Tag Archives: FOMC

Swiss Franc For us the developments in the trade balance express if a currency is overvalued or not (more details here). The Swiss trade surplus is constant or rather rising, hence the Swiss Franc is correctly valued or rather undervalued.And – as we see below – the franc appreciated. Switzerland Trade Balance(see more posts on Switzerland Trade Balance, )Switzerland Trade Balance – click to enlarge. FX Rates...

Summary: Bernanke reviews the changes in the long-term dot plots. There as been a clear trend toward lower long-term growth, unemployment and Fed funds equilibrium. The full adjustment may not be over. Former Fed Chair Bernanke keeps a blog at Brookings.   His latest post offers insight into how to think about Federal Reserve, and in particular, Fed officials’ understanding of the US economy. Bernanke’s...

[clear] [follow_author user=dorgang position=right text="Introduction by"] Summary: Fed upgraded its assessment of the economy. Added that the downside risks to the economy have diminished. Only George dissents.   The Federal Reserve met market expectations fully.  It upgraded its assessment of the economy, recognized...

Summary: The Fed’s nervousness in June has likely largely eased on the back of better economic data and stable international climate. The Fed may reintroduce its risk assessment. Who are the possible dissents? The Federal Reserve’s two-day meeting concludes tomorrow.  There is little doubt that it will stand pat.  There is not press conference afterward, so the statement is the only thing investors will get....

Summary: FOMC statement will not likely close door on September hike, though economists are more inclined for a December move. There is great uncertainty surrounding the BOJ’s outlook. We suspect odds favor tweaking assets being purchased rather than cutting rates further or dramatically increasing JPY80 trillion balance sheet expansion. European bank stress test results due at the end of the week. Contrary to...

Through the first part of the year, the swinging pendulum of expectations for the trajectory of Fed policy has been a major driver in the foreign exchange market.  This is true even though the ECB and BOJ continue to ease monetary policy aggressively.   The Australian and New Zealand dollars appear to influenced more by the shifting view of Fed policy than the expectations in some quarter that the RBA and RBNZ could cut interest rates as early as this week.   Indeed, anticipation of Fed...

The US dollar bottomed against nearly all the major currencies on May 3.  The hawkish April FOMC minutes that began swaying opinion about the prospects for a summer rate hike were not published until two weeks later, and the confirmation by NY Fed President Dudley was not until May 19.  Nevertheless, the shift in expectations for a resumption of the Fed’s gradual normalization of monetary policy is a potent force that has fueled the greenback’s recovery.  The place to look for investors’...

The US dollar bottomed against nearly all the major currencies on May 3.  The hawkish April FOMC minutes that began swaying opinion about the prospects for a summer rate hike were not published until two weeks later, and the confirmation by NY Fed President Dudley was not until May 19.  Nevertheless, the shift in expectations for a resumption of the Fed’s gradual normalization of monetary policy is a potent force that has fueled the greenback’s recovery.  The place to look for investors’...

The US dollar’s weakness in recent months, despite negative interest rates in Europe and Japan likely had many contributing factors.  These factors include shifting views of Fed policy, weaker US growth, the recovery in commodity prices, including oil, gold and iron ore, and market positioning.  A new phase began in late-April/early May.  The dramatic rally in iron prices reversed, and the Australian dollar, bottomed against the US dollar in mid-January, seemingly to anticipate the...

The foreign exchange market is largely quiet as the market awaits fresh trading incentives and the FOMC statement later in the North American session.  The main exception to the consolidative tone is the Australian dollar, which is posting its largest loss (~1.7%) in a couple of months. The short-term market was caught the wrong-footed when Australia reported an unexpected decline in Q1 CPI.  The 0.2% decline contrasts to expectations for an increase of the same magnitude.  The...