New Overnight Developments Abroad - Daily Update
Dollar and Bond Yields Up, Stocks Down
October 27, 2010
The dollar advanced 1.3% against the Australian dollar, 0.4% versus the Canadian and New Zealand dollars, 0.3% relative to the Chinese yuan, and 0.2% against the euro and Swiss franc. The dollar is unchanged against sterling and the yen. Ten-year sovereign bond yields have climbed five basis points in Japan and Germany and four basis […] More
Central Bank Watch
A Third 25-Basis Point Rate Hike in Sweden
October 26, 2010
The Riksbank followed up increases on July 1 and September 2 with a third 25-bp repo rate increase to 1.0% and released a statement that a) revised projected 2010 and 2011 growth higher, b) scaled back projected consumer price inflation in 2011 and 2012, and c) depicted a lower projected repo rate path than shown […] More
New Overnight Developments Abroad - Daily Update
Sterling Lifted by U.K. GDP Data
October 26, 2010
The British pound climbed 1.1% against the dollar on a much stronger-than-forecast initial estimate of 3Q U.K. economic growth. GDP advanced 0.8% (3.3% annualized), twice as much as expected. On-year growth was 2.8%, up from 1.7% in the second quarter. Construction, production, and services each contributed positively to GDP growth last quarter. Market participants concluded […] More
Central Bank Watch
Bank of Israel Benchmark Interest Rate Left at 2.0%
October 25, 2010
As analysts anticipated, there was not a seventh rate increase. The six increases, each by 25 basis points, were announced in August 2009, November, December, March 2010, July and September. A statement from the Bank of Israel reiterates that a process remains in place of gradual rate normalization that should lift the key rate to […] More
Central Bank Watch
Hungarian Base Rate Held Steady at 5.25% as Expected
October 25, 2010
The Magyar Nemzeti Bank left its benchmark interest rate unchanged for a sixth consecutive monthly meeting citing the prolonged period of sub-trend economic activity and an uncertain inflation outlook. On-year CPI inflation edged up a tenth to 3.8% last month but had eased 2.2 percentage points over the previous four months. Domestic demand remains weak. […] More
New Overnight Developments Abroad - Daily Update
Dollar Drops in Wake of G20 Meeting
October 25, 2010
The dollar is trading below Friday closing levels by 1.3% against the Australian dollar, 1.0% versus the kiwi, 0.9% relative to the yen, Swissy, and Canadiand dollar, 0.6% against the euro, 0.3% versus sterling and 0.1% against the yuan. See G20 statement review. The communique called for reduced external imbalances but did not unveil numerical […] More
Deeper Analysis
G20 Statement
October 24, 2010
G20 finance ministers and central bankers released a Communique after meeting Friday and Saturday. The rhetoric goes further than most analysts, but the reaction of many market participants was unimpressed, critically negative and dismissive. Some doubters believe the public sector is inept, duplicitous and corrupt in everything that it tries. Because of the G20’s cumbersome […] More
Foreign Exchange Insights and Next Week
Next Week
October 22, 2010
A very busy week lies ahead beginning with a G20 statement tomorrow. Central bank policy meetings will be held in Israel, Hungary, India, Poland, the Czech Republic, Sweden, Norway, New Zealand, and Japan where a new quarterly outlook with forecasts will also be published. The Reserve Bank of Australia publishes its annual report. Many Fed […] More
Foreign Exchange Insights and Next Week
Can a Dollar Floor Be Found Soon?
October 22, 2010
Last week was just full of surprises. Monetary policies around the world became more diversified. A tightening interest rate cycle began in China, and ECB officials showed more willingness to scale back unconventional measures. Other central banks, for example those in Canada and Brazil, put rate normalization programs on pause, and a third group including […] More
New Overnight Developments Abroad - Daily Update
A Proposal from Geithner to the G20
October 22, 2010
Finance ministers and central bank chiefs from the Group of Twenty are meeting in Gyeongiu, South Korea. U.S. Treasury Secretary Geithner has proposed a target for current account-to-GDP ratios, which the big surplus countries appear to be rejecting. Market players doubt any significant breakthrough on currency management will emerge at this meeting but are in […] More
