Mortgage Giants and the Dollar: A Broadening Connection
July 15, 2008
My previous posting today intimated that the knee-jerk reaction of the dollar to movement in oil prices could soon be joined by a second connection to news about Fannie Mae and Freddie Mac. If this connection becomes fully hard-wired in currency market sentiment, U.S. authorities will have further reason to fear a collapse in these […] More
Oil
Dollar Respite Unlikely to Endure
July 15, 2008
The dollar at this hour is more than a penny stronger than its earlier record low today of $1.6038 per euro. Fed Chairman Bernanke’s more alarmist remarks about the outlook for U.S. growth drove this respite, first sending oil prices sharply below today’s high of $146.73, which in turn boosted the dollar and trimmed some […] More
Interpretation of New Bank of Canada Statement
July 15, 2008
The main message is that no policy changes are pending in the short term, but a rate increase is eventually likely to be needed. With the present 3.0% rate, officials project a convergence of core inflation from below and total CPI inflation from above upon the medium-term target of 2.0% sometime during 2H09. Risks to […] More
Currency Markets in the News
Bank of Japan Modifies Policy Communication Strategy
July 15, 2008
A two-day policy meeting lasting six hours and 50 minutes total produced an as-expected decision to leave unchanged the target overnight rate of 0.5%, which has been at that level since February 2007. New interim forecasts revised growth slightly downward and core inflation sharply upward as had been anticipated. Governor Shirakawa stressed, however, that Japan […] More
New Overnight Developments Abroad - Daily Update
New Developments Abroad: Global Equity and Dollar Sell-off
July 15, 2008
Equities are down sharply by 2.0% in Japan, Germany, Indonesia and France . Fresh losses amount to 3.8% in Hong Kong, 4.1% in China, 4.5% in Taiwan, 3.3% in Thailand, 2.1% in Australia, and 1.7% in Britain. The dollar hit 2008 lows of $1.6038 per euro, Sing$ 1.3465, and 0.9832 per Australian dollar. The dollar […] More
Central Bank Watch
Bank of Canada Statement From June 10th
July 15, 2008
Canadian monetary officials were expected to cut their benchmark rate for a fifth consecutive time five weeks ago but instead delivered a huge surprise by keeping the rate at 3.0%. Market participants do not expect a rate change at tomorrow’s scheduled announcement. Click here to read the Bank’s policy statement from June 10th. More
