New Overnight Developments Abroad - Daily Update
Focus on Fed and Other Central Banks
December 16, 2009
The dollar is mixed as markets await the FOMC statement around 19:15 GMT today. No rate change is expected. A change in language on future rate guidance also seems unlikely, but modifications will be made in economic assessment and possibly comments about unconventional stimulus. The dollar is up 0.7% against the Australian dollar and 0.4% […] More
Deeper Analysis
End-of-Year Bias in EUR/USD
December 15, 2009
In six of the past seven years, EUR/USD declined on net between mid-December and yearend, and the dollar dropped in this seasonal interval in eight of ten second-half Decembers since the euro was created. The average change in the dollar for that period was minus 1.3% during those ten years. An even stronger bias of […] More
Videos
Pre-FOMC Interview With ForexTV
December 15, 2009
In this second interview that I gave to Julie Sinha of ForexTV, I review and interpret the significance of today’s U.S. producer price and industrial production data releases and provide some background on the FOMC’s tendency not to make waves at its final December meeting each year. More
Deeper Analysis
Surprisingly Brisk U.S. Growth This Quarter
December 15, 2009
The dollar’s upturn began with improving market technical support but is now getting fed by economic data, which are highlighting a comparatively stronger U.S. recovery after a recession that, despite being harsh in absolute terms, was not as severe as other regions experienced. In U.S. data released this morning, industrial production registered an advance of […] More
New Overnight Developments Abroad - Daily Update
Dollar Reversal Gaining Momentum
December 15, 2009
The dollar has risen 1.1% against the Australian dollar, 0.8% versus the Swiss franc, 0.7% relative to the euro and kiwi, 0.5% against sterling and 0.4% against the Canadian dollar. USD/JPY slid 0.2%. Investors are scrambling to unload short dollar positions, believing the U.S. will grow faster than thought previously and fearful about the Greek […] More
Deeper Analysis
How Fast Must U.S. Employment Expand to Recapture Lost Ground?
December 14, 2009
This past Friday in the New York Times, Paul Krugman’s column projected that U.S. jobs might have to growth about 300K per month to return to full employment by the end of 2014 five years from now. To an economist, full employment connotes a state where all labor that wants to work is working and […] More
Central Bank Watch
Central Bank of Sri Lanka Leaves Key Interest Rates Unchanged
December 14, 2009
Monetary policy easing paused in Sri Lanka as expected. The key reverse repurchase rate was kept at 9.75%, having previously been lowered by 75 basis points in November, 50 basis points in September and a total of 225 bps from 12.0% since February. The repo rate stays at 7.5%. Such was reduced by 50 bps […] More
New Overnight Developments Abroad - Daily Update
Japan, Dubai, and Austria in The News
December 14, 2009
Japanese Tankan business survey produces mixed results. Abu Dhabi government lending $10 billion to help Dubai World restructure debt and avoid default. Austrian government nationalized Hypo Alpe-Adria Bank. The yen is 0.8% stronger against the dollar, which otherwise shows no change against the euro or Swiss franc and gains of 0.4% against the Canadian dollar, […] More
Deeper Analysis
Bank of Japan Business Survey Not As Poor As Feared
December 13, 2009
The Bank of Japan survey of businesses, known as the Tankan, depicted better conditions now than last September, but projected large reduction in sales, earnings, and business spending this fiscal year underscore the fragility of the outlook following Japan’s worst postwar recession. Diffusion indices in the table below were derived by subtracting the percent of […] More
Foreign Exchange Insights and Next Week
Next Week
December 11, 2009
Central banks hold monetary policy meetings next week in the United States, Japan, Sweden, Norway, the Czech Republic, Hong Kong, the Philippines, Colombia and Turkey, but not are expected to change rates. The BOJ Board meets not long after an emergency meeting that approved a new injection of short-term liquidity in Japan. The FOMC statement […] More
