Currency Thoughts

Next Week

larrygreenberg — Fri, 27 Jan 2012 22:53:59 +0000

The week that binds January and February, like others that bridge adjacent months, has a crowded data release calendar plus such key events as the Florida primary, an EU leaders summit in Brussels, and testimony from Fed Chairman Bernanke before the House Budget Committee. It is hoped that a Greek personal sector involvement deal will [...]

Significant and Two-Sided Currency Market Risk

larrygreenberg — Fri, 27 Jan 2012 19:00:44 +0000

Since the start of the financial crisis in 2007, analysts have hedged forecasts of growth and inflation with the caveat that extraordinarily high uncertainty creates the potential for outcomes both well above or well below baseline predicted paths. An analogous truth should hold for key currency pairs over the next month or two. Investors late [...]

A Distressful U.S. GDP Report

larrygreenberg — Fri, 27 Jan 2012 15:41:34 +0000

Real GDP advanced 2.8% last quarter annualized (saar) but only 0.8% factoring out the boost from inventory accumulation. GDP was 1.6% higher than in 4Q10 and posted five-year expansion of merely 0.5% per annum between 2006 and 2011. Nominal GDP rose just 3.2% saar last quarter, down from 4.4% in the third quarter. The GDP [...]

Still Watching Greece and Waiting for U.S. GDP Data

larrygreenberg — Fri, 27 Jan 2012 12:35:22 +0000

The dollar has softened overnight by 0.6% versus the yen, 0.5% against the Australian dollar, 0.4% versus the kiwi, 0.3% relative to the euro, and 0.2% against the loonie, Swissie, and sterling. The Chinese market remained closed one more day for the Lunar New Year holiday but will reopen on Monday. Stocks in the Pacific [...]

U.S. Economic Performance Under Obama and Bush43

larrygreenberg — Thu, 26 Jan 2012 18:44:55 +0000

With the 2012 U.S. presidential campaign heating up, traffic has risen noticeably to an article on this site that was posted in August 2008, which compared growth, inflation, and the performance of share prices, the dollar, and job creation under different presidencies since the Kennedy administration. Some of the figures upon which that original study [...]

Markets Pumped by Fed Decision and Greek PSI Rumor

larrygreenberg — Thu, 26 Jan 2012 12:35:58 +0000

There is a stronger risk appetite today. The euro touched a 5-week high of $1.3176 and is 0.3% stronger on balance. The dollar has also slipped 0.6% relative to the Australian dollar, 0.5% versus the kiwi, 0.4% against the Swiss franc, 0.3% versus the loonie, 0.2% against the yen and 0.1% vis-a-vis sterling. The German [...]

Reserve Bank of New Zealand: No Change for Seventh Straight Meeting

larrygreenberg — Thu, 26 Jan 2012 01:48:36 +0000

New Zealand’s 2.5% Official Cash Rate (OCR) has been retained. This continues to match the cyclical low maintained from April 2009 until June 2010. The OCR was raised by 25 basis points each in June and July 2010 but cut by 50 bps in March of 2011. A statement from the central bank cites "well-contained [...]

Significant New Information Conveyed at the Bernanke News Conference

larrygreenberg — Wed, 25 Jan 2012 20:56:01 +0000

Before the start of today’s press conference, the FOMC had already managed to convey most of the really useful insights into Fed thinking, but a couple of great tips nonetheless were added by Chairman Bernanke. One should not look at the mean but rather the median of the scatter diagrams of predicted end-year levels of [...]

A Virtual Easing by the FOMC

larrygreenberg — Wed, 25 Jan 2012 18:53:17 +0000

The Federal Open Market Committee didn’t cut Federal funds rate because it’s already been near zero since late 2008. New quantitative easing wasn’t announced because the present round of Operation Twist still has five months to run. The third major policy tool after cutting interest rates and unconventional measures to increase liquidity and depress longer [...]

An FOMC Experiment in Transparency

larrygreenberg — Wed, 25 Jan 2012 16:24:46 +0000

Today is FOMC Day, and it will be like none before it and Federal Reserve officials elevate policy communication to new levels. A typical FOMC statement will be published at 12:30 EST (17:30 GMT), and Chairman Bernanke begins a one-hour press conference at 14:15 EST (19:15 GMT). New macroeconomic forecasts are scheduled for 4Q12, 4Q13, [...]