It’s hard to believe the holidays are here with so much action in the markets. We try to make sense of it all by understanding the different elements of the important Fed decision, the impact of oil prices various countries, a focus on Russia’s ruble, the resulting emergency SNB decision and the fate of the currency … “Yellen run down, oil running down, Russian run and the”
Month: December 2014
SNB Implements Negative Interest Rates, Franc Dips
The Swiss National Bank made a surprise move yesterday, implementing negative interest rates. The Swiss franc sank after the decision though trimmed its losses as of now. The SNB announced yesterday: The Swiss National Bank (SNB) is imposing an interest rate of â0.25% on sight deposit account balances at the SNB, with the aim of taking the three-month Libor into negative territory. It is thus expanding the target range for the three-month Libor to â0.75% … “SNB Implements Negative Interest Rates, Franc Dips”
Cheap oil good for consuming countries, but won’t help
Cheap oil is good for the economies of the US, Europe and Japan and the recent plunge in prices should support the USD, but for the EUR and JPY the dynamics are more nuanced. The interpretation many commentators are drawing from plunging oil and commodity prices is that the global economy is slowing and that … “Cheap oil good for consuming countries, but won’t help”
Euro Continues to Drop on Expectations of More Easing
There are expectations of more easing early in the coming year, and that is sending the euro lower today. Expectations that the ECB will have to take more steps to support the eurozone economy are being priced into the market right now. Years of austerity are taking their toll in the eurozone. While the austerity measures are meant to help eurozone countries get back on track with their balance sheets, the reality … “Euro Continues to Drop on Expectations of More Easing”
Glory Days for USD: Strength Set To Extend – Goldman
Goldman Sachs is certainly bullish on the US economy and the consequent US dollar strength. They see more “glory days” for the greenback and set targets for EUR/USD and USD/JPY: Here is their view, courtesy of eFXnews: In its last ‘Global Economics Weekly’ note for this year, Goldman Sachs makes the case for a stronger … “Glory Days for USD: Strength Set To Extend – Goldman”
CAD Ignores Negative Domestic Fundamentals, Unable to Outperform USD
The Canadian dollar soared today with the help of rising price for crude oil. This allowed the currency to ignore negative domestic macroeconomic data though it was unable to outperform the US dollar. Futures for crude oil, which were under strong selling pressure lately, caught market participants and analysts by surprise demonstrating a substantial rally today. It was beneficial for Canada’s economy, which relies on oil exports strongly, and consequently … “CAD Ignores Negative Domestic Fundamentals, Unable to Outperform USD”
Dollar’s Drop After FOMC Meeting Short-Lived
Today, the Federal Open Market Committee released its last monetary policy statement this year. The US dollar dipped after the release but the drop was short-lived as the currency rebounded quickly. The FOMC kept the phrase “considerable time” for describing the period of low interest rates, yet changed the wording so the language is now applied to the past statements. Regarding its current stance, the Committee said: Based on its current assessment, … “Dollar’s Drop After FOMC Meeting Short-Lived”
FOMC quick preview: what’s more important: employment or inflation?
The Fed convenes for the first time after QE ended and for the last time this year. This meeting consists of updated forecasts and a press conference. The focus is on the wording regarding the rate hike: will the Fed remove the “considerable time” phrase and pave the way for a rate hike? It depends on … “FOMC quick preview: what’s more important: employment or inflation?”
Ruble Gains with Support from Bank of Russia
The Russian ruble jumped as attempts of the Bank of Russia to stem the currency’s drop resulted in a success, at least for now. The central bank was selling dollar and pledged to help companies to meet their foreign-currency debt obligations. The Bank of Russia revealed measures it is going to take for stabilizing the financial sector. Among them, the central bank mentioned: In order to limit the impact of revaluation of assets and liabilities denominated in foreign currencies on prudential ratios of credit institutions, … “Ruble Gains with Support from Bank of Russia”
GBP Gains vs. EUR & JPY After BoE Minutes & Employment Data
The Great Britain pound dropped against the US dollar today but rose versus the euro and the Japanese yen. The minutes of the latest central bank’s policy meeting revealed that some policy makers want to raise interest rates. UK employment data was good, supporting the currency. The Bank of England minutes showed that the Monetary Policy Committee voted unanimously to keep the asset-purchase program at £375 billion. Yet the MPC members Martin … “GBP Gains vs. EUR & JPY After BoE Minutes & Employment Data”