October/November Central Banks Updates - Articles - Dukascopy Bank

Tue, 10 Nov 2020 14:03:32 GMT
Source: Dukascopy Bank SA
 

Central banks around the globe settled to follow the existing monetary policies to support the economic recovery during the coronavirus crisis.

Australia

On Tuesday, October 6, the Reserve Bank of Australia issued its Rate Statement. The Bank decided to keep the Cash Rate at the 0.25% level.

Fundamental analysis for AUD/USD: RBA Rate Statement

On Tuesday, November 3, the Reserve Bank of Australia published its Rate Statement once again.

According to the official release, the Bank decided on a package of further measures to support the Australian economy: a reduction in the cash rate target to 0.1%; 

  • a reduction in the target for the yield on the 3-year Australian Government bond to around 0.1%;
  • a reduction in the interest rate on new drawings under the Term Funding Facility to 0.1%;
  • a reduction in the interest rate on Exchange Settlement balances to zero;
  • the purchase of AUD100B of government bonds of maturities of around 5 to 10 years over the next six months.

Fundamental analysis for AUD/USD: RBA Rate Statement

Canada

On Wednesday, October 28, the Bank of Canada published its Monetary Policy Report. The Bank maintained its target for the overnight rate at the effective lower bound of 0.25%, with the Bank Rate at 0.50% and the deposit rate at 0.25%.

Moreover, the Bank announced it was recalibrating the quantitative easing (QE) programme to shift purchases towards longer-term bonds, which have more direct influence on the borrowing rates. At the same time, total purchases would be gradually reduced to at least CAD4B a week.

Fundamental analysis for USD/CAD: BOC Rate Statement

Japan

On Thursday, October 29, the Bank of Japan issued the Monetary Policy Statement. The Japanese policymakers voted to maintain the negative interest rate of minus 0.1% to the Policy-Rate Balances in current accounts held by financial institutions at the Bank.

Additionally, the Bank claimed it would purchase a necessary amount of Japanese government bonds (JGBs) without setting an upper limit so that 10-year JGB yields would remain at around zero percent. Also, the Bank announced that it would actively purchase exchange-traded funds (ETFs) and Japan real estate investment trusts (J-REITs) for the time being so that their amounts outstanding would increase at annul paces with the upper limit of about ¥12T and about ¥180B, respectively.

The Japanese central bank will continue with "Quantitative and Qualitative Monetary Easing (QQE) with Yield Curve Control". Moreover, the Bank will continue to support financial markets through the Special Program to Support Financing in Response to the Novel Coronavirus.

Initial reaction on the market:

The European Union

On Thursday, October 29, the European Central Bank announced its decisions on monetary policy:

  • The interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.50% respectively;
  • The Bank will continue its purchases under the pandemic emergency purchase programme (PEPP) with a total envelope of €1,350B. The Governing Council will reinvest the principal payments from maturing securities purchased under the PEPP until at least the end of 2022;
  • Net purchases under the asset purchase programme (APP) will continue at a monthly pace of €20B, together with the purchases under the additional €120B temporary envelope until the end of the year;
  • The Governing Council will also continue to provide ample liquidity through its refinancing operations (the third series of targeted longer-term refinancing operations (TLTRO III)).

Fundamental analysis for EUR/USD: ECB Monetary Policy Statement

The UK

On Thursday, November 5, the Bank of England released the Monetary Policy Report.

According to the official release: "At its meeting ending on 4 November 2020, the MPC voted unanimously to maintain Bank Rate at 0.1%. The Committee voted unanimously for the Bank of England to maintain the stock of sterling non-financial investment-grade corporate bond purchases, financed by the issuance of central bank reserves, at £20 billion. The Committee voted unanimously for the Bank of England to continue with the existing programme of £100 billion of UK government bond purchases, financed by the issuance of central bank reserves, and also for the Bank of England to increase the target stock of purchased UK government bonds by an additional £150 billion, financed by the issuance of central bank reserves, to take the total stock of government bond purchases to £875 billion."

Fundamental analysis for GBP/USD: BOE Monetary Policy Statement

The US

On Thursday, November 5, the Federal Reserve issued the FOMC Statement. As the result, the US policymakers voted to keep the target range for the federal funds rate at 0 to 0.25%.

Also, it was announced that the Federal Reserve would increase its holdings of Treasury securities and agency mortgage-backed securities at least at the current pace to sustain smooth market functioning and help foster accommodative financial conditions, thereby supporting the flow of credit to households and businesses.

Fundamental analysis for EUR/USD: FOMC Statement

New Zealand

On Wednesday, the Reserve Bank of New Zealand released the Monetary Policy Statement.

According to the official release: "The Committee agreed that the additional stimulus would be provided through a Funding for Lending Programme (FLP), commencing in December. The FLP will reduce banks' funding costs and lower interest rates. The Committee will also continue with the Large Scale Asset Purchase (LSAP) Programme up to $100 billion, and retain the Official Cash Rate (OCR) at 0.25 percent in accordance with the guidance issued on 16 March."

Initial reaction on the market:


Back to feed
To learn more about Dukascopy Bank CFD / Forex trading platform, SWFX and other trading related information,
please call us or make callback request.
For further information regarding potential cooperation,
please call us or make callback request.
To learn more about Dukascopy Bank Binary Options / Forex trading platform, SWFX and other trading related information,
please call us or make callback request.
To learn more about Dukascopy Bank CFD / Forex trading platform, SWFX and other trading related information,
please call us or make callback request.
To learn more about Crypto Trading / CFD / Forex trading platform, SWFX and other trading related information,
please call us or make callback request.
To learn more about Business Introducer and other trading related information,
please call us or make callback request.
For further information regarding potential cooperation,
please call us or make callback request.