Archive for September 2009

Foreign Exchange Insights and Next Week

Next Week

September 25, 2009

The week to October 2nd includes Germany’s national election on Sunday, Yom Kippur observances on Monday, central bank policy meetings in The Philippines, Romania, Poland, and Hungary, and an eight-day National Holiday in China beginning Thursday commemorating the sixtieth anniversary of the communist revolution.  The ECB will be doing another long-dated 12-month repo, and the […] More

Foreign Exchange Insights and Next Week

Weekly Foreign Exchange Insights: September 25th

September 25, 2009

Currency movements continue to follow the cue of investor risk preferences, and stock prices provide a handy guide for shifting appetites between risk and safety.  It is the nature of economic data to become especially mixed when economies transition from recession to recovery.  As quarter-end approaches, numerous data reports have been weaker than forecast, a […] More

New Overnight Developments Abroad - Daily Update

New Overnight Developments Abroad: Big Rise of Yen and Drop in Nikkei

September 25, 2009

Several key currency big figures are now close by: namely $/Yen 90.0, Gbp/USD 1.6000, CAD/USD 1.0900.  The U.S. dollar fell 1.2% against the yen, encouraged by Finance Minister Fujii’s reiterated opposition to intervention and by fiscal-half corporate repatriations of overseas earnings.  The dollar also eased 0.4% against the Australian dollar, 0.3% against the euro and […] More

Central Bank Watch

Bank of Israel Policy Rate Kept at 0.75%

September 24, 2009

The Bank of Israel was one of many central banks that enacted several cuts in its policy interest rate during 4Q08 and 1Q09.  Two cuts totaling 75 basis points were announced last October, followed by two more cuts in November of 50 bps each, single cuts of 75 bps in December and again in January, […] More

Central Bank Watch

Czech National Bank Keeps Two-Week Repo Rate at 1.25%

September 24, 2009

The Czech central bank made no further rate reduction for the second time in its last three meetings, which was the result expected by most analysts.  However, two of seven policymakers voted in favor of a 25-bp cut to 1.0%.  From a peak of 3.75%, the two-week repo rate had earlier been reduced by 25 […] More

Central Bank Watch

Taiwan Discount Rate Held Steady at 1.25% as Expected

September 24, 2009

Taiwan’s discount rate was last reduced in mid-February by 25 basis points to a 55-year low of 1.25%.  In addition to six earlier cuts from September 26th to January 7, 2009, the discount rate had been lowered by 237.5 basis points in all from a prior peak of 3.625%.  Taiwan’s recession ended dramatically in the […] More

Central Bank Watch

Hong Kong Monetary Policy Unchanged

September 24, 2009

The Hong Kong Monetary Authority announced no change in its 0.5% base rate.  Domestic monetary policy is subordinated to the pegging the Hong Kong dollar at 7.8 per U.S. dollar, so interest rates move in lock-step with the Fed funds rate.  That parity rate was set initially in October 1983; allowed fluctuations around such were […] More

New Overnight Developments Abroad - Daily Update

New Overnight Developments Abroad: Weaker Pound and Dollar

September 24, 2009

The dollar climbed 1.0% against sterling but has lost 0.8% relative to the yen, 0.6% against the kiwi, 0.5% versus the Aussie dollar and Swiss franc, 0.3% against the euro and 0.1% against the Canadian dollar.  Reactions to yesterday’s FOMC statement are muted, as there were no major surprises or new initiatives.  Attention now turns […] More

Central Bank Watch

FOMC Statement Embodies Some Changes… Cautious and Accommodative Stance Retained

September 23, 2009

No change was made in the 0-25% target for the fed funds rate or the prediction of “exceptionally low levels for an extended period of time.”  No changes were announced in the size of the quantitative easing programs.  The plan to buy $300 billion of Treasury securities, as previously announced, will be completed by end-October […] More

Central Bank Watch

Norges Bank Announcement Lifts Krone

September 23, 2009

Norway’s central bank left its deposit rate point target at 1.25% within a 0.75 – 1.75% range as expected.  This was the same result as the previous meeting on August 12, representing a bottom after seven rate reductions totaling 450 basis points from 5.75% prior to mid-October 2008 and 1.25% after a 25-bp cut this […] More

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