New Overnight Developments Abroad - Daily Update
Stronger Dollar and a Few Central Bank Policy Meetings
February 7, 2017
The theme of tightening Fed policy and looser U.S. fiscal policy returned to the fore, lifting the dollar overnight by 1.1% against the euro, 0.8% versus the Swiss franc, loonie and sterling, 0.6% relative to the yen, 0.5% against the Australian dollar, 0.4% versus the Mexican peso and 0.3% vis-a-vis the New Zealand dollar and […] More
Foreign Exchange Insights and Next Week
Intervention Not the Only Way to Secure a Weaker Dollar
February 6, 2017
A previous blog post on this site discussed how U.S. currency market intervention might get dragged out of the forgotten monetary tools closet as a way to depreciate the dollar by the new Trump administration. Both the president and his key adviser on trade have called the dollar overvalued. The dollar has strengthened broadly since the U.S. […] More
New Overnight Developments Abroad - Daily Update
Political Concerns Outweigh Data Strength
February 6, 2017
France’s National Front’s pre-presidential election manifesto was released, calling for France to leave the European Union and for tighter restraints on immigration. It was always a bit peculiar how an investment community prior to the U.S. election had been publicly worried about the Republican candidate’s “drain the swamp” promise but converted to true believers afterward. […] More
Deeper Analysis
Little Change in U.S. Non-Mfg or Euroland Service Sector PMI Readings
February 3, 2017
The Institute of Supply Management’s U.S. non-manufacturing purchasing managers index dipped 0.1 of a point to 56.5 in January as business activity and new orders grew less rapidly than in December but jobs and prices expanded at a faster pace. Euroland’s service sector PMI was unchanged at 54.4. The national readings for France, Ireland, and […] More
Central Bank Watch
Bank of Russia Retains a Moderately Tight Stance
February 3, 2017
The Bank of Russia’s key policy interest rate was slashed by six percentage points during the first seven months of 2015 and by 50 basis points each last June and September, but it has stayed at 10.0% for the past 4-1/2 months and will probably remain at that level at least through mid-2017. This week’s […] More
New Overnight Developments Abroad - Daily Update
U.S. Labor Statistics, Service-Sector PMIs, and a Focus on Some Central Banks
February 3, 2017
The dollar rose modestly overnight ahead of the U.S. jobs data, gaining 0.4% against the kiwi, 0.3% versus the yen, Swissie and sterling, 0.2% relative to the euro, loonie and Australian dollar, and 0.1% against the Mexican peso. China reopened after a week celebrating the Lunar New Year. The dollar fell 0.2% against the yuan, […] More
Central Bank Watch
Czech National Bank Keeps Existing Policy Stance
February 2, 2017
The Czech National Bank Board retained a 0.05% two-week repo rate, the prevailing level since November 2011, and recommitted to an asymmetric currency policy that since November 2012 has used the threat of intervention and actual koruna sales to keep the Czech currency from strengthening past 27 per euro. That commitment is set to be […] More
Central Bank Watch
Bank of England Keeps Existing Stance
February 2, 2017
At the second post-Brexit referendum meeting of the 9-person Monetary Policy Committee, officials halved the Bank Rate to 0.25%, expanded the asset purchase program by 60 billion pounds to a ceiling of GBP 435 billion, and introduced a plan to purchases up to GBP 10 billion of corporate bonds. Four subsequent meetings and two published […] More
New Overnight Developments Abroad - Daily Update
Dollar Falls Broadly Except Against Sterling
February 2, 2017
The dollar lost 1.2% against the Australian dollar, 0.8% relative to the euro, 0.7% vis-a-vis the yen, 0.5% versus the kiwi, 0.6% against the Mexican peso, 0.4% relative to the Swissie, and 0.3% versus the loonie. The Aussie dollar was lifted by report of a much greater-than-forecast A$ 3.51 billion Australian trade surplus in December, […] More
Central Bank Watch
Not Much to Discern from Latest FOMC Policy Statement
February 1, 2017
The FOMC document released today reads almost identically to the previous December statement when the federal funds target range was lifted 25 basis points to 0.50-0.75%. The range was not increased further today, and the decision, like December’s verdict, was unanimous by a 10-0 vote despite at changeover in the voting-privileged district presidents. At the December […] More
