Currency Markets in the News

Widest Differential Between U.S. and Euroland Manufacturing PMIs in Over Two Years

November 2, 2009

The U.S. manufacturing purchasing managers index jumped 3.1 points last month, about eight times more than projected and to its best reading since July 2007.  The increase was also more than twice as big a point gain as experienced by the euro area manufacturing PMI.  As a consequence, the spread between the two indices widened […] More

No Significant Surprises From Bank of Japan

October 30, 2009

The Bank of Japan promised to leave its uncollateralized interest rate at 0.1% “for some time” but took initial steps to rein in quantitative easing.  The decisions after four hours of deliberation were unanimous on the rate but included a dissent from Mizuno regarding the planned phase-out of unconventional steps to facilitate corporate financing. The […] More

Bank of Japan Preview

October 29, 2009

Japan’s central bank Policy Board has three orders of business to decide at Friday’s meeting. The uncollateralized overnight money rate target has been 0.1% since last December and is unlikely to get raised for a couple of more calendar quarters.  Although Japan is coming out of recession, the economic outlook is fraught with risks, and […] More

Economic Recovery in the U.S., Euroland, Japan, and Britain

October 29, 2009

The data from major advanced economies continues to inspire less hope than what China and other developing economies are reporting. Aspects of the 3.5% rise of U.S. GDP last quarter look too good to last.  Slightly over two-thirds of the increase resulted from consumption of durable goods (much of which reflects the expired cash for […] More

Anxiety Over The Euro's Strength

October 27, 2009

An editorial in the Tuesday Financial Times pushes the view that worries about euro appreciation are “overdone” and makes several credible points.  Consumers benefit from cheaper import prices.  Much of the region’s external trade is with one another, where exchange rate exposure has been eliminated by the common currency.  It’s not such a bad thing […] More

Euro Area Industrial Production

October 14, 2009

Industrial output rebounded at a 9.8% annualized rate in Euroland during the middle third of 2009, that is over the four months between April and August, yet production was still 15.4% lower in August than a year earlier in August 2008.  That’s because production plunged at annualized rates of 32.1% in the final third of […] More

Bank of Japan: No Changes Yet

October 14, 2009

After meeting for seven hours and nine minutes over two days, the Policy Board of the Bank of Japan voted unanimously again to retain a 0.1% target for the uncollateralized overnight call money rate.  This rate target first fell to as low as 0.5% in September 1995 and has never exceeded that level in the […] More

ECB Press Conference Review: Nothing Very Illuminating

October 8, 2009

After holding an off-site meeting in Venice, the ECB Governing Council left its key interest rates unchanged, with a 1.0% refinancing rate surrounded by a deposit rate of 0.25% and a marginal lending rate of 1.75%.  Those levels have been in place since May 7.  From exactly a year ago to the final cut of […] More

ECB Preview: No Changes Anticipated

October 7, 2009

The ECB will not modify its 1.0% refinancing rate tomorrow.  The policy announcement is due at 11:45 GMT.  325 bps of reduction were squeezed into seven moves, beginning exactly one year ago and ending with a 25-bp cut on May 7.  I expect ECB President Trichet to reiterate that the present stance is “appropriate” and […] More

U.S. and Euroland Posted Identical Service Sector PMI Readings in September

October 5, 2009

Activity in non-manufacturing improved more sharply in the United States last month than in Euroland, completely closing a 1.5 point PMI disadvantage from August.  The average PMI-services spread over the first eight months of 2009 had amounted to +0.5 points.  The September story in manufacturing had been the opposite, with the euro area index increasing […] More