Sterling
Sterling’s Legacy of Crisis
March 2, 2010
Britain’s periodic fiscal problems,chronic large trade deficits, comparatively high inflation and the enormous offshore holdings of sterling have made that currency an object of speculative selling through the ages. Prior to the modern era of floating dollar exchange rates, the pound devalued sharply after Britain quit the gold standard in 1931 for a second time. After [...] More
How Bullish Should One Be About the Dollar?
February 26, 2010
This past week saw the dollar perform better in the minds of analysts than in the marketplace. Gloom about Europe’s peripheral members — affectionately known as the PIIGS for Portugal, Italy, Ireland, Greece and Spain — generated further speculation that the euro might be headed for divorce or worse, a failed marriage. Even so the [...] More
Unsettling Data Releases
January 19, 2010
The ZEW reports on investor sentiment toward Germany and Euroland weakened more than expected in January. For Germany, the expectations index fell to 47.2 from 50.4 in December, 51.1 in November and 56.0 in October. The expectations index for the euro area printed at 46.4, down from 48.0 in December, 51.8 in November and 56.9 [...] More
Weekly Foreign Exchange Insights: Yearend Edition
December 30, 2009
The dollar is winding up 2009 on a bid note. Except in the unlikely event of a major decline on the final trading day of the year, this will be only the second time in the past eight years in which the U.S. currency rose against the euro between mid-December and yearend. The greenback’s firm [...] More
Dollar and Yen Sharply Higher
December 17, 2009
The dollar shows similar advances of 1.3% against the Australian dollar, 1.2% against sterling, the kiwi, and euro, and 1.0% relative to the Swiss franc and Canadian dollar. The greenback is only 0.1% firmer against the yen, however. Lots of short dollar positions getting stopped out. FOMC statement seen as mostly dollar-supportive. Senate Banking Committee [...] More
Bank of England Made No New Policy Moves This Month
December 10, 2009
The Monetary Policy Committee issued a short statement that the Bank Rate is being held at 0.5%, the asset purchase plan total will remain at Gbp 200 billion, and that the total will have been bought within two more months. The rate has been 0.5% since March, and Gbp 185 billion had been purchased as [...] More
Bank of England Preview
December 9, 2009
Chancellor of the Exchequer Darling delivered a pre-budget report today that did the expected, broke no new ground, and bequeathed a deficit of over 12% of GDP to the next government, which the Tories are heavily favored to capture in elections next May or June. This month’s meeting of the Bank of England Monetary Policy [...] More
Bank of England Keeps Foot on the Accelerator
November 5, 2009
The Bank of England Left its Bank Rate at 0.5%, the level since March and down from 5.0% since the start of October 2008 and a peak of 5.75% prior to December 2007. Extended the purchases of government and corporate debt by Gbp 25 billion to Gbp 200 billion, to be completed by February. A statement from the [...] More
Bank of England Preview
November 4, 2009
For the ECB, the key meetings fall in March, June, September and December because new staff forecasts are announced at those times. For identical reasons, the key Bank of England meetings tend to be those in February, May, August and November. Thursday’s announcement from the Monetary Policy Committee needs to address the issue of whether [...] More
Pound Sterling Revival
October 21, 2009
At today’s highs, the pound was stronger than at the time when Bank of England Monetary Policy Committee met on October 8 by 1.4% on a trade-weighted basis, 3.5% against the dollar, and 1.5% against the euro. From its low on October 12, the recovery amounts to 3.6% trade-weighted, 3.7% against the euro and 6.0% [...] More
