Forex Investment and Currency Trading

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 [...]

[Read more →]

Eurozone The advance PMI for April showed a slight gain for the composite index, which edged up to 51.9 from 51.8 in March. This resulted from opposing trends in services and manufacturing, as services rose to 51.8 from 51.6 in the previous month, while manufacturing fell to 50.8 from 52.0 in March. Germany’s readings remained stronger than the Euro area’s, but showed a similar tendency between the two macro sectors, with services rising to 54.6 from 51.8 and manufacturing falling to 53.6 from 55.1. Given that manufacturing is more exposed to international competition, one can read the drop in the [...]

[Read more →]

Brazil: The monetary policy committee (COPOM) hiked the overnight Selic target rate by 50bp to 11.75%. The move was a surprise to most analysts, where 25bp represented expectations. In a brief statement, COPOM clearly demonstrated a desire to be highly preemptive in its approach to restraining inflationary pressures. The decision was designed to “immediately carry out a relevant part of the adjustment of the interest rate” which would “contribute to an opportune lowering of the risk that designs the inflationary scene” and “ultimately reduce the magnitude of the total adjustment necessary.”
The decision to hike the Selic rate comes at a [...]

[Read more →]

Today the Monetary Authority of Singapore (MAS) announced a modest monetary tightening. In the twice yearly monetary policy statement (MPS) it maintained its FX stance of a “modest and gradual appreciation” of the Singapore dollar (SGD) nominal effective exchange rate (NEER) which had been “increased slightly” in the previous policy statement announcement in Oct-071. Also importantly, due to rising inflation risks, the central bank opted for a one-off re-centring of the SGD NEER policy band at the current level of the SGD NEER. The last time there was a re-centring was back in July-03, with the mid-point set at the [...]

[Read more →]