With gold seen once more as a strategic asset, central bank buying has been steadily on the rise. One obvious reason is to diversify foreign exchange reserves away from US dollars.
Central banks across the world are scrambling to get on the crypto currency bandwagon. The US Federal Reserve, European Central Bank and the Bank of England have each suggested some form of venture into the world of crypto currencies and crypto payments.
Like the FED, the Bank of Japan (BoJ) left its monetary policy unchanged today, one week from the referendum on Brexit. The BoJ noted that Japan’s economy continued its moderate recovery.
a competitive devaluation, also known as a currency war, represents a situation in which a central bank decides to manipulate its currency to make it weaker in order to boost the competitiveness of its economy.
After the FED decided not to raise interest rates on the 27th of April, the USD continued to depreciate sharply until reaching a bottom level on May 3rd.
Because interest rates and the debt markets have such a significant effect in forex, it pays to keep a close eye on them. It isn’t enough just to wait for the announcements and guidance from central banks.