Deeper Analysis
January in Figures
January 31, 2017
The slumping dollar was the fulcrum of financial market activity in January. Dollar lows for the month were hit on January 31 against the euro, yen, Swiss franc, Australian dollar and kiwi, and the monthly highs occurred on either the third of second day of the months. From their lows to their highs, the Aussie […] More
Central Bank Watch
Bank of Japan Review
January 31, 2017
By another 7-2 vote with Kiuchi and Sato again dissenting, monetary policymakers voted not to change its interest rate targets, the size of quantitative easing, the medium-term inflation target, guidance governing future policy decisions, or its assessment of Japanese growth and inflation conditions and prospects. This result was expected. The statement on monetary policy retains a […] More
New Overnight Developments Abroad - Daily Update
Monday Night Massacre, Lots of Released Data, and a BOJ Meeting
January 31, 2017
President Trump sacked Acting Attorney General Sally Yates late last night, who had refused to enforce his selective immigration ban, and replaced her with Dana Boente. The firing stirred recollections of Nixon firing of Eliot Richardson and Bill Ruckelshaus when they wouldn’t fire Watergate Special Prosecutor Archibald Cox in October 1973. In other U.S. political […] More
New Overnight Developments Abroad - Daily Update
U.S. Restraints on Immigration Rattle Markets
January 30, 2017
Numerous Asian markets from China to South Korea, Taiwan, Singapore, Malaysia, and Hong Kong were closed for the Lunar New Year (of the Rooster). There’s been an uproar over President Trumps executive orders concerning immigration banning visitors from many Islamic countries but conspicuously not Saudi Arabia. Stocks fell 0.5% overnight in Japan, 0.9% in Australia, […] More
Foreign Exchange Insights and Next Week
Next Week
January 27, 2017
Central Banks: The first of eight scheduled FOMC meetings is on Tuesday and Wednesday and will not be associated with a published Summary of Economic Projections or a press conference by Chair Yellen. A policy meeting at the Bank of Japan on Monday-Tuesday will be associated with a released “Outlook” including revised macroeconomic forecast and a […] More
New Overnight Developments Abroad - Daily Update
A Week to Remember
January 27, 2017
It’s been a memorable first week of the Trump presidency. He will be meeting today with British Prime Minister Theresa May, who hopes to make giant strides in securing a bilateral trade accord between the two countries. Mexican President Nieto cancelled his trip to Washington amid mounting tensions over immigration, trade, and who pays for […] More
Foreign Exchange Insights and Next Week
Is a Revival of U.S. Currency Market Intervention Coming?
January 26, 2017
I suspect it is. Foreign exchange intervention used to be a key tool of monetary policy, wherein countries buy or sell their own currency in the marketplace against a different widely traded currency. As such, FX operations are like the open market operations used to guide banking reserves and domestic monetary policy, but there’s a […] More
Central Bank Watch
National Bank of Ukraine
January 26, 2017
The Ukrainian central bank interest rate was left unchanged at 14%. The same action was taken at the prior policy meeting in early December. A sharp decline of CPI inflation from 43.3% in 2015 to 12.4% last year had enabled officials to lower the interest rate from 30% in at the start of August 2015 […] More
New Overnight Developments Abroad - Daily Update
Dollar Bounces Higher
January 26, 2017
The dollar recovered 0.8% overnight against the yen and and is up 0.4% relative to the Canadian, Australian and New Zealand dollars. The greenback rose 0.2% versus the euro but slipped 0.2% against the Swissie. The yuan is unchanged, and the Mexican peso rebounded 0.3% as President Nieto said his country will not pay for […] More
New Overnight Developments Abroad - Daily Update
Dollar Retreats but European Stocks Rise Strongly
January 25, 2017
The dollar fell 0.6% against sterling, 0.5% relative to the yen, 0.4% vis-a-vis the loonie and kiwi and 0.3% against the euro, Swiss franc, yuan and Mexican peso. Yesterday’s tightening of Turkish monetary policy had a perverse effect on the lira, convincing investors that the currency is so vulnerable that more monetary restraint will be […] More
