Archive for August 2022

Central Bank Watch

Central Bank of Turkey’s Policy Interest Rate Cut to 13% from 14%

August 18, 2022

Turkey has one of the world’s highest inflation rates. Consumer prices rose 79.6% in the twelve months through July, up from inflation of 19% a year earlier and 11.8% in the year ending July 2020. Turkey also has an autocratic leader, who believes that raising interest rates is a cause of inflation, not a solution […] More

Central Bank Watch

More Tightening at the Bank of Norway

August 18, 2022

In Norway, CPI inflation has climbed from 3.0% in July 2021 to a 34-year high of 6.8% last month. Core CPI inflation of 4.5% constitutes a record high. After the pandemic hit, officials had slashed Norway’s central bank policy rate from 1.50% to 0.50% between March and May of 2020. Rate normalization at the Bank […] More

Central Bank Watch

Rate Hike in the Philippines

August 18, 2022

The Filipino policy interest rate was increased by another 50 basis points to 3.75%. May had seen the first increase since November 2018, a hike of 25 basis points. Another 25-bp hike was agreed at the June central bank monetary board meeting, followed by a 75-basis point increase in July. The total increase of 175 […] More

New Overnight Developments Abroad - Daily Update

Central Banks See Little Alternative but to React to Elevated Inflation

August 18, 2022

The reinforcing cycle of high inflation and rising central bank interest rates has made a favorable environment for the dollar, which rose another 0.2% overnight against the yen, euro, yuan, peso and on a DXY weighted basis. The U.S. currency also climbed 0.4% versus the kiwi and 0.3% relative to the Swiss franc but is […] More

New Overnight Developments Abroad - Daily Update

Investors Spooked Ahead of Today’s FOMC Minutes, Not Reacting Immediately to Other Data

August 17, 2022

FOMC Minutes due at 14:00 EDT are expected to accentuate the primacy of restoring price stability even if that means a continuing rapid rise of interest rates amid a slowing economy. The dollar, which has done well in times when the mood has turned risk averse, advanced overnight by 1.2% against the Australian dollar, 0.9% […] More

New Overnight Developments Abroad - Daily Update

Dollar Extends Gains

August 16, 2022

In spite of some weak data, the dollar climbed another 0.3% overnight relative to the euro and on a DXY weighted basis. The greenback also strengthened 0.6% versus the yen, 0.8% vis-a-vis the kiwi, 0.4% against the Swiss franc and Australian dollar and 0.2% versus the peso, yuan, and sterling. U.S. equities had risen on […] More

New Overnight Developments Abroad - Daily Update

Dollar Up Amid Weaker-Than-Forecast Data Around the World

August 15, 2022

The weighted DXY dollar index is up 0.6% and near its overnight highs. Gains compared to Friday closing levels have been even higher relative to the Canadian dollar (1.0%), New Zealand dollar (1.3%), Australian dollar (1.2%) and Mexican peso (0.7%). The dollar has risen 0.6% vis-a-vis the euro, 0.5% versus sterling and 0.4%relative to the […] More

Foreign Exchange Insights and Next Week

Next Week’s Menu: August 13 – 19, 2022

August 12, 2022

Central Banks: Monetary policy stances will be reviewed in Norway, New Zealand, Turkey, Sri Lanka and the Philippines. Policy meeting minutes will be published by the Federal Reserve and Reserve Bank of Australia. Holiday: Indonesia’s Independence Day on Wednesday. Scheduled U.S. Economic Data Releases: Industrial production, capacity use, retail sales, housing starts, building permits, existing […] More

Central Bank Watch

Bank of Mexico Raises Key Interest Rate by 75 Basis Points

August 12, 2022

Officials at the Bank of Mexico by a unanimous vote agreed to lift their overnight interbank lending rate by 75 basis points to 8.5%, which matches the highest rate level since November 2005. From February 2020 through February 2021, the rate had been reduced 325 basis points in total to 4.0%, but rate increases that […] More

Central Bank Watch

Peruvian Central Bank Rate Hike

August 12, 2022

The Central Reserve Bank of Peru‘s policy interest rate was raised by another 50 basis points, bringing such to 6.5%. It has been increased by a half percentage point in each of the first eight months of 2022 as well as in each of the last four months of 2021. There was an initial 25-basis […] More

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