Submitted Apr 14, 2011|From forexblog.oanda.com

With all the information about the Japanese problems, Chinese monetary tightening, Euro-zone debt debacle has investors confused and/or lacking confidence. It’s no wonder we have these tight non-directional trading ranges with some liquidity vacuum ...

Submitted Apr 13, 2011|From forexblog.oanda.com|1 comment

Despite all the event and geopolitical concerns, there remains a healthy tolerance for risk in the market. Investors believe that the EUR is less exposed to a decline in risk appetite. Trichet and company’s hawkishness, mixed with the Fed’s dovish ...

Submitted Apr 11, 2011|From forexblog.oanda.com

Last year, the Bank of Canada implemented two quarter point interest rate increases in the second half of the year to lift Canada?s benchmark Bank Rate to one percent. Since then, Governor Mark Carney has said on several occasions that further rate ...

Submitted Apr 8, 2011|From forexblog.oanda.com

The Market got what it wanted this week when it came to Central Bank announcements. The RBA, BoJ, BoE and ECB all remain mindful of inflation. The ECB it seems has begun its rate normalization policy by tightening +25bp. Their actions will provide ...

Submitted Apr 8, 2011|From forexblog.oanda.com

Trichet going ‘one-and-done’ is not cutting it. Refusing to pre-commit to a steady series of aggressive rate increases is to be expected. If the ECB were to begin rate normalization, it would provide greater directionality in FX for investors. A ...

Submitted Apr 7, 2011|From forexblog.oanda.com

It’s all about the language, Trichet’s communique, not this morning’s ‘expected’ hike. The market has already priced in the ECB hiking its repo rate +25bp to +1.25%. Investors need guidance and should be focusing on the press conference to decipher ...

Submitted Apr 6, 2011|From forexblog.oanda.com

The Organization of Economic Co-operation and Development (OECD) said Tuesday that it expects Canada will lead all G7 countries in economic growth for the first half of 2011. According to the OECD, the Canadian economy will expand by about 5.2 ...

Submitted Apr 6, 2011|From forexblog.oanda.com|1 comment

The EUR has shrugged off a Portuguese downgrade, a Chinese rate hike and is now focusing on Trichet’s expected ‘progressive normalization’ of monetary policy. Tomorrow’s anticipated hike will mark the first significant policy divergence in the G10 ...

Submitted Apr 5, 2011|From forexblog.oanda.com|2 comments

The European Central Bank is facing a true dilemma with its upcoming interest rate vote. On the one hand, the Bank is cognizant of the rising rate of inflation in certain economies comprising the 17-member Eurozone of countries, while on the other, ...

Submitted Apr 5, 2011|From forexblog.oanda.com

The market remains nervous. The reaction to Bernanke’s ‘neutral’ comments indicates that the market is aggressively short dollars. Last night he said that inflation was rising and must be carefully monitored. He believes the spike to be ...

Submitted Apr 4, 2011|From forexblog.oanda.com|1 comment

This weeks main event will be the ECB rate decision. Has Trichet telegraphed this hike decision or is that too easy? The EUR price action supported by FED Dudley dovish comments certainly has priced this scenario in and investors are ready to add to ...

Submitted Apr 1, 2011|From forexblog.oanda.com

The month-end, quarter-end ‘fix mess’ is now over. Welcome to the beginning of the ‘carry’ month. Carry is king in April. Non-farm payrolls did not bring forth ‘that’ surprise. The dollar has suffered whiplash this week on the back of Fed member ...

Submitted Apr 1, 2011|From forexblog.oanda.com

The Bank of England has held the benchmark bank rate at 0.5 percent for the past two years but as rising prices continue to erode the buying power of the pound, pressure builds on the Bank to hike rates. The minutes of the last Monetary Policy ...

Submitted Mar 31, 2011|From forexblog.oanda.com

No one seems to be fazed by the crisis in Portugal or the Irish stress tests. After this mornings Eurozone’s flash inflation print (+2.6%), more than ever, the market expects the ECB to start the rate normalization process on April 7. In reality, ...

Submitted Mar 30, 2011|From forexblog.oanda.com

Wednesday’s employment report provided further evidence that the U.S. labor market is gaining strength. According to the monthly report published by payroll services firm ADP, another 210,000 jobs were created in March marking the sixth straight ...

Submitted Mar 30, 2011|From forexblog.oanda.com

The more hawkish rhetoric we are exposed to the higher US yields want to go. It seems to be Fed Bullard and Fisher’s new ‘vocation’, spread the hawkish gospel. This pick up is supporting the dollar especially against the CHF and JPY and not so much ...

Submitted Mar 29, 2011|From forexblog.oanda.com

Which hawk can shout the loudest? It seems that investors are comfortable pushing European debt problems to the back burner and accept Trichet’s anti-inflationary drum beating. The market is confidently pricing in higher rates by the ECB next week. ...

Submitted Mar 28, 2011|From forexblog.oanda.com

he last case of stagflation in the U.S. happened in the early 1970s. With the economy drifting listlessly, a severe shock was applied in the form of an oil shortage imposed by OPEC’s infamous embargo in 1973 – retaliation against the U.S. for ...

Submitted Mar 28, 2011|From forexblog.oanda.com

The market started out being caught flat footed in Asian and ended up with the dollar only making some small gains overnight. Even with the EUR building up a plethora of negative reasons to want to hold the currency short term, the market continues ...

Submitted Mar 27, 2011|From irishtimes.com

THE EUROPEAN Central Bank (ECB) is working on an emergency plan to deepen its support for Ireland’s ailing financial system with a new scheme to provide banks with more than €60 billion in medium-term “liquidity” loans. The initiative, which is ...