To all FF readers, this is a must see.
"For the first 3 and a half months that have already elapsed in 2016, no asset class has seen the consistent volatility that currencies have. Central banking has been busy, almost too busy, all while the macro fundamental landscape has hardly moved an inch. With all that drama, noise, and play in monetary policies throughout the global economy, one would expect sizable trends in FX. But that hasn't been the case."
Read more: http://www.businessoffinance.com/ins...-in-currencies
Chart details:
These charts perfectly explain the unorthodox phenomenon we have been experiencing with regards to how currencies have reacted to central bank monetary policy. The cases are in points below:
"For the first 3 and a half months that have already elapsed in 2016, no asset class has seen the consistent volatility that currencies have. Central banking has been busy, almost too busy, all while the macro fundamental landscape has hardly moved an inch. With all that drama, noise, and play in monetary policies throughout the global economy, one would expect sizable trends in FX. But that hasn't been the case."
Read more: http://www.businessoffinance.com/ins...-in-currencies
Chart details:
These charts perfectly explain the unorthodox phenomenon we have been experiencing with regards to how currencies have reacted to central bank monetary policy. The cases are in points below:
- The ECB (Eurozone) increased the size of its PSPP (QE) to 80bn a month and further lowered interest rates earlier in March. Despite this clearly dovish ECB policy, the euro is much stronger since.
- The BoJ (Japan) took interest rates below zero for the first time ever in January this year, an extreme policy stance for any central bank. Despite this extremely dovish course of action, the yen is very much stronger since.
- The Norges Bank (Norway) most recently cut interest rates to 0.5% from 0.75%, and even warned of further cuts in the future. Despite this clearly dovish policy, the krone is notable stronger since.
Charts by Business Of Finance