Currency Thoughts

Next Week

larrygreenberg — Fri, 30 Jul 2010 21:47:59 +0000

Central bank interest rate meetings are scheduled in Australia, the euro area, the U.K., Peru, Romania Indonesia and the Czech Republic, but none is expected to announce a change of policy. Canada will be closed for Civic Day on Monday. The first week of the month is naturally PMI week. Monday will see a parade [...]

Beware of August

larrygreenberg — Fri, 30 Jul 2010 18:37:04 +0000

The upcoming third anniversary of the financial crisis finds advanced economies deeper in debt, struggling to maintain traction, and without a consensus over policy priorities. Confusion also exists over the next direction of major currencies. The dollar lost value against most currencies during July in a pattern that persisted into the final days of the [...]

Weaker Stocks and Euro Ahead of U.S. 2Q GDP Release

larrygreenberg — Fri, 30 Jul 2010 11:30:07 +0000

The dollar has climbed 0.6% against the euro but fallen 0.7% against the yen. The greenback is stronger by 0.5% against the kiwi, 0.3% versus the Aussie dollar, and 0.2% relative to sterling. Dollar/Swiss is unchanged, and the yuan ticked up 0.1% against the U.S. currency. The loonie is 0.2% higher. Stocks in the Pacific [...]

Note on U.S. Growth

larrygreenberg — Thu, 29 Jul 2010 17:00:26 +0000

The Federal Reserve Beige Book gave a somber snapshot of the state of activity in June and early July. The pace of activity slowed in the Fed districts of Atlanta and Chicago, stalled in the Kansas City and Cleveland districts, and and was modestly positive but not picking up further in other areas. However competitive [...]

Dollar Softer Across the Board

larrygreenberg — Thu, 29 Jul 2010 11:25:56 +0000

Overnight the dollar lost 1.2% against the Swiss franc, 1.1% against the Australian dollar, 0.7% against the Canadian dollar and euro, 0.5% against the yen, 0.3% relative to sterling and 0.2% against the kiwi. The dollar even dipped 0.03% against the yuan. The Japanese Nikkei lost 0.6%, and stocks dipped 0.2% in South Korea and [...]

New Zealand Central Bank Rate Raised But Statement Signals Greater Caution

larrygreenberg — Wed, 28 Jul 2010 21:47:59 +0000

The Reserve Bank of New Zealand has implemented a second 25-basis point rate increase. The first was announced June 10, and today’s lifts the rate to 3.0%. The central bank’s statement was less hawkish than June’s communique. Growth had been called broad-based seven weeks ago, but in contrast considerable discussion this time is spend on “subdued [...]

How Low Will the Euro Go By End-2010?

larrygreenberg — Wed, 28 Jul 2010 16:53:38 +0000

The euro presently shows a 10% net year-to-date decline against the dollar. At its low of $1.1878 in early June, the euro had dropped by 17.0% since the end of 2009. I do not expect the euro to be weaker than that June level on December 31. Some analysts are more bearish on the euro [...]

Weaker Aussie and New Zealand Dollars

larrygreenberg — Wed, 28 Jul 2010 10:53:09 +0000

The U.S. dollar advanced 1.0% and 0.7% against its Australian and New Zealand counterparts but was pretty steady otherwise. The Greenback dipped 0.3% against the loonie, 0.2% relative to the Swissy and yen, and 0.1% against the euro. The dollar rose 0.1% against sterling and is again unchanged versus the yuan. Stocks rose sharply overnight [...]

Footprint of Deflation in Major Advanced Economies

larrygreenberg — Tue, 27 Jul 2010 16:39:05 +0000

The fear of future inflation has ushered in an age of austerity even as prospects for sustained economic recovery among major advanced nations face substantial and unusual uncertainty. It is feared that government deficits, which ballooned in response to a drop in tax revenues caused by the deep recession, will be monetized away by central [...]

Monetary Policy Tightened Again in India

larrygreenberg — Tue, 27 Jul 2010 11:50:27 +0000

The Reserve Bank of India raised interest rates for the second time this month, lifting its key borrowing repo rate by an as-expected 25 basis points to 5.75% but ratcheting its reverse repo rate up by an unexpectedly large 50 basis points to 4.5% in hopes of enticing commercial banks to keep more funds at [...]