As of 2:06 am AST, a week that may see impeachment so far has no impact on currencies …

PairsFederal Reserve as of 8 January 2021OANDA as of 11 January 2021OANDA as of 13 January 2021 2:06 am AST
GBP/USD1.35831.35031.3588
USD/CAD1.26981.27691.2751
USD/CNH6.47506.47826.4582
USD/DKK6.06976.11156.1137
EUR/USD1.22521.21671.2165
USD/INR73.310073.409373.2619
USD/MXN19.941020.120319.9592
USD/JPY103.8900104.1600104.1100
USD/NOK8.40748.51598.5070
USD/SEK8.20858.28078.2834
USD/CHF0.88430.88920.8893
USD/BTC0.00000.0000
USD/ETH0.00090.0009
Sources: Federal Reserve, OANDA

House votes resolution asking Pence to use 25th amendment to remove Trump

Last night the U.S. House of Representatives passed the following House resolution in its attempts to remove President Donald Trump prior to the end of his term. House Res 21 reads as following:

This resolution calls upon Vice President Michael R. Pence (1) to immediately use his powers under section 4 of the Twenty-fifth Amendment to convene and mobilize the principal officers of the executive departments to declare that the President is unable to successfully discharge the duties and powers of his office, and (2) to transmit to the President pro tempore of the Senate and the Speaker of thHouse notice that he will be immediately assuming the powers and duties of the office as Acting President.

Vice-President Pence has reportedly said that he does not intend to invoke the 25th Amendment. This means that the House will likely move to the next stage of its strategy which is to vote articles of impeachment against Mr Trump. Given the Democrats majority in the House, passage is expected.

The articles of impeachment would then move to the Senate for a trial. Indications are that, unlike last year’s attempt to remove the President from office via impeachment where a Republican-controlled Senate voted not to remove the President, there may be enough support on the part of Senate Republicans to find Mr Trump liable for “high crimes and misdemeanors”, the standard under the U.S. Constitution for removal. Senate majority leader Mitch McConnell has signaled that Mr Trump’s behavior, where allegedly encouraged supporters to march last week on the Capitol, amounted to an impeachable offense.

The establishment wing of the Republican Party, now in damage control as a result of the storming of the Capitol by Trump supporters and the resulting deaths of five people, would like nothing more than to move on from the Trump era and start laying the groundwork for the 2022 mid-term elections.

I don’t expect impeachment actions to have any bearing on pending policy actions designed to impact the economy. With only seven days left until the change in government, attempts to remove Mr Trump are designed to score political points with an electorate, a significant amount of whom believe the actions of individuals storming the Capitol amounted to an insurrection attacking the country’s representative institutions of democracy.

As of 10:18 am AST, the dollar continues its weakening ways in light of job losses …

PairsFederal Reserve as of 4 January 2021OANDA as of 4 January 2021OANDA as of 8 January 2021 10:20 am AST
GBP/USD1.36621.36331.35822
USD/CAD1.27531.27261.26927
USD/CNH6.52506.45526.45624
USD/DKK6.08396.06576.05307
EUR/USD1.22301.22641.22875
USD/INR73.010072.936773.2355
USD/MXN19.892019.838219.8122
USD/JPY103.1900103.02103.53
USD/NOK8.57578.53008.42518
USD/SEK8.20958.20918.18760
USD/CHF0.88410.88150.88217
Sources: Federal Reserve, OANDA
RatesFederal Reserve as of 4 January 2021Bloomberg as of 8 January 2021 10:51 am AST
Federal Funds Rate0.090.08
Prime Rate3.253.25
3-month Treasury0.090.08
2-year Treasury0.110.14
10-year Treasury0.931.10
30-year Treasury1.661.87
Source: Bloomberg

Legal/Regulatory/Political Events Impacting Foreign Exchange Markets

An expected dire jobs report

The U.S. Department of Labor today reported that non-farm payroll employment fell by 140,000 jobs in December 2020. The unemployment rate remained at 6.7%, the same rate as reported in December 2020. Significant losses were in the retail and hospitality sectors, according to the Labor Department. Approximately 10.7 million people are out of work.

US waits for Senate election results from Georgia; strength of US dollar against European, African currencies a mixed bag …

PairsOANDA as of 4 January 2021OANDA as of 6 January 2021Notes
USD/KES108.391108.461Dollar flat
USD/NGN384.938381.690Dollar weakening
USD/GHS5.85245.85693Dollar flat
USD/CDF1950.611950.01Dollar flat
USD/AOA648.310649.149Dollar flat
USD/ZAR14.630914.8552Dollar strengthening
Source: OANDA

Meanwhile, as the count in Georgia comes to a close, yields on longer term notes begin to increase as the Senate gets closer to a 50-50 split and the likelihood of more spending under a Biden administration ….

