Archive for December 17th, 2008

Central Bank Watch

Norwegian Central Bank Rate Reduced to 3% from 4.75%

December 17, 2008

The Norges Bank became the latest to exceed market expectations in the 175-bp size of its key rate cut. The move followed reductions of 50 basis points each on October 15th and 29th, bringing to 275 basis points the amount of rate reduction in the space of nine weeks. As with many other central banks, […] More

Dollar in Two-Day Plunge

December 17, 2008

From highs on Monday to lows today (Wednesday), the dollar fell 8.9% against the Swiss franc, 8.8% against the New Zealand dollar, 7.4% against the euro, 6.2% against the Australian dollar, 5.1% relative to sterling, 4.6% versus the yen and 4.3% against the Canadian dollar. These moves drive another nail into the dollar rise of […] More

Currency Markets in the News

Reaction to Federal Reserve's Radical Medicine

December 17, 2008

To paraphrase Churchill, the easing of Fed policy seems to have reached the end of the beginning. Zero central bank interest rates, popularly known by the acronym ZIRP, are virtually in place now. Policy from here will be measured by quantitative criteria, specifically the size of the Federal Reserve’s balance sheet. Such already had soared […] More

How the U.S. Current Account Deficit Was Funded in the Third Quarter

December 17, 2008

The U.S. current account gap narrowed almost 4% last quarter but at $174.1 billion still equaled a pretty sizable 4.8% of GDP. That ratio has hovered between 4.8% and 5.1% over the past year. The table below compares funding of this deficit during 3Q08 with the four prior quarters. Amounts are expressed in billions of […] More

New Overnight Developments Abroad - Daily Update

New Overnight Developments Abroad: BOJ Expected to Ease on Friday

December 17, 2008

The dollar fell 1.2% against the Swiss franc, 0.8% against the euro, 0.6% against the yen, and 0.5% against the kiwi. The greenback shows no change against the Australian dollar and gains of 0.8% against sterling and 0.2% relative to the Canadian dollar. The yen hit a new cyclical high of 88.18 per dollar. Sterling […] More