The heads of four of the world’s most important central banks are squaring up to see who can wreak most damage on the currencies in their care.
Japan has been on something of a roll recently. That’s because the new prime minister, Shinzo Abe, has effectively promised to do what it takes to kick the Japanese economy out of its multi-decade slump. Investors in Japan have been disappointed in the past, but Abe has made some very convincing threats so far: he’s installed his own man at the Japanese central bank; he’s set a formal inflation target; and he’s warned the Bank of Japan that he’ll take away its independence if it doesn’t get its finger out.
The BoE has plenty of excuses for easing. Yesterday’s manufacturing data was disappointing. Meanwhile, lending to companies and consumers is falling too. The threat of a headline-grabbing, if somewhat irrelevant, ‘triple-dip’ recession hangs over the economy. More QE from the BoE would almost certainly hammer the pound.
ECB is unlikely to do anything as radical as actually cutting interest rates. That would irritate the Germans, and he’s got to keep them on side. There’s also a danger in allowing the euro to weaken too fast. You don’t want to give the impression that people are scared it might disintegrate after all.
FED Chairman Mr.Bernanke is expected to speak 14:30 GMT wihich again going to rattle markets but we are not expecting something unusual though nevertheless markets need reason.
For more info visit :www.cfb.ae
Japan has been on something of a roll recently. That’s because the new prime minister, Shinzo Abe, has effectively promised to do what it takes to kick the Japanese economy out of its multi-decade slump. Investors in Japan have been disappointed in the past, but Abe has made some very convincing threats so far: he’s installed his own man at the Japanese central bank; he’s set a formal inflation target; and he’s warned the Bank of Japan that he’ll take away its independence if it doesn’t get its finger out.
The BoE has plenty of excuses for easing. Yesterday’s manufacturing data was disappointing. Meanwhile, lending to companies and consumers is falling too. The threat of a headline-grabbing, if somewhat irrelevant, ‘triple-dip’ recession hangs over the economy. More QE from the BoE would almost certainly hammer the pound.
ECB is unlikely to do anything as radical as actually cutting interest rates. That would irritate the Germans, and he’s got to keep them on side. There’s also a danger in allowing the euro to weaken too fast. You don’t want to give the impression that people are scared it might disintegrate after all.
FED Chairman Mr.Bernanke is expected to speak 14:30 GMT wihich again going to rattle markets but we are not expecting something unusual though nevertheless markets need reason.
For more info visit :www.cfb.ae
No comments:
Post a Comment