RatesFederal Reserve as of 4 January 2021Bloomberg as of 6 January 2021 10:30 am AST
Federal Funds Rate0.090.08
Prime Rate3.253.25
3-month Treasury0.090.08
2-year Treasury0.110.13
10-year Treasury0.931.02
30-year Treasury1.661.78
Source: Federal Reserve, OANDA

And the buzz phrase again mid-week is dollar weakening as exchange rates for a number of foreign exchange pairs continues to fall. This in light of disappointing jobs numbers from ADP where the payroll company determined that 123,000 jobs were lost in December 2020.

PairsFederal Reserve as of 4 January 2021OANDA as of 4 January 2021OANDA as of 6 January 2021 10:45 am AST
GBP/USD1.36621.36331.35967
USD/CAD1.27531.27261.27269
USD/CNH6.52506.45526.43929
USD/DKK6.08396.06576.05823
EUR/USD1.22301.22641.22774
USD/INR73.010072.936773.0696
USD/MXN19.892019.838219.9091
USD/JPY103.1900103.02102.36
USD/NOK8.57578.53008.50760
USD/SEK8.20958.20918.20299
USD/CHF0.88410.88150.87959
Source: OANDA

Comparison of foreign exchange rates determined by the Board of Governors of the Federal Reserve System with current market rates.

Federal Reserve as of 4:15 pm 11 December 2020OANDA as of 10:53 am EST 15 December 2020
EUR/USD = 1.2112EUR/USD = 1.21443
GBP/USD = 1.3197GBP/USD = 1.33503
USD/CAD = 1.2767USD/CAD = 1.27548
USD/JPY = 103.880USD/JPY = 103.93

Federal Reserve releases select exchange rates as of 11 December 2020

Atlanta 14 December 2020, 9:43 PM EST

The Board of Governors of the Federal Reserve System today released the foreign exchange rates for the following foreign exchange pairs. Compare with exchange rates quoted by foreign exchange broker OANDA as of 9:59 PM EST:

Federal Reserve OANDA

EUR/USD = 1.2112 EUR/USD = 1.21443

GBP/USD = 1.3197 GBP/USD = 1.33503

USD/CAD = 1.2767 USD/CAD = 1.27508

USD/JPY = 103.880 USD/JPY = 103.93

As of 10:37 am AST 11 December 2020, Foreign exchange rates between U.S., select countries in Africa, Asia, and Europe

How to read the chart:

EUR/USD: You want to buy euros (EUR) with US dollars (USD). Where the market determined exchange rate is one EUR for 1.21088 USD, you divide your dollars in hand by the exchange rate to determine the number of euros you will receive.

USD/CAD=1.27702

USD/GBP=0.75077

GBP/USD=1.33175

USD/CNH=6.53412

USD/EUR=0.82575

EUR/USD= 1.21088 

USD/DKK=6.14584

USD/NGN= 379.869  

USD/JPY=104.36

USD/INR=73.6224

USD/GHS=5.84964   

Source: OANDA

Major political/legal event impacting foreign exchange

Treasury Secretary Mnuchin addresses congressional oversight commission on CARES Act

Yesterday, U.S. Treasury Department Secretary Steven Mnuchin made the following address:

“Senator Toomey, Representative Hill, Representative Shalala, and Commissioner Ramamurti, I am pleased to join you today to discuss the Department of the Treasury’s work to execute the National Security Loan Program established in the CARES Act. Treasury has worked diligently to implement every piece of the CARES Act, including the National Security Loan Program, efficiently and transparently. 

NATIONAL SECURITY LOAN PROGRAM

The CARES Act provides funding for up to $17 billion in loans to businesses critical to maintaining national security related to losses incurred as a result of coronavirus. The CARES Act authorized Treasury to make loans and loan guarantees for “businesses critical to maintaining national security.” The statute, however, does not define that term. Therefore, after consulting with the Department of Defense and the Office of Director of National Intelligence, Treasury issued guidance on April 10, 2020, providing that a company can fall within this definition if it meets at least one of three criteria: 


If a company met at least one of the three necessary criteria, Treasury conducted detailed financial and legal reviews of each application pursuant to consistent credit standards that were applied to all applicants. 
To date, Treasury has approved 11 loans totaling nearly $736 million. Information on the companies and dollar amounts are publicly available on our website, Treasury.gov.
Many of the companies we initially expected to take part in the program were able to raise funds in the capital markets, leaving most of the available loan funds unused. Going forward, I urge Congress to re-allocate these funds to provide relief for aviation industry workers, who continue to struggle through no fault of their own. 

CONCLUSION

I would like to thank the members of the Commission for working with us to provide vital economic relief to American workers, families, and businesses. I hope that the extensive amount of information Treasury has provided to the Commission has been helpful to you, and I am pleased to answer any questions you may have.”

