Bond Yields (And Their Relationship to FX)

One of the, if not the most pertinent indicators of price changes in financial markets are interest rates. This article will delve into this important relationship.

One of the, if not the most pertinent indicators of price changes in financial markets are interest rates. This article will delve into this important relationship.

NEW YORK: Robust US jobs data spurred investors to buy the US dollar and sell yen on Friday with the rosier economic report curtailing some expectations the US Federal Reserve will hold off raising interest rates until 2014.

Gold and silver sharply increased for the second straight day after the FOMC announced on Wednesday it will keep the interest rates low until late 2014.

Did the Fed meet the market’s expectations for greater accommodation? A forecast of virtually-zero interest rates through the end of 2014 does not have the same level of amperage that a wholesale asset purchasing program (long ago given the moniker ‘QE3’) would.

The dollar weakened and world stocks rose on Wednesday after the US Federal Reserve extended its pledge on maintaining interest rates at ultra-low levels until at least late 2014, much later than markets had expected.

The UK joined the exclusive club of countries that are able to raise money at negative interest rates. On the other hand, the deleveraging process has skipped this country, despite all the austerity

Sales of previously-owned homes accelerated for the third straight month in December as record-low mortgage interest rates, job growth and bargain home prices encouraged more median-income consumers to achieve their homeownership dreams.

As expected, the ECB decided not to touch interest rates at its meeting during the week. This makes a lot of sense in our eyes. The eurozone may be in recession, but it is only a mild one and should prove short-lived.

While voting unanimously to keep interest rates and QE as they are, The Bank of England warned of contagion in Europe and kept open the option of additional future QE measures…

Lower Australian interest rates combined with a rise in the US dollar as the euro sinks have dragged the Australian dollar below parity.