New Overnight Developments Abroad - Daily Update
Dollar Eased as Overnight Data Came in Mixed
August 23, 2011
The dollar lost 0.8% against the yen, 0.4% relative to the New Zealand and Canadian dollars, 0.3% versus the euro, and 0.2% against the Swissie and Aussie dollar. The U.S. currency is unchanged against the yuan and sterling. Stocks are mostly higher with gains of 3.9% in South Korea, 3.3% in Taiwan, 2.2% in Australia, […] More
Foreign Exchange Insights and Next Week
Dollar Soft in Spite of Risk Aversion
August 22, 2011
The Swissie and yen at 14:40 GMT were 48.8% and 21.2% stronger than their 2010 lows against the dollar and 18.0% and 4.5% above last year’s highs. The kiwi and Aussie dollar were 3.5% and 1.8% stronger against their U.S. counterpart than at their best 2010 levels, and the U.S. currency was less than one […] More
Central Bank Watch
Monetary Tightening Paused in Colombia
August 22, 2011
In the face of intensifying global uncertainties, officials at the Central Bank of Colombia retained a 4.5% key overnight interest rate. Most analysts were looking for a seventh consecutive monthly tightening. The cyclical low of 3.0% had been maintained from end-April 2010 until an initial hike this past February, which was followed with increases in […] More
New Overnight Developments Abroad - Daily Update
Another Record High for Gold
August 22, 2011
Gold prices are up 1.7% on balance after spiking earlier to $1894.80. At the high, such was 19.4% above its level on July 21. Strong gains were also registered in other precious metal prices overnight. The data calendar today is very thin. Markets are calm so far. Weekend press was filled with speculation about a […] More
Deeper Analysis
Stock Market Declines Associated with Recessions
August 20, 2011
U.S. recessions are inevitably associated with weakening share prices. A recession from December 1969 to January 1970 saw the Dow Jones Industrial Average drop 35.9% from 985 on December 3, 1968 to 631 on May 26, 1970. The next recession occurred between November 1973 and March 1975. The DOW fell 45.1% from 1,052 on January […] More
Foreign Exchange Insights and Next Week
Next Week
August 20, 2011
The highlights of the coming week will be the Jackson Hole Central Banker Symposium starting Thursday and the release of revised U.S. and British GDP figures and preliminary Chinese and euro area purchasing manager survey results. Fed Chairman Bernanke’s address is set for Friday, one day shy of the anniversary of when he prepared markets […] More
Central Bank Watch
Icelandic Rate Hike
August 20, 2011
On August 17, Sedlabanki’s Monetary Policy Committee authorized the first increase of its seven-day collateralized interest rate since an IMF-mandated three percentage point jump to 18% in late October 2008. From March 2009 through February 2010, fifteen ensuing rate cuts had slashed the key rate all the way to 4.25%, where such remained for the […] More
New Overnight Developments Abroad - Daily Update
European Stocks Slump After GDP Data Are Released
August 16, 2011
The German Dax, Paris Cac and British Ftse are down 2.1%, 1.4%, and 0.7%. Euro area 2Q GDP results were softer than feared. Expectations are low on the outcome of a meeting today between French President Sarkozy and German Chancellor Merkel. In the Pacific Rim, stocks had rallied 4.8% in South Korea but fallen by […] More
Larry's Blog
Texans and the Dollar
August 15, 2011
When Texans have been in a position of high authority, bad things invariably seem to happen to the dollar, so my reaction to Governor Rick Perry’s entry into the Republican race was “there we go again.” For the record, Texas is America’s second most populous state, yet Texans have exerted a disproportionate influence over U.S. […] More
Deeper Analysis
U.S. Balance of Payments Weakened Prior to Midyear
August 15, 2011
Treasury capital flow data released earlier paint a weaker U.S. balance of payments. Foreigners sold $11.5 billion of U.S. long-term securities in June after buying $44.6 billion in May. Net purchases of U.S. securities averaged $26.0 billion per month in the second quarter, down from $53.9 billion per month in 1Q, and the first-half pace […] More
