Foreign Exchange Insights and Next Week
Next Week
May 18, 2018
Central Banks: Monetary policy reviews in South Africa, Ukraine, South Korea and Hungary. FOMC minutes to be published. Powell, Harker, Evans, Dudley, Kaplan, Bostic and Kashkari of the Fed speak publicly. So will Reserve Bank of Australia Governor Lowe. Holidays and Events: Whit Monday in Switzerland, France and Germany. Victoria Day on Monday in Canada. […] More
New Overnight Developments Abroad - Daily Update
Some Price Data and a Discouraging Remark from China
May 18, 2018
The dollar firmed overnight by 0.3% against sterling, 0.2% versus the yuan, yen and euro, and 0.1% relative to the loonie. The greenback fell 0.5% against the kiwi and 0.1% vis-a-vis the Swiss franc and is unchanged relative to the Australian dollar and peso. Share prices in the Pacific Rim climbed 1.2% in China, 0.6% […] More
Deeper Analysis
Italy’s Pre-Maastricht Days
May 17, 2018
A headline in today’s Financial Times reads “Italy’s populists pine for pre-euro times.” The recently established Five Star party and the right-wing League have been trying to form a government, and they have been openly considering desired measures to modify their relationship with other members of the European Monetary Union. The Maastricht Treaty signed in […] More
Central Bank Watch
Bank of Mexico
May 17, 2018
The Governing Board of the Bank of Mexico agreed unanimously not to raise the 7.5% overnight interbank rate further at this time. Higher inflation driven by peso depreciation driven by hostile U.S. policies toward Mexico has compelled the central bank authorities to adopt a prudent monetary policy. Starting with a 25-basis point rate hike in […] More
Central Bank Watch
Bank Indonesia Tightens Monetary Policy For First Time Since Late 2014
May 17, 2018
Like their Brazilian colleagues late yesterday, monetary policymakers in Indonesia were compelled by recent foreign exchange market developments, namely the strength of the dollar and depreciation of emerging market currencies like the real and rupiah, to shift policy gears. In Brazil’s case, a long string of interest rate cuts was ended, and in the Indonesian […] More
Central Bank Watch
Central Bank of Brazil Breaks Streak of Interest Rate Cuts
May 17, 2018
Brazil’s key Selic interest rate had been reduced by a total of 725 basis points since October 2016, and Copom, the policy-making committee of the central bank, had not anticipated halting the easing cycle this soon when it previously deliberated in March. But by a unanimous 9-0 vote, officials agreed to leave the Selic rate […] More
New Overnight Developments Abroad - Daily Update
Little Change Overnight in Most Dollar Forex Values
May 17, 2018
Against other major currencies, the dollar is unchanged against the loonie and yuan, up 0.1% relative to the euro, Swiss franc and kiwi, up 0.3% versus the yen, but down by 0.1% against the Australian dollar and sterling. Bigger dollar moves have occurred against emerging market currencies. The greenback dropped 0.3% against the Indonesian rupiah […] More
Central Bank Watch
National Bank of Poland
May 16, 2018
A 1.5% central bank reference interest rate will continue to be flanked by a 0.5% deposit rate and a 2.5% lombard rate. In a released statement, officials note “persistently low domestic inflationary pressure across many countries” and predict that Polish inflation will likely stay near its target pace through the monetary policy transmission horizon. On-year GDP […] More
Central Bank Watch
Central Bank of Iceland
May 16, 2018
Iceland’s Monetary Policy Committee agreed to leave its 7-day term deposit rate at 4.25%. It’s been at that level since a 25-basis point cut last October versus 5.0% at the end of 2016 and 5.75% at the end of 2015. According to a released statement, the monetary stance is tight and appropriately so in order […] More
Central Bank Watch
Bank of Thailand’s Policy Rate Left Unchanged at 1.50%
May 16, 2018
A released statement by the Monetary Policy Committee defends the appropriateness of an accommodative policy stance. Although the economy continues to gain traction, external risks persist. A positive output gap is diminishing, but it will be some time before sub-target inflation rises to its desired level. Core inflation is rising only slowly. Officials promise to monitor […] More
