The U.S. and the Yuan
January 29, 2009
It’s bad diplomacy and bad currency management for officials to urge other governments to appreciate their currency because the other money’s appreciation is your currency’s depreciation. Markets examine the comments of incoming governments extremely closely, and speaking only about a bilateral currency pair does not dilute the impression of a soft commitment to currency stability. […] More
Currency Markets in the News
The Next Asset Bubble
January 29, 2009
The shoe that still has not fallen is the bursting of an asset bubble in fixed income securities. Bond prices are unsustainably high, and yields are too to last forever. As with other bubbles like those in new investment technology, real estate and equities, the one in fixed asset extremes is a global phenomenon, and […] More
Currency Markets in the News
Recession Depressing German Inflation
January 29, 2009
In times of severe recession such as these, it is a semantic point whether a central bank ties policy to real activity or price trends. Both strategies lead to the same place. Take the case of Germany where consumer prices fell 0.9% at a seasonally adjusted annual rate in the six months to January in […] More
Central Bank Watch
Another 50-Basis Point Rate Cut in the Philippines
January 29, 2009
The Central Bank of the Philippines implemented a second 50-bp rate cut today as expected. Along with a similar move on December 18th, four 25-bp hikes between January and August of last year have now been reversed. The Monetary Board also cut reserve requirements to 8% from 10% back in November. The central bank lending […] More
New Overnight Developments Abroad - Daily Update
New Overnight Developments Abroad: Australian and New Zealand Dollars Falter
January 29, 2009
The U.S. dollar rose 1.2% against both the Australian and New Zealand dollars. The Reserve Bank of New Zealand cut its cash rate by a greater-than-expected 150 basis points to 3.5% following reductions of 100 bps on November 23rd and 150 bps on December 4th. The greenback is mixed otherwise, sliding 0.6% against the yen, […] More
