Interest-rate futures demonstrate that the traders are certain the Fed will increase its benchmark to 4.75 percent on March 28, and predict about a 65 percent chance of another increase to 5 percent at the May meeting. However the outlook was not the same say in October 2005 when Fed was expected to go in for graduated dosages of increase in interest rate in keeping with the trend began since June 2004. The dollar had then risen 2.3 percent against the yen since the end of June 2005. The dollar ran its third straight quarterly gain, reported in October 2005, against the yen, the longest winning streak since 2001, as the Federal Reserve stuck to its policy of ''measured" increases in interest rates. The markets had then expected the dollar to rally to about 115 yens. The yield advantage of 10-year US Treasury notes with Japan had averaged 2.87 percentage points in 2005 year and reached as much as 3.27 percentage points on March 28 2005. As a result of these Japanese investors were buying the dollar to purchase overseas assets, such as Treasuries strengthening interest in dollar.
The dollar declined for a fourth day against the yen after a report showing slower-than- expected inflation eased speculation that the Federal Reserve will raise interest rates more than twice this year. The dollar has fallen more than 1.8 percent versus the yen the week ending Mar 16, the biggest drops since the week ended Jan…
Both the Keynes’ and the White’s plans give much proof the experiences of the interwar period have been analyzed in great detail. Both recognize the need to control short-term capital movements and to a degree to drift away from the hypothesis of a free exchange system.
The European Central Bank (ECB) is responsible in managing the monetary aspects pertaining to the Euro. The currency was floated with an aim to integrate European states politically and economically. A single currency facilitates trade across the European Union eliminating currency exchange costs; it also protects the area from the external economic shocks such as turbulence in the currency markets and crude oil prices.
6, after reports showed a record deficit in the U.S. current account and retail sales declined. Market opinions are afloat that we might be in a period of dollar weakness as present US data is supporting the notion the Fed will go only about one or two more times for increasing the interest rates' .This quite overlooks the fact that the Fed has raised its benchmark overnight lending rate 14 times since June 2004 to 4.5 percent from 1 percent, to prevent the economic expansion from overheating.
In today's market scenario, there is a tendency to control the forex market by both the current traders of the currency in addition to those who are trading in the futures market. Looking back at the 1931 devaluation of the pound, there is a large scale market pressure based on the fundamentals of the pound sterling against the dollar's market fundamentals (Marsh & Hallwood, Aug 2003).
Companies may resort to mergers and acquisitions because they provide an inorganic route to expansion. Any such transaction makes good strategic sense for at least one of the companies involved in the deal. However there is nothing to
Krugman, like a number of U.S. legislators have called for higher tariffs for Chinese goods as a response to the failure of Chinese authorities to reevaluate their currency.
But the question is: Is the Renminbi
There was also the competition from other countries that made investors start companies abroad, and that affected the yen. The article also explains how the rise of the dollar has made things all over the world expensive.