Foreign Exchange Insights and Next Week
Next Week
November 20, 2009
There is a fuller calendar of scheduled economic data releases next week than the one that just ended despite significant holiday interruptions in North America and Asia. Central bank policy meetings in Israel, Malaysia, Mexico and Poland are not expected to result in any interest rate changes, but a cut in Hungary appears to be […] More
Foreign Exchange Insights and Next Week
Weekly Foreign Exchange Insights: November 20th
November 20, 2009
Currency markets are not showing very strong convictions about future trends, and that’s understandable given the wide dispersion of projected economic growth in 2010 among economists. Although the new year and decade begin in less than six weeks, a minority of analysts are projecting U.S. growth of 4.0%, others fear a relapse into recession, and […] More
Central Bank Watch
Bank of Japan Upgrades Assessment And Leaves Key Rate at 0.10%
November 20, 2009
As it has done all this calendar year, the Bank of Japan left its overnight uncollateralized interest rate steady at 0.1%. The vote was 8-0, and the decision was universally anticipated by analysts. The two-day meeting had lasted just under 6-1/2 hours in all. What had not been generally foreseen was a further upgrade in […] More
New Overnight Developments Abroad - Daily Update
New Overnight Developments Abroad: Widening Policy Dispute Between Japanese Government and BOJ
November 20, 2009
Overnight currency movements — a firmer yen and dollar — indicate greater aversion to risk. The dollar lost 0.2% against the yen but strengthened 1.0% against the kiwi, 0.8% against sterling and the Aussie dollar, 0.4% relative to the Canadian dollar and Swiss franc and 0.3% against the euro. Pacific Basin stocks were mostly lower, […] More
Central Bank Watch
Turkish Rate Cuts Nearing the End of the Line
November 19, 2009
As forewarned after the prior rate cut on October 15th, the Central Bank of the Republic of Turkey implemented its smallest overnight borrowing rate cut of the cycle, a 25-basis point reduction to 6.5%. Twelve prior cuts added up to 1000 basis points and were distributed as follows: 50 bps in November 2008, 125 bps […] More
Central Bank Watch
Bank of Japan Preview: No Rate Hike on Radar Screen
November 19, 2009
The BOJ released new quarterly forecasts at its previous Policy Board meeting on October 30, which penciled in projected core CPI inflation of minus 1.5% this fiscal year, minus 0.8% in Fiscal 2010, and minus 0.4% in Fiscal 2011 ending March 2012. Unless that deflationary view somehow changes, a rate hike is not likely before […] More
Larry's Blog
Double Dip, Anyone?
November 19, 2009
One indication of investor uneasiness is the frequency of the use of the expression “double dip.” The term refers to a relapse into contracting activity after an economy has returned from recession to an expansionary phase of the business cycle. As fate would have it, today’s Financial Times and Wall Street Journal each ran lead […] More
New Overnight Developments Abroad - Daily Update
New Overnight Developments Abroad: Yen and Dollar Climbed Significantly
November 19, 2009
The dollar has posted overnight gains of 2.3% against the kiwi, 1.4% relative to the Australian dollar, 0.8% against the Swiss franc, 0.7% versus sterling and the euro,and 0.6% against the Canadian dollar. Risk aversion is making a comeback, and a 0.4% rise of the yen is consistent with that. Keeping with that theme of […] More
Larry's Blog
Yuan Rules and the 2010 U.S. Election
November 18, 2009
A shift away from the yuan’s fixed peg at 6.83 per dollar had been a top goal of Team Obama’s Asian trip and is now one the week’s largest embarrassments. Chinese officials rebuffed the request more forcefully than necessary and turned the object of complaint around to Washington’s neglectful dollar policy. This public posturing backs […] More
Deeper Analysis
Developments in Inflation
November 18, 2009
The United States and Canada reported new consumer price statistics today, and Euroland and British data were released within the past week. The comments of central bankers would have us think that if low and stable inflation can be secured, all other economic problems will be manageable. The latest 12-month inflation rates are minus 0.2% […] More
