Foreign Exchange Insights and Next Week
Many Governments Want a Weak Currency, But Not All Can Make it Happen
June 18, 2010
The euro experienced its best week in many months but was not alone in advancing against the dollar. The euro’s gain was pretty much matched by the New Zealand and Australian dollars and surpassed by the Swiss franc. The U.S. dollar dropped about 2% against the yen and around 1% against the British and Canadian […] More
New Overnight Developments Abroad - Daily Update
Euro Retaining Firmer Tone
June 18, 2010
The euro touched $1.2416, best since May 28, and on balance has given up just 0.1% from Thursday’s close. Europe’s common currency has risen 2.3% so far this week. In a quiet end to the week, the dollar otherwise shows losses today of 0.5% against the yen and 0.2% versus the Swiss franc but is […] More
Central Bank Watch
Turkish Monetary Policy Unchanged
June 17, 2010
The one-week repo rate of the Central Bank of the Republic of Turkey was held at 7.0% as expected, and a statement from the monetary authorities had a somewhat dovish tone. It reiterates that present policy may be retained “for some time” and low rates could be maintained “for a long period of time.” Until […] More
Larry's Blog
Summertime Thoughts
June 17, 2010
Wide disagreement persists over what caused the Great Recession and how to reestablish sustainable long-term growth that puts unused labor back to work. Global growth remains very uneven and fraught with imbalances that make economic convalescence very fragile. A great fear is that eroded living standards in advanced economies is on a course with no […] More
Deeper Analysis
How the First-Quarter U.S. Current Account Deficit Was Funded
June 17, 2010
The Commerce Department release of quarterly U.S. international transactions, the most comprehensive snapshot of the balance of payments, contains several pieces of dollar-supporting news. The current account deficit, $109.0 billion, was about $10 billion smaller than expected. That sum was equal to 3.0% of GDP, similar to ratios of 2.8% in the prior quarter and […] More
Central Bank Watch
Swiss National Bank Quarterly Policy Review
June 17, 2010
The 0.25% target for 3-month Swiss Libor within a 0.0-0.75% range has been extended for another three months. This decision was expected. In response to the world and domestic recession, the SNB had cut the target five times by a total of 250 basis points between October 2008 and March 2009. There were reductions of […] More
New Overnight Developments Abroad - Daily Update
Swiss Franc Spikes Higher After Quarterly Monetary Policy Review
June 17, 2010
The Swissy advanced 1.5% against the dollar and to a new high for the move of 1.375 per euro. The U.S. dollar also lost 0.5% against the euro, 0.4% versus the New Zealand dollar and sterling, and 0.2% relative to the Aussie dollar and yen. Against the Canadian dollar, the greenback edged up 0.1%. Stocks […] More
Central Bank Watch
Central Bank of Chile Begins to Normalize Interest Rates
June 16, 2010
The key overnight Central Bank of Chile interest rate was doubled to 1.0% on Tuesday. The 50-basis point increase was greater than analysts were assuming. An increase this month had been strongly implied after policymakers met in May. They had slashed their rate by 600 basis points in the first quarter of 2009, 150 basis […] More
New Overnight Developments Abroad - Daily Update
New Uneasiness About European Public Finances
June 16, 2010
Officials denied market rumors of a big aid package being forged for Spain. German 10-year bund yields rose 3 basis points, and spreads of Spanish, Portuguese, and Greek sovereign debt yields above bunds have widened to 219, 295, and 651 basis points. The dollar advanced 0.3% against the euro and yen, 0.2% against the Canadian […] More
Deeper Analysis
Canada and United States Release Several Indicators: Highlights
June 15, 2010
Foreigners on net bought over $100 billion of long-term U.S. securities for a second straight month in April. The two-month average, $134.2 billion, compares very favorably with $43.8 billion per month in January-February, $53.3 billion per month in 2009 and $34.3 billion per month in 2008 and even exceeded the pace of $83.4 billion in […] More
