Foreign Exchange Insights and Next Week
Next Week’s Menu: February 1-7, 2025
January 31, 2025
Central Banks: Monetary policy reviews at the Bank of England, Bank of Iceland, Czech National Bank, National Bank of Poland, Bank of Mexico, and Reserve Bank of India. A summary of the most recent Bank of Japan Board meeting and the Bank of England’s quarterly Monetary Policy Report will be published. BOE Governor Bailey and […] More
Central Bank Watch
Central Bank of Argentina Interest Rate Cut to 39% from 42%
January 31, 2025
The Central Bank of Argentina’s policy interest rate has been reduced another 300 basis points following a similar cut in December, a five percentage point reduction in November and a combined 60 percentage points of easing in the first half of last year. At 39%, the new rate level is down from 126% reached for […] More
New Overnight Developments Abroad - Daily Update
Dollar and Equities Up on Day Before Threatened Tariff Hike
January 31, 2025
The dollar rose overnight by 0.8% against the Mexican peso, 0.4% relative to the yen and won, 0.2% vis-a-vis the Chinese yuan, and 0.1% versus the euro and sterling. Stock markets remained on holiday in China, Taiwan and Hong Kong but rose 1.4% in Singapore. Major European equity indices are up modestly, and U.S. stock […] More
Central Bank Watch
25-Basis Point Interest Rate Cut at the South African Reserve Bank
January 30, 2025
South Africa’s policy interest rate, as expected, was cut today. The reduction to 7.50% from 7.75% was by the same increment as the previous and first cut done at November’s policy review. Previously, the interest rate had crested and stayed at 8.0% from June 2023 until this past November. The South African Reserve Bank targets […] More
Central Bank Watch
25-Basis Point Cut in European Central Bank Interest Rates
January 30, 2025
As was expected, the Governing Council of the European Central Bank undertook a fifth interest rate cut, and its size was 25 basis points. The cutting edge deposit rate was lowered to 2.75% versus 4.0% prior to last June’s initial reduction. A released explanation of today’s move again stressed that there is not predetermined schedule […] More
Central Bank Watch
Brazilian Selic Interest Rate Hiked to 13.25% from 12.25%
January 30, 2025
The Central Bank of Brazil’s Selic interest rate was hiked by another full percentage point, matching the increase made at December’s meeting and bringing the cumulative rise since September to 275 basis points. At 13.25%, the new rate level is its highest since August 2023 and just 50 basis points below the cyclical peak of […] More
New Overnight Developments Abroad - Daily Update
Central Banks and Data Storm Vie for Investors’ Attention
January 30, 2025
The dollar fell 0.8% against the yen overnight but has barely moved against other major currencies in the wake of the FOMC meeting that left the federal funds target unchanged at 4.25-4.50%. Fed Chairman Powell said monetary policy and the U.S. economy are in a good place and that there is no urgency therefore to […] More
Central Bank Watch
FOMC Statement and Press Conference
January 29, 2025
As expected, there was no change made in the 4.25-4.50% federal funds rate target, and balance sheet reduction will continue as previously indicated. Several tweeks were made to the FOMC’s characterization of U.S. economic trends: December’s statement called unemployment stabilized at a low level; this month joblessness is said to have move up but remains […] More
Central Bank Watch
FOMC Preview: U.S. Vital Market Levels Now Versus Those at Earlier FOMC Meetings
January 29, 2025
The federal funds target was cut at the previous three FOMC policy reviews in September, November, and December by a total of 100 basis points (or one percentage point) to 4.25-4.50%. Paradoxically, the 10-year U.S. Treasury yield over that span rose 86 basis points, including 18 bps since the December cut. Fed easing has also […] More
Central Bank Watch
Canadian Interest Rate Cut of 25 Basis points to 3.0% Meets Expectations
January 29, 2025
Today’s Bank of Canada interest rate cut was the sixth straight reduction since last June and brings the cumulative drop to two full percentage points, twice the amount of interest rate relief to date done by the Federal Reserve. The statement explaining today’s rate cut also announced the end of quantitative tightening and accompanied updated […] More
