Larry's Blog
Is Standard and Poor’s Too Bearish about U.S. Public Finances?
April 18, 2011
Officials in the Obama Administration predictably called the decision by S&P, the credit rating agency, to change the outlook on its AAA rating for U.S. debt to “negative” far too bearish and unjustified. I disagree for several reasons. First, President Obama has been underestimating the scope for bipartisan governance since he was candidating for the […] More
Central Bank Watch
Hungarian Monetary Policy Unchanged As Expected
April 18, 2011
The two-week deposit rate of the Magyar Nemzeti Bank was left at 6.0%, the same result of the prior two meetings on February 21 and March 28, and a statement today made similar points as those from the statement after the meeting in March. Because of cost-push food and energy pressures, CPI inflation, which accelerated […] More
New Overnight Developments Abroad - Daily Update
Fresh Angst about EU Peripheral Debt Depresses Euro and Stocks in Europe
April 18, 2011
Big gains were scored by the Euro-phobic True Finns Party in yesterday’s Finnish election. The nationalistic party secured 39 parliamentary seats, up from just 6, and will likely join a Center-Right coalition. True Finns opposes IMF bailouts of troubled peripherals like Portugal, Ireland, and Greece, and Finnish law allows parliament to vote on and indeed […] More
Central Bank Watch
Mexican Key One-Day Interbank Rate Left at 4.5%
April 16, 2011
After 375 basis points of reduction within seven months from 8.25% at end-2008, the Bank of Mexico’s policy interest rate has remained at 4.5% since July 2009 and will continue to do so at least until the next Board meeting on May 27. Subsequent policy meetings are scheduled for July 8 and then August 26. […] More
Foreign Exchange Insights and Next Week
Next Week
April 15, 2011
Next week is book-ended by the IMF meetings in Washington at the start and the Good Friday/Easter holidays at the end. Central banks in Brazil, Sweden, Thailand and Hungary hold interest rate meetings, and the Reserve Bank of Australia and Bank of England release minutes of their meetings early this month. The main theme of […] More
Foreign Exchange Insights and Next Week
Some Central Banks Better Prepared for Inflation than Others
April 15, 2011
Evidence of an upturn in inflation continues to mount and can be found in a wide array of economies. Take the United States where consumer prices recorded a 12-month 2.7% rate of increase in March, up from 1.7% in November, and advanced at a 6.1% annualized pace between December and March, almost twice the pace […] More
New Overnight Developments Abroad - Daily Update
Many Data Releases and Ireland Gets a Ratings Downgrade
April 15, 2011
Moody’s downgraded Irish debt by two notches and left the outlook negative. Chinese GDP growth of 9.7% last quarter surpassed expectations of 9.4%. GDP had risen 10.3% in 2010 and 9.8% between 4Q09 and 4Q10. GDP advanced 2.1% quarterly between the final quarter of 2010 and first quarter of 2011. Other data, many of which […] More
Deeper Analysis
Intervention
April 14, 2011
The edition of Foreign Exchange Insights posted on this site for March 18th began, “Using many arguments, analysts like to downplay the usefulness and effectiveness of currency market intervention whenever that policy tool is employed.” Sure enough, blogger Adam Kritzer screened an article yesterday, entitled What’s next for the yen in which he observes the […] More
Central Bank Watch
Singapore Dollar Re-Centered Upward
April 14, 2011
After its semi-annual monetary policy review, the Monetary Authority of Singapore (MAS) has re-centered the SGD target range upward but not so much that the range mid-point is above the currency’s present level. The width of the trading band and the angle of its upward slope will remain as such were. Last Octoberl, the range’s […] More
New Overnight Developments Abroad - Daily Update
Weaker Euro
April 14, 2011
The dollar rose 0.4% against the euro and is 1.0% stronger than yesterday’s low of 1.4523/EUR. The dollar also advanced 0.4% against the Canadian dollar, 0.2% relative to the Australian dollar and 0.1% against the kiwi. The dollar lost 0.6% against the yen and 0.2% relative to sterling and the Swiss franc. The yuan is […] More
