Deeper Analysis
July in Figures
July 30, 2011
Two interrelated themes played out in July, a slowdown of global growth and unfolding U.S. and European fiscal crises. It was a good month for gold, bond prices and the Swiss franc but a poor one for the euro, dollar, and share prices. Gold advanced by more than $125 per ounce to record highs. Oil […] More
Foreign Exchange Insights and Next Week
Next Week
July 29, 2011
The main events next week will be The House of Representatives debt ceiling deadline on Tuesday. Scheduled central bank meetings in Australia, Japan, the Czech Republic, Romania, the U.K. and the euro area. The release of many purchasing manager surveys covering manufacturing, construction and service-sector activity. The gauntlet of U.S. labor market data: the ADP […] More
Foreign Exchange Insights and Next Week
Debt Problems and the Currencies
July 29, 2011
Currency markets have always spent a lot of time waiting for things to happen. Like a dog with a bone, markets focus on little else until potential game-changing events move from the future into the past, and then they search for a new obsession. The results at times are less important than removal of a […] More
New Overnight Developments Abroad - Daily Update
Fire and Rain: Data Deluge and Debt Frustration
July 29, 2011
Still lacking enough votes to pass, the U.S. House of Representatives postponed Thursday’s debt ceiling vote. Moody’s placed Spain’s Aa2 sovereign debt rating on review for a possible downgrade. The dollar is higher, not lower, on generalized risk aversion. It has advanced 0.7% against the euro, 0.6% versus the Aussie dollar, and 0.5% against the […] More
Central Bank Watch
Philippines’ Reserve Ratios Tightened
July 28, 2011
Bankgo Sentral Ng Pilipinas will raise reserve requirements by a whole percentage point effective August 5. This decision was not expected and matches one at the June 16 policy meeting and implemented on June 24. Interest rates were not changed at this time. Previously, the Filipino official borrowing and lending rates, that is the reverse […] More
New Overnight Developments Abroad - Daily Update
Stocks Down Sharply in Asia and Europe
July 28, 2011
Persistent debt concerns in the U.S. and Europe continue to depress the euro and share prices. Peripheral bond yield spread widened. Equities fell by 1.5% in Japan and Pakistan, 1.6% in Australia, 1.2% in India, 0.9% in South Korea, 0.7% in Indonesia and 0.6% in Taiwan and China. The German Dax and Paris Cac are […] More
Central Bank Watch
Reserve Bank of New Zealand Statement Possibly Misinterpreted
July 27, 2011
New Zealand’s Reserve Bank kept a 2.5% Official Cash Rate but released a statement that persuaded many analysts to predict a 50-basis point rate hike at the next meeting scheduled for mid-September. A perusal of the statement, however, reveals three conditions that need to be met to reverse the whole March rate cut, which had […] More
Larry's Blog
Nixon’s Dollar/Gold Speech
July 27, 2011
According to reports in the New York Times and elsewhere, August 15th appears to be a truer date than August 2 for when the United States federal government is likely to run out of resources to meets its expenses, barring Congressional action to raise the debt ceiling. This new deadline is fraught with historic irony. […] More
New Overnight Developments Abroad - Daily Update
Six Days and Counting
July 27, 2011
No discernible progress has been reported in the U.S. debt ceiling talks, yet markets are not falling apart. The dollar recovered 0.3% against the euro and edged up 0.1% against the yuan and sterling. The dollar fell 0.2% against the yen and loonie but is unchanged against the Swiss franc. Former Japanese Prime Minister Sakakibara […] More
Deeper Analysis
Swiss Franc Returns to Glory
July 26, 2011
Currencies that perennially appreciated were known as “hard currencies” in the early days of floating exchange rates, and the Swiss franc was the king of the hard currencies. No other currency could match it stride for stride, and Swiss officials at times implemented extraordinary measures to contain that power, even for a while imposing negative […] More
