Forex Crunch » MPC

British QE Raised to £325 as Expected – GBP/USD Jumps

Yohay — Thu, 09 Feb 2012 12:03:04 +0000

The British Monetary Policy Committee decided to expand the Asset Purchase Facility by an additional 50 billion pounds to £325, as widely expected.

GBP/USD is jumping after the release, as an expansion of 75 billion pounds was also on the cards.

Read the rest of the article British QE Raised to £325 as Expected – GBP/USD Jumps

Robust US Recovery to Keep Fed Doves Low

Yohay — Wed, 25 Jan 2012 07:32:37 +0000

The composition of the Federal Reserve has undoubtedly changed in favor of the doves. However, the strong recovery in the US, and the already loose monetary policy will likely remain unchanged.

David Song of DailyFX discusses the Fed, China’s landing, Spain’s edge over Italy, Britain’s safe haven status and one currency which still has a potential, even after making big gains, in the interview below.

Read the rest of the article Robust US Recovery to Keep Fed Doves Low

The US economy is in no state to support the global community

Yohay — Wed, 30 Nov 2011 10:53:22 +0000

While recent indicators have been positive, the recent crisis in Europe is too strong for the world’s No. 1 economy. In the euro-zone, a rate cut seems likely, at least for easing the pressure for quantitative easing.

John Kicklighter of DailyFX discusses the crisis, the US economy, the status of safe haven currencies and more in the interview below.

Read the rest of the article The US economy is in no state to support the global community

Fed move meets with disappointment

Yohay — Thu, 22 Sep 2011 07:03:32 +0000

Last night, the US Fed decided to launch the much talked about ‘operation twist’, designed to push down longer-term interest rates by selling their short-dated holdings (less than 3 years) and investing in longer-dates bonds (6 to 30 years). Compared to what was expected, the market moved on from this around three weeks ago as many were looking for either QE3, or a strong indication that it was being considered. There were neither, which is why we’ve seen the dollar rise (on general risk aversion plays) and Asian stocks sell off.

The disappointment is also being registered in the typical risk plays, with the Aussie down nearly 2% since last night (AUD/USD flirting with parity) and the yen proving to be the more resilient on the majors. The intention is that borrowing costs are lowered for businesses and households, via the decline in longer-dated Treasury yields. This is no panacea though. The US ten year is already at 1.80%, so the downside is starting to look limited and short-term borrowing costs could well increase.

Read the rest of the article Fed move meets with disappointment

A potential life-raft for Greece

Yohay — Thu, 21 Jul 2011 07:45:48 +0000

As the single currency was preparing itself for another EU summit of disappointment, it seems that a rabbit may yet be pulled out of a hat. Few details are available on what was hammered out between France and Germany yesterday, but we should find out more today. Germany has said no further bail-out of Greece can occur without private sector bond-holders taking some of the pain, but up to now France had been standing firm, alongside the ECB, in insisting that Greece could not be allowed to default.

Even ahead of the meeting, there was talk of a eurozone bank tax, designed to raise up to EUR 50bn, which in turn would be used to fund a buy-back of Greek debt. There are a lot of details still to be thrashed out, not least the stance of the ECB which was reportedly present at yesterday’s meetings. The euro is a touch firmer on the news, but it remains to be seen if there is any life in the rabbit and even if there is, if it can run. Markets have experienced one too many false dawns when it comes to EU summits to jump the gun.

Read the rest of the article A potential life-raft for Greece

China shows more signs of slowdown

Yohay — Mon, 13 Jun 2011 07:58:11 +0000

It seems to be catching. Definitive signs of weaker growth in the US and a loss of growth momentum in Europe now seems to be extending across to China as well. In the first five months of 2011, new lending fell by 12% compared with the corresponding period of last year, and by 40% vis-a-vis 2009. Policy officials in China will be pleased – they have been raising reserve requirements and hiking rates for a while now in an endeavour to rein in rampant lending growth. In recent weeks, there has also been some evidence of slowing in production, although like the US this may reflect the difficulty some producers are having obtaining key parts from Japan. Asian equities are lower once again overnight, with the Shanghai Composite down another 1%, a loss of more than 12% in the last two months. Tonight China publishes key industrial production and inflation data – there has been a suggestion by some local commentators that inflation could have climbed to 6% last month, which against the backdrop of weakening growth will complicate the PBOC’s monetary policy task.

Guest post by FXPro

Read the rest of the article China shows more signs of slowdown

No Need to Worry About the US Debt Ceiling

Yohay — Thu, 28 Apr 2011 04:51:40 +0000

Which countries are the key to the European debt crisis? How far off is a rate hike in the UK? Which yen pairs are interesting to trade? Answers to all these questions and more are provided by quantitative analyst David Rodriguez.

David Rodriguez is a quantitative analyst for DailyFX.com, specializing in statistical studies in currency trading markets and algorithmic trading systems for the Managed Accounts Programs offered by parent company, FXCM. He holds a degree in Economics from Williams College with heavy emphasis on quantitative methods and began trading financial markets in the tech boom and bust of 1999-2001. Since then, David’s primary focus has shifted from equities to currency markets, but he continues to trade futures and futures options on a broad range of asset classes as well as currencies.

Read the rest of the article No Need to Worry About the US Debt Ceiling

GBP/USD Slips After Rate Decision

Yohay — Thu, 07 Apr 2011 11:02:35 +0000

The British MPC made no surprises and left the Official Bank Rate unchanged at the historic low of 0.50%. GBP/USD is marginally slipping lower within the high range.

There was a wide consensus that Mervyn King and his colleagues at the Bank of England would vote to leave the interest rate unchanged. The situation in Britain isn’t too good, especially in the manufacturing sector that printed two disappointments in the past weeks.

Read the rest of the article GBP/USD Slips After Rate Decision

G7 has all to play for

Yohay — Fri, 18 Mar 2011 09:43:42 +0000

Last night’s decision by the G7 to intervene to prevent the Japanese yen from strengthening is both intelligent and necessary. At a time when the major advanced economies are still concerned about the sustainability and durability of their recoveries (with the exception of Germany), Japan’s tragic misfortunes will undoubtedly hobble the economy for some time to come. As such, the 5% appreciation of the yen against most major currencies over the past week was merely compounding the post-disaster economic and financial misery the country is already experiencing.

Guest post by FxPro

Read the rest of the article G7 has all to play for

Sterling’s rate sensitivity

Yohay — Wed, 09 Feb 2011 11:54:09 +0000

So should the Bank of England be thinking about raising rates? This is the question that is going to be preoccupying sterling today and tomorrow as the Bank of England meets to discuss interest rates.

Guest post by FxPro

Read the rest of the article Sterling’s rate sensitivity