Foreign Exchange Insights and Next Week
Currency Volatility Presents Another Problem in a Difficult Policy Environment
October 14, 2011
The factors that bolstered the dollar strongly in September abruptly shut down this month. For one thing, a new calendar quarter, and one that oftentimes has not been a good one for the dollar, has begun. Two, a string of better-than-expected U.S. economic data has created more than reasonable doubt that a recession is at […] More
Central Bank Watch
Singapore’s Semi-Annual Monetary Policy Review: An Ease after Three Straight Tightenings
October 14, 2011
The Monetary Authority of Singapore (MAS) targets the currency rather than domestic interest rates and reviews its stance twice a year in April and October. In April 2010, MAS adopted a stronger range for its currency and shifted the S-dollar band from to one implying a flat trend to one allowing for modest and gradual […] More
Central Bank Watch
Chilean Monetary Policy on Hold
October 14, 2011
The Central Bank of Chile released a guarded statement after policymakers left steady the 5.25% benchmark interest rate, Latin America’s third highest after Brazil and Argentina. Officials note that domestic output and demand are moderating — the former more quickly than they had assumed. With overall inflation around 3.0%, core CPI and expected inflation remain […] More
New Overnight Developments Abroad - Daily Update
A More Constructive Tone for the Euro
October 14, 2011
Despite the lack of a big breakthrough in resolving the euro area’s debt crisis and a one-notch Spanish credit rating downgrade by S&P, this week’s more hopeful mood among investors has been maintained. Regional finance ministers meet today as a precursor to a meeting in Paris on the weekend of G20 finance ministers. The dollar […] More
Deeper Analysis
Today’s Release of Trade Statistics
October 13, 2011
The United States, Canada, and Great Britain reported August trade figures today, while China released its statistics for September. The U.S. goods and services trade deficits in July and August were almost identical at $45.625 billion and $45.608 billion. The deficit in the first half of 2011 averaged $47.494 billion, by comparison. The census-basis U.S. […] More
Central Bank Watch
ECB Opposition to Involuntary Private Sector Involvement (PSI) in Resolution of Private Debt Crisis
October 13, 2011
The ECB’s monthly publication seldom elicits market notice. The main editorial every month rehashes very closely the content of the statement released immediately after the Governing Council meeting and therefore contains no fresh information. The first main article in the latest issue, which presents a run-down of the regional economic situation, became news rather than […] More
Central Bank Watch
Korean Monetary Policy Left Unchanged
October 13, 2011
South Korea’s seven-day repo rate has been at 3.25% for the past four months following two hikes in 2010 in July and November and three similar moves in the first half of 2011 in January, March, and June. Three cuts between August 2008 and February 2009 had slashed the benchmark from 5.25% to 2.0%. Inflation […] More
New Overnight Developments Abroad - Daily Update
ECB Comment Weighs on Euro and Stocks
October 13, 2011
Investor attention was drawn to the ECB Bulletin where it is warned that forced euro bondholder write-offs could hurt the euro’s reputation. The euro fell as much as 1.7% against the yen and 0.9% relative to the dollar. Stocks in Europe lost 1.4% in Germany, 1.1% in France, and 0.8% in Great Britain. Compared to […] More
Central Bank Watch
Would the United States Be Better Off Without a Central Bank?
October 12, 2011
Presidential candidate Ron Paul blames the Federal Reserve for playing a major causal role in the 2007-08 financial crisis and ensuing weak recovery. Paul has been a critic of the U.S. central bank much longer than in the current business cycle. His thinking on the matter was heavily influenced some 30 years ago by the […] More
Deeper Analysis
Selected Comparative Economic Indicators
October 12, 2011
The table below compares the latest U.S., euro zone, Japanese and British estimated unemployment rates and on-year percentage changes of industrial production, retail sales, real GDP, and CPI inflation. Projected 2012 current account to GDP ratios according to the October Economist monthly survey are shown, too. U.S. Ezone Japan Britain Joblessness 9.1% 10.0% 4.3% […] More
