It’s only the middle of the week but several central bankers have already affected their respective currencies’ price action just by making speeches.
1. Dovish: BOE’s Mark Carney
In an interview last Tuesday, Carney reiterated the Bank of England’s commitment to its forward guidance policy, saying that they’re unlikely to tighten monetary policy until they see “real” traction and momentum in the recovery. Looks like spotty economic improvements just ain’t cutting it anymore!
2. Hawkish: ECB’s Ewald Nowotny
Yesterday ECB Governing Council Member Nowotny said that an ECB interest rate cut would have a limited impact. What’s more, he also thinks that the central bank currently has no reason AND instrument to actively weaken the euro!
3. Dovish: BOC’s Stephen Poloz
As if dropping the BOC’s hawkish bias and lowering growth forecasts aren’t enough, Stephen Poloz stomped on the Loonie further last Tuesday when he also emphasized the slower-than-expected inflation growth.
He also said that the rotation of growth from consumer spending to exports and business investment has been slower to materialize than expected. And don’t even get him started on the impact of the U.S. government shutdown on the Canadian economy!
4. Hawkish: RBI’s Raghuram Rajan
Thanks to an uncomfortably fast inflation rate, the RBI had little choice but to bump up its rates. What’s making rupee traders more excited is that the RBI Governor doesn’t think that inflation will drop to its comfortable levels anytime soon. More rate hikes, anyone?
5. Dovish: RBA’s Glenn Stevens
Talk about market movers! A 10-minute speech was all RBA head Glenn Stevens needed to weaken the Aussie across the board. In his speech, he warned currency traders that the Aussie’s recent strength is coming from levels that are already “unusually high.“
He even added that it’s likely that in the future the Aussie will be “materially lower” than it is today as its strength is not supported by productivity in the economy. Duhn duhn duhn duhn!