Foreign Exchange Insights and Next Week
Next Week
February 26, 2010
Next week, the first in March, features the release of the monthly U.S. labor force survey, revised Euroland GDP, a quarterly corporate survey from Japan’s Finance Ministry, numerous purchasing manager survey reports (both manufacturing and services), and central bank policy meetings in Australia, Canada, Britain, Euroland, Indonesia, and Malaysia. The Fed Beige Book will be […] More
Foreign Exchange Insights and Next Week
How Bullish Should One Be About the Dollar?
February 26, 2010
This past week saw the dollar perform better in the minds of analysts than in the marketplace. Gloom about Europe’s peripheral members — affectionately known as the PIIGS for Portugal, Italy, Ireland, Greece and Spain — generated further speculation that the euro might be headed for divorce or worse, a failed marriage. Even so the […] More
New Overnight Developments Abroad - Daily Update
Loads of Data on Final Trading Day of February
February 26, 2010
The dollar lost 0.4% against the kiwi, 0.3% relative to the euro and Swissy, 0.2% versus the Canadian dollar and 0.1% against the Australian dollar. The U.S. currency is up 0.2% against sterling and 0.1% versus the yen. The Wall Street Journal carries a story today about some hedge funds anticipating a secular decline of […] More
Larry's Blog
Reflections About the Fed on a Snowy Day
February 25, 2010
A key message of Fed Chairman Bernanke’s testimony this week has been that while improved financial market functionality warrant the gradual unwinding of unconventional measures, the economy is not ready for outright monetary tightening. It may be an “extended period” before such a time arrives. The point is not that the recovery that saw GDP […] More
New Overnight Developments Abroad - Daily Update
Sharply Higher Yen
February 25, 2010
Uneasiness about Europe sent the yen and dollar higher. The yen gained 0.9% against the dollar and hit a one-year high against the euro of 120.20. At the new peak, the yen is 41.4% higher relative to the euro than when it stood at 170 per euro on July 23, 2008. The dollar has risen […] More
Deeper Analysis
Euro: An Imbalanced Marriage
February 24, 2010
To join Europe’s common currency, nations are required to meet five economic stress tests to ensure suitability. The standards are rigorous but count only for a brief moment in time. A Stability and Growth Pact, separate from the Maastricht Treaty that established the common currency, was meant to ensure that countries do not stray far […] More
Central Bank Watch
Humphrey-Hawkins Testimony: Play it Again, Ben
February 24, 2010
Formerly know as the semi-annual Humphrey-Hawkins hearings, the message today from Fed Chairman Bernanke to the House Banking Committee was little different from what he conveyed last time around on July 21. He drew a distinction between better market functionality, which is allowing the gradual reversal of unconventional liquidity provisions made to unfreeze a market […] More
Central Bank Watch
Poland and Sweden
February 24, 2010
Narodowy Bank, Poland’s central bank, left its seven-day reference rate at 3.5% as expected. The key rate has been at that level since a 25-basis point cut last June, which culminated 250 bps of easing in six moves over seven months. A statement from Policy monetary authorities unveiled new forecasts that are somewhat higher on […] More
New Overnight Developments Abroad - Daily Update
Dollar Mixed Ahead of Bernanke House Testimony
February 24, 2010
The first part of Fed Chairman Bernanke’s semi-annual Humphrey-Hawkins testimony begins at 15:00 today in the House of Representatives. He testifies tomorrow in the senate. Investors are eager to hear him field questions about the exit strategy. Bullard (SL Fed president) overnight said a lot of unwinding of quantitative easing is needed before any rise […] More
Deeper Analysis
A Couple of Falling Stars
February 23, 2010
A column in Tuesday’s Financial Times observes that some forty years in which the United States and Japan have held the top two slots in national GDP rankings will end sometime this year when China overtakes Japan. Although those Asian economies remain far apart on a per capita basis, Japan’s star has indeed fallen many […] More
