Central Bank Watch
Mexican and Colombian Key Interest Rates Unchanged After August 20th Policy Meetings
August 24, 2010
Mexico’s overnight central bank interest rate was held at 4.5%, the setting since July 2009, as was expected. GDP advanced 7.6% in the year to 2Q10, while CPI inflation had an on-year 3.6% rate of increase in July. A statement from the central bank promised to watch measures of expected inflation and the output gap. […] More
Central Bank Watch
Turkish Monetary Policy Left Unchanged
August 24, 2010
After meeting on August 19, officials at the Central Bank of the Republic of Turkey kept the one-week repo rate steady at 7.0%, reiterated that it would be necessary to maintain policy rates at current levels for some time and to keep them at low levels for a long period, and released a a statement […] More
New Overnight Developments Abroad - Daily Update
Market Squeezing Japan
August 24, 2010
The Nikkei-225 closed at 8,995, the first sub-9000 closing since May 6, 2009. The daily drop of 1.3% brought the cumulative decline since April 5, 2010 to 20.7%, thus qualifying as an official bear market. The yen advanced 0.9% against the dollar, touching a 15-year high of 84.15. The yen also hit a 9-year high […] More
Foreign Exchange Insights and Next Week
Next Week
August 22, 2010
Central bank meetings in the coming week scheduled in Israel, Hungary, Poland, and the Philippines are not expected to result in any changes of interest rates. Thai monetary officials, however, probably will tighten further. Fed Chairman Bernanke delivers an important speech at the annual Jackson Hole Symposium on Friday. In the euro area, preliminary purchasing […] More
New Overnight Developments Abroad - Daily Update
Risk Aversion Driven by North American Data
August 22, 2010
Over the final three days of last week, the dollar rose by 1.4% against the Australian dollar, 1.3% relative to the euro,l and 0.8% versus the Canadian and New Zealand dollars. 0.8% The greenback fell 0.8% against the Swiss franc but was hardly changed against the yen (+0.1%) and sterling (+0.3%). The Dow Jones Industrial […] More
Foreign Exchange Insights and Next Week
Administrative Notice
August 17, 2010
Currency Thoughts will be observing a lighter schedule over the next couple of days. Our apologies for any inconvenience. Copyright Larry Greenberg 2010. More
Deeper Analysis
Japanese and U.S. Government Bond Yields
August 17, 2010
Japan provides a good example of what happens to long-term interest rates when very low inflation or outright deflation occur. The ten-year JGB yield has averaged 1.45% since the end of 1997. Such dropped below unity recently and is presently at 0.95%. The yield first plumbed below 1.0% in 1998 during the Asian debt crisis, […] More
New Overnight Developments Abroad - Daily Update
Risk Aversion Wanes Somewhat
August 17, 2010
Currencies that benefit from greater risk aversion have eased. The Swiss franc and yen lost 0.4% and 0.2% against the dollar, which otherwise fell by 0.6% against the Canadian and Australian currencies, 0.5% against the euro, 0.3% against the kiwi, 0.2% against the yuan and 0.1% relative to sterling. Stocks recovered 2.2% in Sri Lanka, […] More
Deeper Analysis
Treasury-Reported International Capital Data Illuminate Two Paradoxes
August 16, 2010
According to the release of Treasury Department TIC flow data, Chinese holdings of Treasury securities fell by 24.0 billion in June and were $51.5 billion lower at midyear than at the end of April. This news comes after a night of stories out of Asia that Chinese officials are discretely diversifying the country’s reserve portfolio […] More
New Overnight Developments Abroad - Daily Update
Dollar Slips Against Yen, Euro, and Swiss Franc
August 16, 2010
The dollar lost 1.3% against the Swissy, 0.7% relative to the yen and 0.5% versus the euro. The greenback is steady against the Canadian dollar and sterling but up by 0.5% against the kiwi, 0.2% against the Australian dollar and 0.1% versus the Chinese yuan, which has retreated past 6.8000 per dollar. Market chatter about […] More
