Foreign Exchange Insights and Next Week
Foreign Exchange Insights
July 2, 2009
The pandemic of investor risk aversion pandemic in the second half of 2008 saw the dollar and yen appreciate strongly. Big dollar movements in that period were reversed to a sizable but far from complete degree in the first half of 2009 as shown below. Although the euro at mid-2009 was trading almost exactly at […] More
6.4 Million U.S. Jobs Lost Since End-2007
July 2, 2009
Non-farm payroll employment fell 467,000 last month, slightly more than the 436K per month decline in the second quarter but less than the negative pace of 691K per month in 1Q09 or 553K per month in 4Q08. Jobs also dropped 113K per month in 1Q08, 153k per month in 2Q08 and 208K per month in […] More
Central Bank Watch
ECB: Decision and Comments Produce No Surprises
July 2, 2009
As universally expected, the rate structure of the European Central Bank was not changed at this month’s meeting: a 1.0% refinancing rate surrounded by a 0.25% deposit rate and a 1.75% marginal lending rate. President Trichet’s statement stressed predictable points as well. The existing rate structure is appropriate. Sub-zero CPI inflation had been anticipated by […] More
Central Bank Watch
Central Bank of Iceland Halts Trend Toward Lower Interest Rates
July 2, 2009
Iceland’s central bank kept its key policy rate unchanged at 12% and warned that higher rates might become necessary if selling pressure on the krona and accompanying upward pressure on inflation and expected inflation doesn’t cease. Last October, an IMF-arranged aid package for Iceland mandated a 600-basis point rate hike to 18%, but that entire […] More
Central Bank Watch
Swedish Repo Rate Halved Unexpectedly to 0.25%
July 2, 2009
A sixth rate reduction of this cycle has been implemented by the Swedish Riksbank. Today’s cut was from 0.50% to 0.25%, which was declared a “practical” lower limit in a statement released by monetary authorities. Therefore, officials said the 0.25% repo rate level would be likely to be retained for a year and announced additional […] More
New Overnight Developments Abroad - Daily Update
New Overnight Developments Abroad: Dollar & Yen Higher Ahead of ECB Decision and U.S. Labor Report
July 2, 2009
Risk aversion has strengthened: stocks are down, and the dollar and yen are firmer. Equities fell 0.6% in Japan and Britain, 1.3% in Germany, 1.1% in France and Hong Kong, 1.9% in Thailand, and 1.4% in Singapore. The dollar and yen are unchanged against each other and up by 0.8% against the kiwi, 0.7% versus […] More
