Archive for the ‘Interest rates’ Category

Australia’s dollar rose to a one-month high and bond yields rebounded from the lowest ever as the central bank refrained from cutting interest rates.

The Reserve Bank of Australia left the benchmark rate at a record-low 1.75 percent, as forecast by all but one economist surveyed by news agency Bloomberg. Most expect the central bank to resume easing in August after a quarter-point reduction in May in response to a record-low core inflation reading.

“Last night’s RBA policy statement was judged as lacking an explicit easing bias,” said Jane Foley, a senior currency strategist at Rabobank International in London. “While this assessment has lent the Australian dollar significant support this morning, there are sufficient negative nuances contained within the RBA’s policy outlook to infer that the prospect of an August rate cut remain very strong.”

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The Colombian peso weakened on Tuesday (31/5) after the country’s central bank announced it would suspend an intervention policy aimed at slowing the currency’s decline.

The central bank said on Friday (27/5) it would not hold any additional dollar option sales, but did not fully rule out further intervention.

The bank also increased its benchmark interest rate for a ninth consecutive month on Friday, to 7.25 per cent, confirming the expectations of most analysts in a Reuters poll.

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The latest round of online forex trading news highlights the continued fact that traders are adopting a “watch and wait” approach in terms of any significant movements. Part of the reason for this strategy is that there is relatively little data expected to be released over the next few days.

If anything, the details which have emerged are far from promising. Once again, economic figures released from China have echoed weakness while the recent sell-off in oil (regardless of short-term technical gains) highlights that markets are still in a sluggish position.
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A considerable amount of attention by online Forex traders has centred around the relationship between the United States dollar and the euro. There continues to be a significant amount of speculation in regards to the monetary strategies employed by the Federal Reserve in relation to the actions of the ECB.

In particular, surprisingly robust employment figures out of the United States have hinted that the Fed may hike interest rates in December.
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The Australian dollar has been weakening as a result of falling oil prices. “Jawboning” or the false market commentary has also been blamed to be partially responsible for AUD weakening.

The currency is under pressure with predications that the Aussie Reserve Bank will lower interest rates in response to other central bank decreases and lesser inflation expectations.

The cuts are contagious – currencies are weakened. Central banks in Mexico and South Africa are to release policy decisions and Mexico’s central bank is keeping policy rates on hold.
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A consensus of almost fifty economic experts predicts that Britain will show a growth rate that exceeds the rest of the G7 nations in the coming quarters, but the Bank of England is in no rush to increase interest rates, which might slow the rate of recovery.

The poll agrees with online Forex trading positions that the Bank of England will hold interest rates until the second quarter of 2015, raising them then by 25 base points, with a further increase of the same magnitude in the third quarter.
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An optimistic quarterly inflation report from the Bank of England on Wednesday saw Sterling surge on the Forex markets, with well-placed online traders taking good advantage of the announcement.

The Bank’s Governor, Mark Carney, commented that economic recovery was taking hold in the UK and the Bank’s projections for growth were moving forward, with next year’s annual growth expected to reach 2.8%, up 0.3% from the projection made in August.
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One of the biggest pieces of news to impact the online forex trading community this week has been the announcement that the latest US job figures are not as high as was hoped for.

Despite a range of measures having been put in place by President Obama and his administration to try and improve the USA’s worrying job situation, the modest target of an extra 180,000 jobs was not met.
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The global currency markets accounts and balances are awaiting clearer prospects. This is due to the great concern of the now well-known Greek crisis. The crises has been temporarily mitigated by the cancellation of debts and new loans.

Greece in focus

In terms of international currencies, Greece is in focus. An agreement was signed on debts by private lenders and applies to investors holding government bonds. This has been possible since Greece decided (more…)

Comments from Norway’s central bank, Norges Bank, made gains for the Krone against Euro. “Key interest rates should be increased to a “more normal level”, according to Norges Bank.

Analysts expects gains in Norwegian interest rates

However, currency analysts expect Norway to increase interest rates earlier than previously (more…)

Norges Bank decided today to keep the key interest rate unchanged at 2 %, as expected by Bloomberg forecasts.

Governor Svein Gjedrem explain why:
“Recent developments in the Norwegian economy have been broadly in line with expectations. Activity is rising moderately. Inflation has slowed and is now below 2 per cent”.

Better global growth

Norges Bank find the global economic growth to be slightly stronger than expected. The outlook for Europe is now a bit better, while the growth of the US economy is more uncertain.

OnlineForex.net find it likely that Norway keep main interest rates unchanged at 2 % for another few months.

After a few days of discussions, many observers believe Tories and Liberal Democrats are forming a coalition government in United Kingdom. Currency analysts are now relieved that Gordon Brown seems to step down as Labours leader from September this year.

The new government are likely to cut borrowing sooner then a Labour government would and in general, it should do well for the economy and the british currency. Forex analysts already predict a hung parliment between conservatives and liberal democrats and they seem to like it – pound sterling rose by almost 1 % today. Interest rates (more…)

Swedish Riksbanken speech insisted that Sweden’s rate is planned to remain flat until autumn 2010. Ingves pointed out the risk of a potential real estate bubble if the current interest rate levels remains for a long period.

He continues: “We believe that interest rates will be significantly higher in a few years from now”. In 2011, the interest rates will probably go up sharply, from less than 1% to 3%. At least if we are to believe the current forecast from the Swedish Riksbank.

Why was the Swedish interest rates unchanged?

Everything indicates that the recovery in the economy continues, while inflation pressures continue to be low.

With the Riksbank’s inflation target of 2 percent and to simultaneously support the economic recovery of the Riksbank decided to leave the repo rate unchanged at 0.25 percent. (more…)