ECB

Euro Rises on ECB Announcements

March 10, 2016

The ECB Governing Council announced a more aggressive package of stimulants than analysts were expecting. All ECB central bank interest rates including the main refinancing rate were lowered. The size of monthly quantitative asset purchases was increased 33% to EUR 80 billion and will run at least through end-2017. The types of eligible assets in […] More

Central Banks Stand Down

January 21, 2016

In these tumultuous times, it would not be surprising to see monetary policy changes taken to help dissipate the high level of market fear.  Instead, The ECB Governing Council retained its interest rate structure, consisting of a 0.05% refinancing rate flanked by a negative 0.30% deposit rate and a +0.25% marginal lending rate. Brazil’s monetary […] More

ECB Delivers Less Support than Expected, Sending Euro Sharply Higher

December 3, 2015

ECB officials, who had strongly hinted that significant additional monetary policy relief is imminent, failed to meet the market’s expectations.  Largely in response, the dollar recorded an  overnight drop of 2.1% against the euro and 1.7% versus the Swiss franc.  Share prices in Europe are down 3.0% in France, 2.8% in Germany, 2.0% in Spain, […] More

Heavy Flow of Information Continues

September 3, 2015

The Bank of Brazil ended a 7-meeting streak of rate tightening, as risks of deepening recession outweigh danger of vicious cycle of currency depreciation and rising inflation.  The Selic Rate was left at 14.25%, its level after 325 basis points of tightening between October 2014 and July 2015. The Swedish Riksbank likewise left monetary policy […] More

Many Competing Stories but a Unifying Theme is Better Growth in Europe by a Slower Trend Elsewhere

April 15, 2015

ECB President Draghi is wrapping up his press conference.  Policy wasn’t changed further.  Focus is currently on full implementation of policy initiatives taken recently.  Draghi finds the favorable impact of quantitative easing to be impressive: real interest rates have fallen as expected inflation is rising.  An important new sentence in the released statement explains what […] More

Report of Weak German Orders and a Difficult Day for the Kiwi

March 5, 2015

The New Zealand dollar sank 1.0% against the dollar and fell to a one-month low against the Australian dollar on the possibility that the Reserve Bank of New Zealand might resort to property market-specific regulatory changes instead of and delaying a near-term interest rate hike. German industrial orders slumped 3.9% in January, reversing nearly all […] More

Spotlight on Central Banks

January 21, 2015

In response to disinflationary implications of the plunge in oil prices, the Bank of Canada cut its overnight money rate target to 0.75% from 1.0%.  Oil price changes also pose downside risks to growth, which is projected to fall to around 1.5% in the first half of this year, and to financial stability.  The prior […] More

New Highs for the Dollar

January 5, 2015

Fresh U.S. dollar highs for the move were set overnight of 1.1867 per euro, 1.5178 per pound, 0.8035 per AUD, CHF 1.0295 and C$ 1.1845.  The U.S. currency is currently below its overnight peaks but retains gains from Friday’s closing of 0.8% against the euro, 0.7% versus the Swiss franc, 0.6% relative to sterling, 0.4% […] More

ECB Hidden Agenda: Weaker Euro

November 6, 2014

The ECB didn’t change its three interest rates.  The refinancing rate of 0.05% has been flanked by a marginal lending rate of 0.3% and a deposit rate of -0.20%.  Each was cut by 10 basis points in September. Draghi’s main message, emphasized in his press conference, is that the ECB balance sheet will be expanding […] More

Dollar Little Changed Ahead of Draghi Monthly Press Conference

November 6, 2014

The dollar is up 0.2% versus sterling and 0.1% relative to the loonie, unchanged against the kiwi and yuan, and down by 0.3% against the euro, 0.2% vis-a-vis the Swissie and Aussie dollar, and 0.1% relative to the yen. South Korean officials complained about the recent weakening trend of the yen and said more would […] More

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