Central Banks

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.

British High Court will rule today on whether the government can begin the formal process of leaving the European Union without a vote in parliament.

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.

The New Zealand Dollar (NZD) extended it's strong rally today following the Central Bank's announcement. NZDUSD rallied to 0.7143 in early trade.

ECB left its key interest rates unchanged, saying it was willing to leave the rates "at present or lower levels for an extended period of time.

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.

The negative outlook for growth and inflation in the US appears to have postponed the next rates hike.

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.