Currency Thoughts

Welcome to Summer

larrygreenberg — Thu, 23 May 2013 20:16:17 +0000

Wouldn’t it be nice for market participants and analysts if the matters which most influence currency valuation like future monetary policy changes could be laid out in black and white terms without qualifications or two-way causation and feed-back loops? In such a world, policymaking could be planned a year or more in advance. One would [...]

South African Reserve Bank’s Repo Rate Left Unchanged at 5.0%

larrygreenberg — Thu, 23 May 2013 15:03:47 +0000

South Africa has a fragile economy, and growth prospects are sufficiently lackluster to prompt monetary officials to revise its forecasts downward to 2.4% this year and an average pace of around 3% in 2013-14. That said, room does not presently exist to cut the 5.0% repo rate because of A depreciating rand and the risk [...]

Disastrous Day for Share Prices in Asia and Europe

larrygreenberg — Thu, 23 May 2013 12:07:51 +0000

Japan’s Nikkei-225 index plunged 7.3%, the most for any single session since March 15, 2011 and the second greatest daily drop since October 24, 2008. Elsewhere in the Pacific Rim, stocks fell by 2.5% in Hong Kong, 2.0% in Australia, 1.9% in Taiwan and India, 1.8% in Singapore, 1.7% in Indonesia, 1.3% in China, 1.2% [...]

FOMC

larrygreenberg — Wed, 22 May 2013 18:10:18 +0000

Part I: Bernanke Testimony before the Joint Economic Congressional Committee Chairman Bernanke didn’t say anything startling or out of character, but world financial markets swayed to and fro depending on then nuances of the language of his answers and whether such implied reductions in monthly asset purchases happening sooner and by larger increments or the [...]

Bank of Japan: Steady as She Goes

larrygreenberg — Wed, 22 May 2013 16:21:36 +0000

Following a meeting lasting five hours and 28 minutes over two days, the nine-person BOJ Policy Board released a statement that did not break fresh ground. Radical changes were introduced as a “qualitative and quantitative” sea-change on April 4th at the first meeting of the new leadership team. This was the second subsequent meeting, and [...]

A Busy Day

larrygreenberg — Wed, 22 May 2013 11:33:46 +0000

Many things are happening today. One spotlight is on central banks. The BOJ did not change policy of aggressive quantitative easing. The economic assessment was upgraded, but market players are somewhat disappointed that no concrete modifications were announced to stop the erratic yet sharply rising trend in JGB yields, which have roughly doubled since early [...]

Weaker Yen and Pound

larrygreenberg — Tue, 21 May 2013 13:17:42 +0000

A day after suggesting the yen had fallen enough, Japanese Economics Minister Amari retreated, claiming no one really knows how far the yen’s downward correction will go. Sterling fell in response to lower-than-forecast British inflation in April. The lower inflation drops, the greater becomes the Bank of England’s leeway to stimulate growth if that is [...]

Focus on Japan, Not Europe

larrygreenberg — Mon, 20 May 2013 11:08:10 +0000

European trading was dampened by the observance in countries such as France, Austria, Norway, Denmark and Germany of Whit Monday, a Christian holiday. Its been a very light day from the standpoint of released European data. Canada will be observing Victoria Day. Remarks from Japanese Economics Minister Amari caught investors’ attention. He suggested the bulk [...]

Next Week

larrygreenberg — Sat, 18 May 2013 14:36:17 +0000

There is not a heavy calendar of central bank meetings next week. The Bank of Japan and South African Reserve Bank are two of the few. However, the top officials of the Fed, ECB, Bank of Japan, Bank of England, and Bank of Canada each speak publicly. Draghi and Kuroda of the ECB and BOJ [...]

The Disinflation Story: More Evidence

larrygreenberg — Fri, 17 May 2013 15:53:31 +0000

This article updates an earlier blog entry posted two weeks ago. The latest exhibit of global disinflation comes from Canadian April consumer price data released today. On-year total inflation in Canada of 0.4% was sharply less than the 2.0% 12-month increase in the year to April 2012. Excluding food and energy, consumer prices advanced 0.7%, [...]