New Overnight Developments Abroad - Daily Update
Significant Drop in Dollar and Yen
October 12, 2011
The dollar is unchanged against the yen but down by 1.8% against the kiwi, 1.7% versus the Australian dollar, 1.3% relative to the Swissie, 1.2% against the loonie, 1.1% against sterling and 1.0% vis-a-vis the euro. By a 63-35 vote, the U.S. Senate approved the Currency Exchange Rate Oversight Reform Act of 2011 that if […] More
Central Bank Watch
Central Bank Rate Cut in Indonesia
October 11, 2011
The only rate increase of the current policy cycle, a 25-basis point hike last February, has been reversed to help “mitigate the impacts of declining global economic and financial performance on Indonesian economic performance.” At 6.5%, the benchmark rate of Bank Indonesia returns to the level that was maintained from August 2009 until February 4, […] More
New Overnight Developments Abroad - Daily Update
Uneasiness about Europe Returns
October 11, 2011
The dollar is stronger, and stocks are lower in European trading. All eyes are on the Slovakian parliament where a vote to ratify the agreement to enlarge the EFSF could be rejected. ECB President Trichet meanwhile warned of mounting systemic risk related to the unresolved European sovereign debt crisis. The dollar has strengthened 0.8% against […] More
New Overnight Developments Abroad - Daily Update
German-French Accord to Recapitalize European Banks
October 10, 2011
French President Sarkozy and German Chancellor Merkel on Sunday announced an agreement to ensure sufficient capitalization of European banks. Although few details of the accord were released, markets reflect new appetite for risk. The dollar fell 2.1% against the Swissie, 1.7% relative to the Aussie dollar, 1.6% against the euro, 1.4% versus the kiwi, 1.1% […] More
Foreign Exchange Insights and Next Week
Next Week
October 7, 2011
U.S. markets are closed Monday for Columbus Day, but China reopens for business after a full-week closure to commemorate the founding of the People’s Republic in 1949. Central bank interest rate policy meetings are scheduled in Indonesia, South Korea, and Mexico. FOMC minutes will be released, and the ECB monthly Bulletin gets published. Euroland’s debt […] More
Foreign Exchange Insights and Next Week
Risk Aversion Isn’t Over until It’s Over
October 7, 2011
Don’t be fooled by the latest respite from risk aversion. Such will return and generally linger around for considerably longer. More about that in a moment after some quick comments on specific currencies. The euro/dollar key relationship is currently trading very near the $1.3375 average level for the nearly eight years that Jean-Claude Trichet has […] More
Central Bank Watch
Bank of Japan Review
October 7, 2011
The BOJ Policy Board, which eased earlier this year in March and August, met over two days for six hours and one minute and did the following Retained a 0.0-0.1% target on overnight money rates as expected. This near-zero interest rate policy (ZIRP) has been in effect since March. Even more telling, the rate hasn’t […] More
New Overnight Developments Abroad - Daily Update
U.S. and Canadian Jobs Day
October 7, 2011
Markets have absorbed yesterday’s ECB and Bank of England policy announcements and now look ahead to the release of North American September employment data. Weak U.S. jobs numbers are anticipated. The dollar shows overnight losses of 0.4% against sterling, 0.3% versus the Aussie dollar and 0.1% against the Swissie and kiwi. The greenback has gained […] More
Central Bank Watch
Peru’s Reference Monetary Policy Rate Left at 4.25%
October 6, 2011
The Central Reserve Bank of Peru did not change policy this month but served notice that it is watching global growth risks very carefully in a statement posted on its web site. The statement also observes a recent moderation in Peruvian growth. This decision takes into account the slowdown observed in some components of expenditure […] More
Central Bank Watch
Bank of Japan Preview
October 6, 2011
The Bank of Japan completes a two-day regular monthly monetary policy meeting Friday. These days monetary policy meetings everywhere have become more difficult to predict. Global headwinds rippling outward from Europe’s debt crisis have created financial market tensions for everybody, including Japan. The global situation is very fluid, so a relatively upbeat message from the […] More