As of 11:30 am AST 10 December 2020, Foreign exchange rates between U.S., select countries in East Africa, West Africa, the Caribbean, and Asia, and BitCoin

As of  11:30 am AST, 10 December 2020:

How to read the chart:

CAD/USD: If you come to the United States with one Canadian dollar (CAD)and wish to sell it for a US dollar (USD), the market price is .78103 USD.

USD/CAD: If you take a US dollar (USD) to Canada and wish to sell it for a Canadian dollar (CAD), the market price is 1.28018 CAD

CAD/USD=0.78103   USD/CAD=1.28018

CNH/USD= 0.15339   USD/CNH=6.51820

EUR/USD= 1.21037   USD/EUR=0.82610

DKK/USD =0.16260   USD/DKK=6.14831

NGN/USD= 0.00260   USD/NGN=379.384

JPY/USD=0.00960   USD/JPY=104.19

INR/USD=0.01356      USD/INR=73.5975

JMD/USD=0.00683    USD/JMD=143.446

GYD/USD=0.00469       USD/GYD= 205.184

GHS/USD=0.17031     USD/GHS= 5.84142

XCD/USD=0.37037        USD/XCD= 2.70

KES/USD = 0.00889     USD/KES= 110.408

BBD/USD = 0.50000     USD/BBD = 2.0000

TTD/USD = .14459         USD/TTD= 6.66797

BTC/USD= 18252.40     USD/BTC= 0.00005

Source: OANDA

Major political/legal event impacting foreign exchange

BIS releases Basel III monitoring results on banks

Today, the Bank of International Settlements Basel III committee released results of its survey determining compliance with bank capital requirements developed in 2010 under the Basel III framework.  The framework was developed in response to the financial crisis of 2008.  The objective of Basel III was to modify bank capital requirements thus leading to less variability in a bank’s risk weighted assets.

The survey announced today found that banks were continuing to make progress toward meeting the Basel III requirements and that bank liquidity ratios pre-Covid have been improving.  

Source: Bank of International Settlements

Foreign exchange rates. Dollar continues its fall …

Foreign exchange rates of interest as of 9 December 2020, 5:30 pm AST:

How to read the chart:

CAD/USD: If you come to the United States with one Canadian dollar (CAD)and wish to sell it for a US dollar (USD), the market price is .78113 USD.

USD/CAD: If you take a US dollar (USD) to Canada and wish to sell it for a Canadian dollar (CAD), the market price is 1.28002 CAD

INR/USD = 0.01356 USD/INR=73.6386

CAD/USD= 0.78113 USD/CAD= 1.28002

JMD/USD= 0.00682 USD/JMD = 143.631

EUR/USD= 1.21122 USD/EUR = 0.82552

NGN/USD= 0.00260 USD/NGN = 379.723

CNH/USD= 0.15338 USD/CNH = 6.51859

JPY/USD = 0.00961 USD/JPY = 104.09

Source: OANDA

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The US dollar weakens in Jamaica along with the pound and yuan …

According to data from OANDA, a foreign exchange brokerage, the US dollar has showed slight weakness when compared to the Jamaica dollar. During the period 1 December to 5 December 2020, the US dollar priced in Jamaica dollars fell 0.950% from 145.195 JMD to 143.815 JMD. The British pound did not fare much better, falling .5456% from 194.220 JMD to 193.160 JMD.

The Jamaica dollar price for the China yuan fell .292% from 22.1260 JMD to 22.0613 JMD.

The JMD-priced euro saw some gain, climbing in price by .069% from 174.173 JMD to 174.294 JMD.

The inter-bank rate has held at .50% since August 2019 with the Bank of Jamaica targeting an inflation range of four to six percent.

Unlike West African counterparts, Kenya shows appetite for US dollar …

While the US dollar has been declining against a number of currencies, the Kenya shelling does not appear to be one of them, at least during the first week of December. According to data from OANDA, a foreign exchange brokerage, from the period 1 December through 5 December 2020, the Kenya shelling price of a US dollar increased 0.625% from 109.268 KES on 1 December 2020 to 109.951 KES on 5 December 2020. The current Bank of Kenya exchange rate is 1 USD for 111.0618 KES.

The Kenya shilling price for the euro, British pound, and Chinese yuan also increased during the same period. The euro shilling price ticked up from 131.076 KES to 133.253 KES (1.660%). The pound-shilling price advanced 1.0358% from 146.162 KES to 147.676 KES while the Chinese yuan advanced 1.2936% from 16.6311 KES to 16.8665 KES.

The Kenyan central bank’s inter-bank interest rate is 3.96% while the 91-day treasury bill is yielding 6.86%.