foreign exchange

December and 2016 in Figures

December 31, 2016

Although the federal funds rate was raised three fewer times in 2016 than many U.S. monetary officials were expecting a year ago, short-term interest rate differential moved significantly more in favor of U.S. assets over the course of the year. This shift was reflected in 10-year bond yield spreads between the United States and both […] More

Dollar, Bond Yields, and Japanese Nikkei Slip

December 29, 2016

The dollar fell overnight by a further 0.5% against the yen, 0.4% relative to the euro, Aussie dollar and kiwi, 0.3% versus the loonie, peso and Swiss franc, 0.2% against sterling and 0.1% relative to the yuan. The Japanese Nikkei dropped 237 points (1.3%). Equities in Europe are down 0.3% in Spain and the U.K., […] More

Sovereign Debt Yields Lower on Last Business Day Before Christmas

December 23, 2016

Ten-year sovereign debt yields retreated four basis points in Germany and Italy, three bps in U.K., France and Canada and two bps in the United States. Japan’s market is shut to commemorate the Emperor’s birthday. The dollar slipped 0.2% overnight against the euro and yen but climbed against commodity-sensitive currencies and sterling. The greenback is […] More

Japanese Satisfaction Evident with a Weakening Yen

December 20, 2016

The yen fell 0.8% against the dollar after the Bank of Japan left its accommodative monetary stance unchanged despite a sharply lower yen. Governor Kuroda dispelled any thought of a possible rate hike, noting that depreciation lifts import prices, overall inflation, growth and expected inflation. The dollar also advanced 0.5% against the pound, 0.3% versus […] More

Dollar Strengthens against Euro after ECB Announcement

December 8, 2016

The dollar advanced 1.3% against the euro, 1.0% versus the Swiss franc, 0.5% relative to the Aussie dollar, 0.3% vis-a-vis the yen and sterling and 0.2% against the Mexican peso and Chinese yuan. ECB interest rates were left unchanged. The non-standard asset purchase program was extended nine months in duration but reduced to EUR 60 […] More

November in Figures

November 30, 2016

World financial markets spent most of November grappling with the implications of Donald Trump’s unexpected victory and the Republican Party’s coming control of the executive, legislative and judicial branches of the federal government, as well as most state governorships and legislatures. A possible December hike of the federal funds target became a virtual certainty after […] More

Super Dollar at the Expense of Bonds, Commodities and Now Even Stocks

November 18, 2016

The dollar hit overnight highs of JPY 110.94 and 1.0581 per euro. The dollar climbed 0.9% against the loonie, 0.4% relative to the Australian currency, and 0.2% versus sterling. The dollar advanced 0.4% against the Mexican peso in spite of another 50-basis point increase in the Bank of Mexico’s overnight interest rate to 5.25%. That rate […] More

Broad Dollar Gains and Sovereign Debt Price Losses… Oil Lower Too

November 16, 2016

Nothing about the Donald Trump phenomenon is playing out as pundits expected. The political talking heads repeatedly underestimated his victory chances through the Republican primaries and general election. And now market developments are fooling the economic prognosticators. The dollar is super-charged, rising overnight by 1.7% against the ruble, 1.2% against the Australian dollar and Polish […] More

Morning After or Eve of Destruction

November 7, 2016

The winner of Tuesday’s U.S. presidential election remains very much in doubt. Final opinion polls on nationwide popular voter preferences give Clinton a far thinner lead than the 75% likelihood that London bookies had attached to British voters rejecting the proposal to leave the EU on the day of that referendum vote 4-1/2 months ago. One wonders […] More

Financial Markets Don’t Like Strongmen Rulers

November 4, 2016

The Turkish lira fell over 1.0% in response to the arrest of Kurdish lawmakers who oppose the authoritarian Prime Minister Erdogan. Global stocks are down as U.S. opinion polls show that the possibility of Donald Trump winning the presidency has to be taken seriously. Share prices in the Pacific Rim fell 1.8% in South Korea, […] More

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