CAPITAL MARKETS Foreign Exchange Innovative Solutions. Personalized Service. FX Market Update November 21, 2014 Foreign Exchange (Interbank- $3MM and up) CURRENCY SPOT CURRENCY SPOT EUR 1.2382 BRL 2.5273 JPY 117.77 CNY 6.1244 GBP 1.5649 DKK 6.0084 CAD 1.1241 FJD 0.5096 AUD 0.8666 HKD 7.7569 CHF 0.9704 HUF 245.6500 NZD 0.7877 INR 61.7625 MXN 13.6455 KRW 1111.04 Equity Indices MARKET AVERAGE DJIA 17,812.98 Nikkei 17,357.51 LIBOR Interest Rates CURRENCY 1-MS. USD 0.15525 EUR 0.00429 JPY 0.07929 SPOT 6.7985 44.8800 3.3908 45.8180 7.4774 1.2992 32.7500 2.2209 Interest Rates TYPE Fed Funds Target Prime Rate CHG. 93.98 56.65 2-MS. 0.20450 0.03571 0.10071 CURRENCY NOK PHP PLN RUB SEK SGD THB TRY 3-MS. 0.23285 0.06214 0.10786 6-MS. 0.32690 0.15000 0.14857 CURRENCY TWD UYU VND XPF ZAR Platinum Silver Gold SPOT 30.8700 23.8500 21345.00 94.4700 10.9500 1220.50 16.3000 1194.20 RATE 0-0.25 3.25 12-MS. 0.56430 0.30286 0.27471 Commentary Surprise Cut Global markets received another jolt from the Pacific Rim, this time from the likes of the People’s Bank of China. In response to both a slowing domestic and global economy, China’s central bank cut benchmark interest rates for the first time in two years. It cut the one-year deposit rate by 25 basis points to 2.75 per cent and the one-year lending rate by 40 basis points to 5.6 per cent, effective Saturday. China's rate move comes after the Bank of Japan sprang a surprise on Oct. 31 by dramatically increasing the pace of its money creation, which is understandable, given the ramifications of globalization. The inverse relationship between a weak Yen and Chinese trade prospects support the move. Basically, a weaker Yen hurts the Chinese economy as foreigners shift preferences to a cheaper regional good. Moving West, in a speech from Frankfurt this morning, Draghi was resolute in his message that the ECB will do whatever it takes to meet its mandate - in similar vein to his testimony to the European Parliament. He emphasized (more than once) that the bank can and will alter the size, composition and pace of its asset purchases in order to meet it’s mandate. He noted that the ECB should do this 'without delay' if necessary. The view that asset purchases would boost credit creation, and help households and businesses in a region battered by weak confidence and low investment is a clear signal that the ECB chief believes more action would soothe the region’s woes. On this side of the pond, aside from the constant bickering and finger pointing in D.C. which have done nothing but clog the pipes of political progress (where is Frank Underwood when you need him), the California student protests over tuition increases, and the Raiders winning a game (just win, Baby…finally), there isn’t a lot of news to speak of that you haven’t already heard. Regarding US rates, sentiment is for continued adjustment in USD rates as long as data follows the current pace of activity. Recent price action suggests that USD bulls need to remain patient and focus on ‘non-US’ drivers as catalysts for movement in the dollar. As we saw this week, stronger than expected CPI and a blow-out strong Philly Fed Survey were insufficient in pushing rates higher following the FED minutes. Regardless, for now the FED may be happy that they don’t need to anything …yet. Interest Rates FED 0-0.25% ECB 0.05% BoE 0.50% BoC 1.00% BoJ 0.10% RBA 2.50% RBNZ 3.50% Prepared by: Sean Cotton Foreign Exchange Advisor (800) 767-8442 This material is for your private information and we are not soliciting any action based upon it. Nothing in this material should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation to buy or sell any security or other Bank product. This material provides general information only and should not be read as containing any specific investment advice or recommendations. The discussion herein is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. Opinions expressed are our current opinions as of the date of publication of this material . Equal Housing Lender. Member FDIC. © 2013 Bank of the West. Form # 810-01091 (04/13)