Archive for February 2012

Foreign Exchange Insights and Next Week

Next Week

February 24, 2012

Central banks hold interest rate policy meetings next week in The Philippines, Hungary and Israel.  G20 finance ministers and central bankers are meeting this weekend in Mexico City, and an EU summit in Brussels commences on Thursday.  The Fed releases its Beige Book on Wednesday, and numerous Fed officials are scheduled to speak publicly during […] More

Foreign Exchange Insights and Next Week

Euro Surprising the Pessimists

February 24, 2012

The better recent performance of the euro is subject to varying interpretations.  The EUR/USD is the best currency-against-currency barometer of sentiment toward the U.S. economy and dollar, so euro appreciation can simply reflect a vote of lessening confidence in the United States.  Or because the dollar is the most favored safe haven in the family […] More

New Overnight Developments Abroad - Daily Update

G20 Finance Ministers and Central Bankers Meeting in Mexico City

February 24, 2012

It’s been a decent Friday.  In signs of a risk-on trading sentiment, share prices are higher.  Oil is up, and the yen and dollar is down.  Revised German and British GDP data provided few surprises.  An  important meeting of Group of 20 officials begins today. The dollar rose to as high as JPY 80.67, highest […] More

Deeper Analysis

EU Commission Publishes Weaker Real Growth Projections

February 23, 2012

Real GDP in the euro area is now expected to contract this year by 0.3%, a 0.8 percentage point downward revision from what the EU Commission was predicting three months ago.  The dispersion of likely results among members is very wide.  Among peripherals that have received outside aid, GDP is expected to fall by 4.4% […] More

New Overnight Developments Abroad - Daily Update

Euro Sovereign Debt Concerns Continue to Weigh on Market Sentiment

February 23, 2012

The Greek bailout will only be as good as the assumptions about economic growth that underlie it, and those took a new hit today.  The EU revised projected GDP growth in 2012 downward to minus 0.3% from a forecast of 0.5% made in November.  For individual countries using the euro, the EU projects GDP contractions […] More

Deeper Analysis

U.S. Housing and Labor Markets: Progress Report

February 22, 2012

A collapse of the U.S. housing market triggered the Great Recession, and the labor market bore a heavy brunt of the punishing downturn.  A full recovery awaits a better sense of normalcy in both areas.  And while progress is being made, both markets are closer to their troughs than to pre-recession highs. First let’s look […] More

New Overnight Developments Abroad - Daily Update

Greek Misgivings Linger

February 22, 2012

Post-Greek deal relief has been disappointedly muted.  The dollar is stronger.  Long-term gilt and bund yields are softer.  Commodities and share prices are mostly down.  Investors don’t believe Greece will meet its deficit-reduction targets.  Elevated oil prices and softer-than-predicted European preliminary purchasing manager survey readings are two other concerns. The dollar strengthened overnight by 0.7% […] More

Central Bank Watch

Turkish Central Bank Tweaks Stance for First Time since October

February 21, 2012

The main monetary policy rate, the one-week repo, was left at 5.75%, its level since a 50-basis point cut last August.  The overnight borrowing rate of 5.0% since a 350-bp hike after the August meeting also was not changed.  However, the overnight lending rate was cut to 11.5% from 12.5%, thus narrowing the spread against […] More

New Overnight Developments Abroad - Daily Update

Second Greek Bailout Agreed and Met with Market Skepticism

February 21, 2012

EU finance ministers in Brussels reached agreement on a Greek bailout in the wee early hours of Tuesday.  EUR/USD initially advanced to $1.3294 but settled back to $1.3222 currently, a net overnight loss of 0.2% for the common currency.  The dollar also has climbed 0.9% against the Australian dollar, 0.6% versus the kiwi, 0.3% relative […] More

New Overnight Developments Abroad - Daily Update

Hopeful about Eurogroup Meeting in Brussels

February 20, 2012

European officials are said to be near agreeing on a EUR 130 billion Greek bailout.  Their meeting starts at 14:00 GMT.  Greek Finance Minister Venizelos asserted that all conditions for aid have been met by his country.  China’s Vice President and front-contender to be the next leader expressed a willingness to support the euro. In […] More

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