Archive for March 2009

New Overnight Developments Abroad - Daily Update

New Overnight Developments: Lessening Risk Aversion

March 26, 2009

Market developments overnight are consistent with receding risk aversion. Commodity-sensitive currencies, stocks, and bond yields rose. The yen fell. The dollar lost 1.3% against the kiwi, 0.7% relative to the Australian dollar, and 0.3% versus the Canadian dollar. It firmed 0.6% against the yen, 0.5% against the Swissy, and 0.1% against the euro but dipped […] More

Central Bank Watch

Norges Bank Rate Cut to 2.0% from 2.5%

March 25, 2009

Norway’s central bank as expected reduced its benchmark policy rate by 50 basis points and signaled the likelihood of more cuts in the second quarter, when the rate is expected to range between 1% and 2%.  This was the fifth reduction of the easing cycle following drops of 50 basis points on February 4, 175 […] More

Central Bank Watch

National Bank of Poland Eases 25 Basis Points

March 25, 2009

Poland’s central bank cut rates for a fifth consecutive month, but the reference rate was reduced by only 25 basis points in light of zlotty weakness raising inflation.  The reference rate now becomes 3.75%, 225 basis points less than peak.  February’s cut was also by 25 bps following back-to-back reductions of 75 bps in December […] More

Larry's Blog

U.S. Dollar Policy

March 25, 2009

The Obama Administration’s policy on the dollar is getting curiouser and curiouser.  At last night’s press conference, the president said, “I would just point out out that the dollar is extraordinarily strong right now.  And the reason the dollar is strong right now is because investors consider the United States the strongest economy in the […] More

New Overnight Developments Abroad - Daily Update

New Overnight Developments Abroad: Obama Comments on Dollar

March 25, 2009

In response to a question about China’s call for a global currency at last night’s press conference, President Obama asserted, “I would just point out the dollar is extraordinarily strong right now” and said he saw no need for a global currency.  The dollar lost 0.4% overnight against the yen and Swiss franc and 0.3% […] More

Central Bank Watch

Central Bank Rate of South Africa Cut By 100 Basis Points

March 24, 2009

The Reserve Bank of South Africa reduced its key interest rate to 9.5% from 10.5%, matching market expectations.  Along with two earlier reductions of 50 basis points announced December 11th and 100 bps on February 5th, rates have been cut by 250 basis points so far, and more relief will be forthcoming if economic growth […] More

Currency Markets in the News

Current Account Adjustments Well Under Way

March 24, 2009

The U.S. current account deficit narrowed to 3.7% of nominal GDP last calendar quarter from 5.0% of GDP in the first three quarters of 2008  and 5.3% of GDP in 2007.  Japan’s seasonally adjusted current account surplus amounted to 1.2% of GDP in the three months to January, down from 3.2% in 2008 and 4.8% […] More

New Overnight Developments Abroad - Daily Update

New Overnight Developments Abroad: Dollar and Stocks Mixed

March 24, 2009

The dollar is down 1.5% against the Canadian dollar and 0.7% relative to sterling but shows strong gains of 1.3% against the yen, 1.1% versus the kiwi, 0.9% against the Australian dollar, and  0.8% against the euro.  The buck edged 0.2% higher against the Swissy. The yen hit lows 134.51 per euro and 98.56 per […] More

Central Bank Watch

Bank of Israel Cuts Key Rate for Eighth Time

March 23, 2009

Somewhat unexpectedly, the Bank of Israel, which had already reduced its benchmark rate seven times to 0.75% from 4.25% prior to October 7th, announced a 25-basis point further reduction to 0.5%.  The statement released by monetary authorities gave familiar reasons for the cut: weakening domestic and global growth prospects, a credit crunch, downward-trending inflation, and […] More

Larry's Blog

Free Lunches Served on the Internet

March 23, 2009

An editorial discussing the proliferation of Internet companies without ample income in the latest issue of The Economist concludes that “the demise of a popular but unsustainable business model now seems inevitable.”  Survival through the cash cow of advertising worked for Google, but that strategy has not been reproduced as successfully as hoped elsewhere.  With […] More

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