Last Wednesday, Watchdog pointed out that the move through US$1.3000/EUR would set up euro gains towards US$1.3800/EUR. At US$1.3400/EUR, I wrote on www.businessmonitor.com that US$1.4900/EUR was a realistic possibility, as the dollar would come under renewed pressure due to Fed easing, in both conventional monetary policy and quantitative terms.

In fact the dollar has depreciated against [Read more...]

In case you’re wondering about the sarcasm in the title, I am paraphrasing Emperor Hirohito’s World War II surrender speech, when he said that ‘the war situation had developed not necessarily to Japan’s advantage’. That was, of course, the biggest understatement I can think of, but the yen’s ascent to a fresh 13-year high of [Read more...]

As pointed out last week, I believe that many sub-Saharan African countries will continue to struggle with double-digit inflation figures over the course of 2009, mainly on the back of currency depreciation, relatively robust real GDP growth and weak monetary policy transmission mechanisms. I should have mentioned though that South Africa is likely to represent [Read more...]

A thought. By now, the US Federal Reserve’s quantitative easing strategy is well underway, with the central bank pushing as much cash as possible into the hands of private commercial banks, hoping that they will then take the money and distribute it throughout the economy in the form of loans. Check out excess [Read more...]

Sure, Zimbabwe’s inflation has recently been estimated at 89.7 sextillion (that’s a one with 21 zeroes after it) percent, but given plummeting commodities and the global recession, surely inflation is going to turn the corner in the rest of Africa. After all, yours truly recently pointed out that deflation, rather than inflation, may now be [Read more...]

For all of those out there who have recognised that high inflation is so 2008, and with the risk of deflationary pressures mounting believe that no credible central bank – even in emerging markets – will consider raising interest rates, there may be an early Christmas treat. By that I don’t mean appealing high street [Read more...]

The big rally in gold over the past few market sessions has caught my eye. It has happened at a time of dollar stability, of increasingly deflationary news, including October’s negative month-on-month CPI reading from the US, and as other commodities have failed to gain traction. Thus, the near-20% move we have seen in bullion, [Read more...]