currency wars

What to Make of Three Helter Skelter Weeks that Felt Like a Year

January 21, 2016

Central bankers tend to be cautious and not prone to scrapping a forecast on the basis of a couple of difficult weeks when developments haven’t jived with baseline assumptions.  But there was the ECB President today declaring that “downside risks have increased again and citing a trio of causes — increased uncertainty surrounding emerging markets, […] More

Currency Wars

May 9, 2013

Two themes are dominating currency market life.  One is disinflation.  A funny thing happened on the way to the widely predicted explosion of inflation that market players feared would be the result of fiscal deficit spending and rapid growth in central bank balance sheets.  Inflation rates have instead decelerated and been negative in a few […] More

Currency Words

February 7, 2013

Currency market participants spend considerable time waiting for uncertain areas of interest to become better clarified.  By the time that happens, other mysteries overtake investor psychology, and the market moves on to another issue.  At this moment, attention has been captured by the attempt of several governments to manipulate exchange rates in the hope of […] More

Dovish Tones in Bank of England and Fed Reports

October 20, 2010

It has become gospel in central banking circles that important policy changes must be communicated clearly in advance in order to produce desired market reactions.  Minutes from the Bank of England’s October 6-7 meeting and the Fed’s report on regional economic conditions, known as the Beige Book, constitute an education of the public to anticipate […] More

Previews: Swedish Riksbank and Bank of Canada

October 18, 2010

Monetary policymakers are holding their penultimate interest rate meetings of 2010 this week and will be announcing their decisions on Tuesday.  Each of these banks has begun to normalize interest rates, but neither is likely to extend that process at this time.  Sweden’s repo rate will hold at 0.75%, and Canada’s overnight money rate should […] More

Seeking a Greater IMF Role in Arbitrating Currency Disputes

October 11, 2010

Talks among officials attending the World Bank/IMF meetings in Washington failed to forge a consensus to the current multiplicity of purported currency misalignments and the role of government policies in preventing market adjustments that would promote less imbalanced current accounts.  In the absence of shared interests, nations will submit the issue to the IMF for […] More

Dollar Winning the Currency Wars

October 8, 2010

A strong correlation exists between currency expectations and recent forex movements.  Market players like to run in herds.  The dollar at 15:15 GMT today had recorded across-the-board losses for the first week of October.  Declines over the past four weeks had built up to 8.8% against the euro, 5.9% relative to the Australian dollar, 5.7% […] More

Softer Commodity-Sensitive Currencies and Equities Ahead of U.S. Labor Survey

October 8, 2010

The dollar rose 1.0% and 0.7% against the Australian and New Zealand dollars and shows gains of 0.3% against the euro and 0.2% versus the loonie.  The dollar is steady against the yen and sterling but down by 0.3% against the yuan after Chinese markets opened for the first time this week.  U.S. Treasury markets […] More

North American GDP and Unemployment

September 30, 2010

Canada and the United States released subdued GDP figures today. Canadian July GDP slipped 0.1%.  Although negative growth in July had been expected, this was the first decline in eleven months, and weakness was pervasive.  Manufacturing and construction respectively contracted by 0.7% and 0.5%.  Energy, utilities, retail and wholesale turnover fell by 0.6%, 0.4%, 0.5% […] More