Central Banks

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The Bank of Canada is raising its target for the overnight rate to 1 per cent. The Bank Rate is correspondingly 1 1/4 per cent and the deposit rate is 3/4 per cent.

The Reserve Bank of Australia has kept its cash rate on hold at a record low of 1.5%.

"Our judgement has been that it was not in the public interest to encourage an already highly-indebted household sector to borrow even more," RBA governor Philip Lowe said.

The US dollar had been ralling ahead of Janet Yellen's speech on financial stability at Jackson Hole, 100 pips in USDJPY and EURUSD. HEr speech brought nothing new and dramatic and the dolalr sold off immediatly.

Federal Reserve Bank of Dallas President Robert Kaplan speaking on Inflation and labor gave color to Fed economists study Getting a Jump on Inflation was released. How technology and the U.S. debt level is impeding inflation.

The FOMC minutes from the last meeting in July underscore just how confused the majority of the Fed is about what inflation is not higher. The US dollar reacted negatively. Most Fed officials also support a balance sheet move at the next FOMC meeting.

The Bank of England (BOE) Monetary Policy Committee (MPC) left interest rates unchanged and QE on hold with a vote of 6-2 Thursday. The British pound fell 120 pips on the news.

Cleveland Fed President Loretta Mester commented on rates and inflation. These are interesting in light of the recent weak inflation numbers and the tumbling U.S. dollar, says 3 hikes a year appropriate.

The Reserve Bank has kept its cash rate on hold at a record low of 1.5%.

RBA Governor Philip Lowe said the recent increase in the Australian dollar above US80 cents was hurting job creation and economic activity.

On Tuesday the Federal Reserve's FOMC begins a two day meeting. On Wednesday at 2:00 p.m. ET there will a FOMC statement issued. The Fed is not expected to change interest rates but investors will be looking for more detail on its balance sheet and for further and inflation. 

The ECB left rates and QE on hold today and in President Draghi's ECB press conference he did his best to be dovish. Despite this the EURUSD Broke 14 month highs and the EURGBP broke highs since the Trump election. 

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