New Overnight Developments Abroad - Daily Update
Commodity Currencies Up, Sterling Down
March 24, 2011
The dollar has fallen 0.9%, 0.5%, and 0.3% against the New Zealand, Canadian, and Australian dollars. At $1441.39 per ounce, gold prices are within $4 of their intra-day record high and 0.2% firmer than Wednesday’s close. Oil advanced 0.7% to $106.46 per barrel and hostilities continue in Libya. Sterling has fallen 0.3% further against the […] More
Central Bank Watch
Turkish Reserve Requirements Tightened and Not Balanced with a Cut in Central Bank Rate
March 23, 2011
The Central Bank of the Republic of Turkey increased reserve requirements by between two and five percentage points. As of April 1, most will range from 9% to 15%. This move was not anticipated, as policymakers had adopted a wait-and-see stance in February after implementing changes in prior months that lowered key interest rates, widened […] More
Deeper Analysis
British Budget Highlights and Thoughts
March 23, 2011
Chancellor of the Exchequer George Osborne did not flinch from the deep deficit-reducing fiscal strategy adopted last year in spite of last quarter’s unexpected investment-led drop in real GDP, a rise in unemployment to 8%, and the weakest consumer confidence in some two years. The main headline to emerge from Osborne’s second budget address, a […] More
New Overnight Developments Abroad - Daily Update
Messy Politics
March 23, 2011
Peripheral bond premiums in the euro area continued to widen. Main focus is on Portugal, where a key budget meeting sees mounting resistance to austerity moves, possible fall of the government, and then need for bailout money or default. Allies are bickering over command responsibilities in imposing a no-fly zone over Libya. The minority Conservative […] More
Deeper Analysis
Conservative Canadian Federal Budget from Conservative Minority Government
March 22, 2011
Prime Minister Harper’s government presented a budget today that Offers CAD 7.6 billion over six years in new spending to appease political opposition but Embodies CAD 6.2 billion in savings over five years, escalating from CAD 195 million in 2011/12 to CAD 796 million in FY12/13 and CAD 1.569 in FY13/14 Thereby reducing the projected […] More
New Overnight Developments Abroad - Daily Update
Same Broad Trends as Yesterday
March 22, 2011
Commodity-sensitive currencies continued to advance, with the New Zealand, Australian and Canadian dollars gaining another 1.0%, 0.5% and 0.2% against their U.S. counterpart. Following yesterday’s Vernal Equinox market closure, the Nikkei jumped 4.4% despite reports of elevated radiation levels in the area surrounding the Fukushima reactor complex. Information about the accident remains guarded. In other […] More
Deeper Analysis
A Weak Dollar, Strong Yen, and Intervention
March 21, 2011
The dollar posted very similar average trade-weighted values in the 1990s and 2000s, but it is currently about 22% weaker than those mean decade values. Last week’s yen peak of 76.25 per dollar was the Japanese currency’s strongest ever, and dollar came within 2% of a 10-year low against the euro. The trade-weighted yen is […] More
New Overnight Developments Abroad - Daily Update
Share Prices and Commodity Currencies Higher
March 21, 2011
Few data releases this Monday. In Japan, which was closed for the Vernal holiday, news was mixed. While progress was reported in cooling the damaged nuclear reactor, radiation was discovered in food and water there. Oil prices climbed 1.6% to $102.72 per barrel, as the U.S., France, and Britain engaged in missile strikes in Libya […] More
Foreign Exchange Insights and Next Week
Next Week
March 18, 2011
Japan, where much of this past week’s attention has been, will be shut Monday for the Vernal Equinox holiday. Central bank meetings are scheduled in South Africa, The Philippines, Turkey and the Czech Republic, and investors will also pay close attention to the British annual budget and Bank of England minutes, each of which is […] More
Foreign Exchange Insights and Next Week
Yen Intervention Just One of Several Currency Market Themes
March 18, 2011
Using many arguments, analysts like to downplay the usefulness and effectiveness of currency market intervention whenever that policy tool is employed. They say central banks lack the firepower to move a market with daily volume that exceeds $4 trillion, that intervention gives speculators an opportunity to book profits, and that only intervention that is done […] More
