Central Bank Watch
A Second Hungarian Central Bank Rate Hike
December 20, 2010
Magyar Nemzeti Bank, which had cut its base rate fourteen times from 11.5% at the start of November 2008 to 5.25% by end-April 2010, announced a second consecutive monthly advance of 25 basis points to 5.75%. A statement released by officials today cited the likelihood that inflation will remain above target due to cost-push shocks […] More
New Overnight Developments Abroad - Daily Update
Peripheral Sovereign Debt Concerns Weigh on Euro
December 20, 2010
The euro edged 0.1% lower against the dollar, which otherwise shows losses of 0.5% versus the kiwi, 0.4% against the Swiss franc, 0.3% relative to the Australian dollar, yen and sterling, and 0.2% against the Canadian dollar. ECB President Trichet reiterated the views that EMU member governments must adhere to fiscal discipline but called speculation […] More
Central Bank Watch
No Change in Colombian Base Rate
December 17, 2010
The Central Bank of the Republic of Colombia left its monetary policy rate at 3.0%, the level since a 50-basis point cut last April. That was the only rate change in 2010, but 600 basis points of reduction were implemented during 2009. Prior to an initial rate cut of 50 bps in December 2008, the […] More
Foreign Exchange Insights and Next Week
Next Week
December 17, 2010
The week before Christmas has generally less activity than the week after. Many markets, including the United States, will be shut Friday. Britain is closed the following Monday and Tuesday, and Japan celebrates the Emperor’s birthday on Thursday, December 23rd. There are central bank meetings in Poland, Japan, Hungary and the Czech Republic, and the […] More
Foreign Exchange Insights and Next Week
Currency Crystal Ball Gazing: December 2010
December 17, 2010
The tempting prediction for next year is that the dollar will appreciate against the euro, especially since it remains roughly 10% weaker than its life-time average value of 1.1891 per EUR. The timing and end of the euro’s identity crisis remain unclear. Against the yen, the dollar touched sequentially lower calendar year highs and lows […] More
New Overnight Developments Abroad - Daily Update
Muted Reaction to Large Downgrade of Irish Credit Rating
December 17, 2010
Moody’s credit rating service knocked down Ireland’s rating by five notches to Baa1, just three steps above investment grade, and left the outlook at “negative,” thus signaling the possibility of an additional downgrade. The dollar nevertheless fell 0.5% against the euro and 0.4% relative to the Swiss franc. The move reflects 1) a further improvement […] More
Central Bank Watch
Another Rate Increase in Chile
December 16, 2010
The Central Bank of Chile boosted its overnight rate after every monthly policy meeting since June. With another 25 basis points announced today, the key rate has climbed from 0.5%, the level from July 2009 until mid-June, to 3.25%, but the new rate remains 500 basis points below the last cyclical peak of 8.25% at […] More
Central Bank Watch
Turkish Monetary Policy Mix Modified
December 16, 2010
The Central Bank of the Republic of Turkey is taking an unconventional approach to stem excessive hot money inflows that have put upward pressure on the Turkish lira and which, officials fear, could create financial instability if left unchecked. The main one-week repo rate has been cut for the first time since November 2009, dropping […] More
Central Bank Watch
Swiss Quarterly Monetary Policy Statement
December 16, 2010
The Swiss National Bank left its three-month Libor rate target at 0.25% within a corridor of zero to 0.75%. That’s been the target since March 2009 following reductions of 25 basis points in October 2008, 150 bps in two steps during November 2008, 50 bps in December 2008 and 25 bps in March 2009. In […] More
Central Bank Watch
Reserve Bank of India Sends a Mixed Message
December 16, 2010
The Reserve Bank of India left its policy interest rates unchanged but announced measures to release some primary liquidity in the money market system to alleviate some strains caused by rupee appreciation and sluggish bank deposit growth among other things. In a new statement, monetary officials admonished that such steps as plans to buy government […] More
