currencies

This was the first 25 bp move in the current cycle and was less than expected, as market expectations had been for 50 bp earlier this month but swung more towards 25 bp this past week on more dovish signals from officials. Of 58 analysts…

We are seeing divergent inflation paths in Brazil and Mexico, and today’s mid-April data underscored this point.

Analyzing official China comments in order to make a currency call is a fool’s errand. However, suffice it to say that all of these comments suggest a reduced patience for the status quo and an increased willingness to recalibrate China FX…

Given S&P's decision to downgrade the U.S. credit rating to outlook negative, it bears remembering how we got here. I think the key word is deleveraging.

. If China’s current account surplus declines, there are, very broadly, two ways this can affect the US. On the one hand the surplus can simply be transferred to another country. For example if China’s current account surplus declines…

China data came in stronger than expected, and supports the view that PBOC is moving behind the curve with its gradualist approach and that it needs to get more aggressive. Q1 11 GDP growth slowed slightly to 9.7% y/y from 9.8% y/y in Q4…

We saw that Joseph Stiglitz proposes a new reserve currency to alleviate pressure on trade imbalances. Michael Pettis is now also proposing a similar move away from the U.S. dollar. In an FT Op-Ed, Michael wrote that every generation we…

The euro zone periphery debt market has moved back into the fore, with Greece taking center stage again. While additional news flow out of the Ireland indicates that the Irish government is now considering the term “structured default” as a…

A sovereign nation that issues debt in its own fiat currency cannot default involuntarily. Again, this is the Ecuador risk factor, defaulting for purely political reasons, not because of the inability to pay. It is not clear whether there…

Victor Shih argues that Chinese FX reserves are vulnerable and that raising real interest rates are key to reducing the potential risk. Video and PDF presentation provided.