Lira has performed a record weakening after the central bank of Turkey cut its
one-week repo rate to 15% from 16%. USDTRY immediately soared to an all-time
high above the 11.00 level.
bank’s decision might seem to be astonishing, but it is in line with the
seemingly obvious moves that have been made amid pressure from Turkish
President Recep Tayyip Erdogan. Turkey is experiencing enormously high
inflation which is around 20%.
daunting GDP figures in the United States managed to cause the Dollar to slump
as the American economy added just 2%. This is compared to the expected 2.7%
and the amazing 6.7% in the Q2, 2021. This is quite a disappointing slowdown
that poses risks to the economic recovery of the largest economy in the world.
significant to point out that these
figures were released just ahead of the Federal Reserve’s (Fed) meeting on
November 2-3, that should decide on the gradual tapering schedule. Such fears
of the slowing down of the U.S.
Global economic growth
faced a serious sudden throttle with contradictory consequences, as high energy
prices were globally boosting inflation. Logically, low inflation was a serious
problem for economic growth in preCOVID-19 years, meaning low consumer and
investment demand hampered economic growth.
injections from the world’s major central banks, of which the Federal Reserve was
among the first to take action, reversed this trend to a large extent and
bailed countries out of economic turmoil.
September 23rd, the Bank of England (BoE) joined a relay race after
the U.S. Federal Reserve (Fed) had made its move towards monetary tightening.
The U.S. monetary policymaker clearly indicated that it is going to taper
quantitative easing before the end of this year.
The BoE did not point
to any additional monetary stimulus measures in its statement, as it kept its
interest rate unchanged at 0.1% together with the 895 –billion-pound ($1.23
billion) bond purchase program.
The paramount intrigue of the week is the results of the Jackson Hole conference run by the Federal Reserve (Fed) and the statement of its Chairman Jerome Powell that is going to take place on Friday. Financial markets are desperately waiting for the major Fed policymaker to announce further perspectives surrounding the monetary policy.
However, the Fed is in awkward situation as, on the one hand, it has clear signs of economic recovery with 6.6% GDP up in the second quarter of 2021, and above 6.4% in the first quarter of this year, together with the first estimate of Q2 GDP growth being 6.5%.
of this week, was expected to bring
about high volatility in the markets suddenly. But the truth of the matter is
that it is showing extreme fragility and uncertainty with price movements and
factors affecting it. Investors are trying to tune into any kind of signals
that would reflect the policy of the Federal Reserve (Fed). In fact, markets
are picking up some signals that were considered with low relevance before.
was suddenly interrupted by worse July unemployment data compiled by ADP.
Zealand Dollar, or just the Kiwi, according to the traders' slang term, could
become the second of the major currencies to strengthen on a systematic basis
after the Loonie, which is the Canadian Dollar. The last one has been embarking
on a healthy path since the third week of April when the central bank of the
country changed the size of the quantitative easing (QE) monetary program from
$4 billion to $3 billion loonies per week, thus partly compressing the growth
pace of the excessive money supply.
Pound is among the most prominent currencies that are seen to be benefiting from
the U.S. Dollar weakness in the end of July. And, there are several drivers that
seem to be pushing the Pound upside.
Dollar is consciously being pressured by the Federal Reserve (Fed) with its
loose monetary policy. The Fed and its Chair Jerome Powell reconfirmed recently
its commitment to continue quantitative easing policy with pumping as much as
$120 billion each month for an uncertain period of time.
that the single European currency has been laying on the side of risky assets over
recent months. All of these risky assets are currently standing against the
U.S. Dollar, which has been acting like a safe haven asset so far this year.
The dovish rhetoric of Federal Reserve’s (Fed) Chair Jerome Powell in the U.S.
Congress seems to be pressuring the Greenback while supporting the Euro.
Mr. Powell streamed
placidity despite shocking inflation figures in the United States that hit
As the U.S.
Federal Reserve’s (Fed) head Jerome Powell and Treasury Secretary Janet Yellen
are ready for two days of Congressional testimony, against a thrilling
background of another inflation spike in the American economy, the three major
New York stock indexes continue to consolidate tranquilly in the direct
neighbourhood of all-time highs. The U.S. consumer price index (CPI) set a
fresh record of 5.4% annual growth, with the so-called "core" CPI
excluding food and energy segments also hitting the 4.5% bar, which is an
absolute maximum of domestic price dynamics since 1991.