Forex Investment and Currency Trading

South Africa Private sector credit growth unexpectedly rose by 22.6% yoy in March after 20.8%, well above market expectations for 20.5%. M3 money supply also rose to 21.0% yoy from downward revised 20.9% (consensus 20.7%). Following SARB Governor’s recent hawkish comments, an emergency rate hike cannot be ruled out given the sharp deterioration in inflation development. Market sees a 50bp rate hike likely in the run up to the prescheduled June 12 meeting, unless the ZAR recovers strongly – a function of improved international market sentiment.
Hungary March PPI was on the strong side of expectations, advancing to 5.7% yoy after 4.9% [...]

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The BoT’s quarterly Inflation Report (IR) released on April 22 reinforced the view that the scope for rate cuts is limited by the already accommodative monetary conditions and rising inflationary pressure. In
fact, market sees increased prospects for BoT to raise the benchmark repo rate in 2H08 on growing concerns over price stability. In addition, concerns over political stability will likely limit THB gains in the near term.
Increased scope for rate hikes in 2H08
While Governor Tarisa signaling a growth accommodative bias during the annual policy outlook briefing on January 28 was widely seen as a precursor to rate cuts, the April IR [...]

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FOMC Cuts the Fed Funds Rate by 25bps and Leaves Neutral Bias

The FOMC cut the fed funds rate by 25bps to 2%. Discount rate was cut by 25bps also, to 2.25%
The vote was 8-2, with dissent from Fed Presidents Fisher and Plosser.
The statement highlighted ongoing weakness in the economy but left out any mention of forward looking action.

As widely expected the FOMC cut the fed funds rate by 25bps to 2% today. The vote was close but there were two dissenters similar to the last meeting. They were Dallas Fed President Fisher and Philadelphia Fed President Plosser, both noted inflation [...]

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Eurozone Wednesday’s data releases confirmed that April has seen a significant decline in business and consumer confidence, while inflation surprised on the downside compared to initial expectations. According to the European Commission index, the business climate index declined to 0.44 in April from a downward revised 0.79 in March. Consumer confidence was unchanged at -12. The overall economic confidence index fell to 97.1 from 99.6. As for inflation, the Euro area HICP inflation rate was 3.3% yoy, down from 3.6% in March. Country-specific data show that inflation fell most sharply in Germany, but it also declined in Spain, Belgium and [...]

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