New Overnight Developments Abroad - Daily Update

Slackening Demand and Confidence But Persistently Red-Hot Inflation as Several Central Banks Unveil Latest Policy Decisions

July 21, 2022

The dollar was already lower when the European Central Bank announced a more aggressive rate hike than implied in previous forward guidance. That move pushed the dollar down further such that it currently shows net overnight drops of 0.9% against the euro and 0.6% against the DXY weighted index. By comparison, the dollar is little […] More

Foreign Exchange Insights and Next Week

Dollar’s Enjoyed a Stellar First Half Without Typical Currency-Supportive Fundamentals

July 20, 2022

Since the end of 2021, the dollar has appreciated 11.7% against the euro and 20.2% against the yen. Those advances compare highly favorably with the dollar’s January 1 through June 30 movements in the years since the euro was launched in 1999. First-half changes against the euro in the previous six years included declines of […] More

New Overnight Developments Abroad - Daily Update

Elevated Price Data, Weak Consumer Confidence, and Changing Central Bank Rate Expectations

July 20, 2022

The dollar had retreated in recent sessions but has rebounded 0.3% so far today against the euro and versus the DXY weighted index. The dollar also strengthened overnight by 0.2% against the Swiss franc, Chinese yuan and Turkish lira and by 0.1% versus sterling. The yen and Aussie dollar are steady, and the greenback dropped […] More

New Overnight Developments Abroad - Daily Update

Corrective Dollar Move Extended

July 19, 2022

The weighted DXY dollar index slid another 0.8% overnight to a 2-week low and is 2.6% below its recent multi-decade peak. Dollar losses since Monday’s close equal or exceed 1.0% relative to the euro, Swiss franc, Australian dollar, New Zealand dollar and especially the Russian ruble (-5.8%). The dollar also lost 0.6% versus sterling and […] More

New Overnight Developments Abroad - Daily Update

Rebound of Appetite for Riskier Assets

July 18, 2022

Fed officials have pushed back against market speculation that the federal funds rate will be lifted by more than 75 basis points this month. They apparently are hopeful that the dip in the price of oil under $100 per barrel and some evidence of tempered price expectations might be a sign of inflation peaking. Similar […] More

New Overnight Developments Abroad - Daily Update

Spotlight on China Where GDP Contracted by Greater-than-Forecast 2.6% Last Quarter

July 15, 2022

Unlike any other country, China’s government treats Covid with no mercy, and so when the highly contagious subvariant emerged in March, officials resorted to aggressive lockdown tactics to stamp it out, regardless of economic cost. The 2.6% quarter-on-quarter slide was about a percentage point more than expected and the most since 10.5% plunge in the […] More

Deeper Analysis

Front-Page Graph of U.S. CPI Inflation in Today’s NYT Illustrates Big Difference in Current Spike from the 1970s Experience

July 14, 2022

It’s a difference noted before in this blog. The inflation that former Fed Chairman Volcker eventually slew was felt in three, each larger than the previous one and altogether encompassing fifteen years. The first wave from CPI inflation of a half-percent to a peak around 6% played out over five years. Inflation then receded back […] More

Foreign Exchange Insights and Next Week

Next Week’s Menu: July 16 – 22, 2022

July 14, 2022

Central Banks: Monetary policy reviews are scheduled next week at the European Central Bank and Bank of Japan and in China, Indonesia, Russia, Turkey, South Africa and Brazil. Central Bankers speaking publicly in the period include ECB President Lagarde, BOJ Governor Kuroda, and Reserve Bank of Australia Governor Lowe. The Bank of Japan’s quarterly Outlook […] More

Central Bank Watch

Filipino Central Bank Rate Hike

July 14, 2022

Officials at the Central Bank of the Philippines had not scheduled a policy review for today. But with Filipino CPI inflation jumping 0.7 percentage points to 6.1% in June, a 92-month high and over 2 percentage points above the target corridor of 2-4%, they felt they could not delay intensifying the monetary tightening cycle any […] More

Central Bank Watch

Central Bank of Chile Rate Hike

July 14, 2022

Chilean monetary officials had cut their interest rate twice in March 2020 by a total of 125 basis points to 0.50% but began to raise the rate in July 2021 and did so in four moves by a total of 350 basis points by December. Yesterday’s unanimously decided increase to 9.75% from 9.0% was the […] More

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