Forex Investment and Currency Trading

ECB clearly ups the hawkish ante…
While delivered with a French accent, this week’s press statement had a decidedly Germanic tone with its clear hawkish leanings redolent of ECB Council uber hawks Weber and Liebscher. The opening paragraph contained a clear threat of higher rates via the insertion of notes that “…inflation is now expected to remain high for a more protracted period than previously thought”, the Bank is “in a state of heightened alertness” and that it will prevent the emergence of second round effects by “acting in a firm and timely manner”. More
tellingly, meanwhile, was the removal of the [...]

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Trichet toughened the language another notch in the opening sentence., referring to “heightened alertness” and he dropped the sentence that “we believe that the current monetary policy stance will continue to achieve our objective”
I think this is just one step off a pre-announcement of a rate hike now.
The new ECB staff inflation forecast has a mid-point of 3.4% this year, followed by 2.4% next year (as expected) - and assuming that there’ll be NO second round effects.  The market sees upside risk, which has further increased since last month.  The ECB staff sees GDP growth at 1.8% this year and 1.5% [...]

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On all reasonable measures, the euro has been an outstanding success. Upon its 10-year anniversary, the ECB can celebrate a remarkable record. While the ECB has kept home-grown inflation tightly under control, the region has enjoyed a major rise in employment amid a series of structural reforms. New challenges are ahead. But the record suggests that the Eurozone can cope with these new challenges as well.
As the European Central Bank celebrates its 10-year anniversary on June 1, the bankers as well as the politicians who founded the ECB can look back at a remarkable decade. By any reasonable measure, the [...]

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Dollar strength across the board, yet aussie and kiwi still holding up quite well with employment numbers out of both countries this evening (645pm NZ release, 930 AU). With inflation pressures continuing to rise, in particular RBA’s commodity index which was up 10.6% last month, employment data and wage pressures will be a key concern for both central banks. With the vix now breaking the December lows keep an eye on the 16 level for further confirmation and support for cross antipodes.
More cause for concern out of the BOE this morning as manufacturing data weakens. Odds of a cut has [...]

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