Foreign Exchange Insights and Next Week
Next Week
January 12, 2018
Central Banks: Monetary policy meetings are scheduled in Canada, South Africa, South Korea and Indonesia. The Fed Beige Book of regional economic conditions and the Bank of Canada’s quarterly Monetary Policy Report will be published. Jordan of the Swiss National Bank, Coerce of the European Central Bank and Evans and Mester of the Fed speak […] More
New Overnight Developments Abroad - Daily Update
Dollar Slide Accelerates Against Several Key Currencies
January 12, 2018
The dollar dropped overnight by 0.9% against the euro, 0.7% relative to the yuan and sterling, and 0.5% versus the Swiss franc and Mexican peso. The catalyst for this accelerated decline was a tentative political plan in Germany between the center-right Christian Democrats and center-left Christian Socialists to form a new “grand coalition.” Those two […] More
Central Bank Watch
Central Reserve Bank of Peru
January 11, 2018
Peruvian Central Bank Board members continued the pattern of cutting their policy rate every other monthly meeting. As they had done in May, July, September, and November, officials cut such by 25 basis points, and the new level becomes 3.0%. A released statement projects a further near-term decline of CPI inflation and core inflation. Inflation […] More
Central Bank Watch
National Bank Serbia
January 11, 2018
Serbia’s central bank policy rate was lowered by 825 basis points from April 2013 though July 2016, but the executive board has implemented just a single 25-basis point cut in October 2017 to 3.5% during the subsequent year and a half. A released statement after the first policy review of 2018 notes that CPI inflation […] More
New Overnight Developments Abroad - Daily Update
Upbeat ECB Minutes Lift Euro
January 11, 2018
Minutes of the December ECB Governing Council meeting seem to proclaim the beginning of the end of the central bank’s ultra-easy stance. Quantitative settings were not changed, and a continuing determination to complete the current campaign of quantitative stimulus was projected. But the following paragraph initiates a coming shift in forward guidance. It was argued […] More
Central Bank Watch
Bank of Israel Maintains Status Quo
January 10, 2018
Having implemented three 25-basis point reductions per annum from 2011 to 2014 and one more 15-bp cut in February 2015, Israeli monetary officials have kept their central bank interest rate at 0.10% for almost three years. A released statement after their first policy review of 2018 observes that inflation is still under target, partly reflecting […] More
Central Bank Watch
National Bank of Poland Keeps Existing Policy Settings
January 10, 2018
A statement released by monetary officials after they left the 1.5% reference interest rate at 1.5% — it’s been at that level since March 2015 — predicts decent growth ahead but at a somewhat lower pace than in the second half of 2017 and CPI inflation near its target. Although wage growth has accelerated, core […] More
New Overnight Developments Abroad - Daily Update
Bond Market Slide Weighing on Dollar and Stocks
January 10, 2018
Rising long-term interest rates caused by growing optimism about global growth prospects is now depressing the dollar and stocks. The 10-year Treasury yield is 18 basis points above the end-2017 level just seven business days into 2018. Another Treasury market depressant has been an apparent Chinese decision to suspend purchases of U.S. government debt. The […] More
New Overnight Developments Abroad - Daily Update
Firmer Yen
January 9, 2018
The Japanese yen advanced 0.4% overnight against the dollar and by even more versus main European currencies. Investors reacted after the Bank of Japan bought fewer 10-year and longer JGBs in its operations today, which kindled suspicion the quantitative stimulus may be throttled back in 2018. The Japanese Nikkei-225 share price index climbed 0.6%, but […] More
Central Bank Watch
First Romanian Policy Interest Rate Hike since 2003
January 8, 2018
The first change of a key central bank interest rate was made by the National Bank of Romania, where the key policy rate, deposit facility rate, and lending facility rates were raised 25 basis points each to 2.0%, 1.0% and 3.0%. The policy interest rate had been at 1.75% since a 25-basis point reduction in […] More
