Deeper Analysis
August in Figures
August 30, 2014
Long-term interest rates fell substantially in August. Stock markets, with the notable exception of Japan, recorded gains, and the U.S. performance was the best in a half year. The dollar rose against the euro, Swissie, sterling, yen and kiwi but fell marginally against the loonie, yuan and Australian dollar. Short-term interest rates were narrowly mixed […] More
Foreign Exchange Insights and Next Week
Next Week
August 29, 2014
Next week will be holiday-shortened because of Labor Day observances on Monday in the United States and Canada. Central bank policy meetings will be held in the U.K., Euroland, Japan, Brazil, Poland, Mexico, Romania, Sweden, and Canada. The Fed Beige Book gets published on Wednesday, and BOJ minutes will be released Friday. Mester, Plosser and […] More
New Overnight Developments Abroad - Daily Update
End of August Brings a Ton of Released Data
August 29, 2014
The dollar is unchanged overnight against the euro, sterling and yuan. The greenback gained 0.2% versus the yen and Australian dollar and 0.1% vis-a-vis the kiwi, while losing 0.2% to the loonie and 0.1% against the Swiss franc. The price of gold has slid 0.3% to $1,286.0 per ounce despite additional military gains by pro-Russian […] More
New Overnight Developments Abroad - Daily Update
A Turn for the Worse in Ukraine and Lots of Data to Peruse
August 28, 2014
Pro-Russian rebels in Ukraine stepped up their attacks, seizing more territory. Ukraine’s prime minister called the act a de facto invasion by Russia. Harsher European economic sanctions on Russia appears the likely response. The main market reaction has been in stocks, bonds and gold, not the dollar The U.S. currency is unchanged overnight against the […] More
Foreign Exchange Insights and Next Week
The Political Will to Encourage a Weaker Euro Will Continue to Build and Build
August 27, 2014
ECB officials face difficult choices. Deflationary risks are not fading as they had hoped. The confidence of businesses and households has started to flounder. Investors are readying for quantitative easing (QE). But there are good reasons why until now QE hasn’t been implemented by the ECB in sharp contrast to central bank policies in Japan, […] More
Central Bank Watch
A Somewhat Peculiar Statement from the Central Bank of the Republic of Turkey
August 27, 2014
The monetary policy committee left its one-week repo rate and overnight borrowing rate unchanged at 8.25% and 7.5%, respectively, but surprised analysts with a 75-basis point cut of the overnight lending rate to 11.25%. That rate hadn’t changed since a 425-basis point hike to 12.0% on January 29. At that same time, the repo rate […] More
New Overnight Developments Abroad - Daily Update
Dollar’s Recent Gains Trimmed
August 27, 2014
The dollar has declined overnight by 0.5% against the Canadian and New Zealand dollars, 0.4% versus the Aussie dollar, 0.2% relative to sterling and the Swiss franc and 0.1% vis-a-vis the yuan, yen and euro. While not a big day for scheduled data reports and despite an open-ended ceasefire agreed in Gaza, minor European confidence […] More
Central Bank Watch
Magyar Nemzeti Bank
August 26, 2014
Monetary Council officials signaled last month that a two-year cycle of central bank reductions totaling 490 basis points from 7.0% prior to August 2012 to the current level of 2.10% had been completed. So it was no surprise to investors to learn today of this month’s Council decision to leave the rate at 2.10%. A […] More
New Overnight Developments Abroad - Daily Update
Euro Weak but Not Weaker in Early Tuesday Trading
August 26, 2014
The post-Jackson Hole soft tone in the euro continued, but the common currency’s losses haven’t been extended. Investors believe quantitative easing by the ECB is coming, and there’s speculation of a mutually beneficial accord between Draghi and Yellen to promote euro depreciation. The euro is trading marginally below $1.32 and lies also south of CHF […] More
Central Bank Watch
Bank of Iceland
August 21, 2014
The Bank of Iceland made a scheduled interest rate announcement on Wednesday. Iceland’s seven-day central bank interest rate was kept at 6.0%, its level since November 2012. A released statement observes, “The inflation outlook has improved somewhat since May, and it now appears that inflation will remain close to target during the forecast horizon. A […] More
