 17, 2017

Central Banks: Monetary policy reviews in New Zealand, Sri Lanka, Russia, The Philippines, and Colombia. Minutes of prior policy meetings to be published by the Bank of Japan and Reserve Bank of Australia. Fed officials speaking publicly include Chair Yellen, Evans, Kashkari, Mester, Dudley, George, and Bullard. The size of a new ECB targeted long […] More

Central Bank Watch

Central Bank of Chile Cuts Interest Rate to 3.0%

March 17, 2017

The Chilean monetary policy rate had been 3.5% for 13 months until a 25-basis point reduction in January, and now a second such cut has been engineered and statement released suggesting more easing may lie ahead: “if the recent trends of the economic scenario persist, and so do their implications on the medium-term inflation outlook, […] More

New Overnight Developments Abroad - Daily Update

Discussions on a Quiet Day in the Market

March 17, 2017

Fed Chair Yellen and U.S. Treasury Secretary Mnuchin are in Baden-Baden Germany for two days of talks with their Group of Twenty counterparts. Trade and currency manipulation will be center stage. German Chancellor Merkel is in Washington on a visit with U.S. President Trump, who has criticized the size of the German current account deficit […] More

Central Bank Watch

Bank of England

March 16, 2017

The Monetary Policy Council agreed again to leave its Bank Rate at 0.25%, but the vote drew a dissent for only the second time in the past dozen meetings. The dissent by Kristin Forbes, who favored a 25-basis point rate increase to 0.50%, was the first one she has cast since joining the MPC. Policymakers […] More

Central Bank Watch

Central Bank of the Republic of Turkey: No Further Rate Hikes This Time

March 16, 2017

A statement released after the latest policy meeting observes that inflation has risen sharply lately, notes that monetary policy has been tightened sharply over recent months, and elects to stay with the status quo this time. Since November 25, the overnight funding rate has been raised a full percentage point to 9.25%, and the one-week […] More

Central Bank Watch

Swiss National Bank Quarterly Policy Review

March 16, 2017

The current Swiss monetary policy stance dates back to January 2015 when a number changes were introduced. A previous cap on franc appreciation at 1.2000 per euro was abandoned, but a continuing role for discretionary, rather than automatic, forex intervention was retained to counter excessive appreciation as needed. By some objective criteria like purchasing power […] More

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