| | | How the Rest of World Reads the Fed | | All eyes focused this week on the Federal Reserve Bank, as the market already had discounted at least two rate cuts by the end of this year. Despite signs of weakening economic growth and low inflation, Chairman Jerome Powell had previously insisted that the weak U.S. inflation was 'transitory' and refused to cut rates. During this week's policy meeting, however, the Fed at last cited 'uncertainties' in the economy, opening the door to easing for the first time in more than a decade. The U.S. dollar in general weakened on this headline. | | While the next questions are when and by how much the Fed will cut rates, other central banks around the world have already reacted even before this week's Fed announcement. | | In Europe, with no signs of inflation hitting its target, the European Central Bank has become more nervous. Last week, ECB President Mario Draghi said that an additional stimulus such as asset purchases (quantitative easing) may be needed, putting pressure the euro and Eastern European currencies such as the Hungarian forint, Czech koruna and Poland zloty. | | Watch the video | | If we can help you with any Foreign Exchange needs, please email foreignexchange@cnb.com or call (800) 447‑4133. | | Want to learn more about international finance, economics, and global events? Sign up for our other Foreign Exchange emails and videos! | | | | | | | Follow City National Bank on social media: | | | | | | Non-deposit investment products: | | • | Are not FDIC insured, | | • | Are not deposits or other obligations of City National Bank and are not guaranteed by City National Bank, and | | • | Are subject to investment risks, including possible loss of the principal invested. | | | | | This report is for general information and education only and was compiled from data and sources believed to be reliable. City National Bank does not warrant that it is accurate or complete. Opinions expressed and estimates or projections given are those of the authors as of the date of the report with no obligation to update or notify of inaccuracy or change. This report is not a recommendation or an offer or solicitation to buy or sell any financial instrument discussed. It is not specific investment advice. Financial instruments discussed may not be suitable for the reader. Readers must make independent investment decisions based on their own investment objectives and financial situations. Prices and financial instruments discussed are subject to change without notice. Instruments denominated in a foreign currency are subject to exchange rate and other risks. City National Bank (and its clients or associated persons) may engage in transactions inconsistent with this report and may buy from or sell to clients or others the financial instruments discussed on a principal basis. Past performance is not an indication of future results. This report may not be reproduced, distributed or further published by any person without the written consent of City National Bank. Please cite source when quoting. | | | | | | |
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