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There are already many commentaries regarding Chairman Yellen's first Federal Reserve press conference. I simply want to highlight a point that will probably be overlooked: the heightened deflationary threat to the US. Consider the second paragraph from the Fed's policy announcement: Consistent with its statutory mandate, the Committee seeks to foster maximum employment and price stability. Read more
FX trade was very light in the lead up to the FOMC announcement, with major dollar pairings idling inside of familiar ranges. EUR-USD travelled a 1.3900-25 band, while USD-JPY traded 101.50-60. USD-CAD was bid up in early dealings, posting a 1.1199 peak, keeping 1.1200 barrier options intact. Read more
Sterling outperformed following solid U.K. data, the CNY sank to fresh lows, while the USD traded moderately firmer against most of the other main currencies, with most pairings remaining well within their respective Tuesday ranges. EUR-USD saw a low of 1.3904 before settling around 1.3920. Read more
The CNY made fresh lows while the USD majors posted inside ranges in uneventful trade as market participants sat on their collective hands ahead of the FOMC. The yuan dropped below 6.2000 for the first time since last April after the PBoC cut the reference rate to 6.1351, with the currency trading just over 1% below here, the biggest gap since 2007 (after the PBoC doubled the maximum daily trading band to 2% this week). Read more
The dollar was firmer versus the European majors in N.Y. trade on Tuesday, though lost modest ground to the yen. Equities rallied as Putin said he did not want to tangle with the West, and had no ambitions to invade the remainder of the Ukraine. Wall Street appeared to take him at his word, though oil rallied over $1/bbl, even as gold slipped back for the second day. Read more
With the situation in the Ukraine getting worse -- and with the threat of increased western economic sanctions against Russia an increasing possibility -- this appears to be a good time to take a look at the Russian economy to see if it could withstand increased trade problems. Read more
News that Russian parliament approved a draft bill on absorbing Crimea seemed to elicit a return to a more world-wary market sentiment. This saw the euro decline and the yen outperform. EUR-USD ebbed to the 1.3900 area during the European AM after flat-lining around 1.3903-40 in Asia. Read more
Another fairy subdued session. USD-JPY eked out a new rebound high of 101.94, but subsequently ebbed lower, toward the mid-101s. EUR-JPY also ebbed back while EUR-USD flat-lined around 1.3903-40. The AUD briefly lifted in the wake of the RBA minutes to the March policy meeting, which said that a stable period of interest rates is likely, backing up Westpac's well flagged decision yesterday to remove its call for the RBA to cut rates in 2014. Read more
The dollar traded lower in N.Y. on Monday, taking EUR-USD over 1.3940, cable toward 1.6660, and USD-CHF down to near 0.8720. It appeared that talk of a diplomatic settlement to the Ukraine issue is gaining traction, though so far, there have been no concrete developments that would imply any sort of solution is near. Read more
The USD has been mixed in early week trade, while the EUR has traded moderately softer on the view that U.S. and EU sanctions against Russia in the wake of the Crimea referendum may have negative implications for the Eurozone economy (cutting Russian natural gas imports, for instance). Read more
