FOMC Outcome Might Determine Dollars Future!
The big day has finally arrived with FOMC meeting being the main hot event for all global markets. Yesterday, we had durable goods orders out of US, printing a better number and therefore giving greenback a bid, taking EUR/USD down towards 1.47. The pair struggles to move either way, moving within tight range of 1.4735-1.4790. Today we have ADP report coming out, which will eventually give us an idea of how the non farm payrolls will be this Friday, with current analysts estimations giving it a
What Will the Czech Central Bank Do About 7% Inflation?
? Czech January inflation will approach 7%, hitting a 9-year high. ? The National Bank?s new inflation forecast is likely to be more pessimistic in the short term, while more positive for the next 12-18 months. ? The inflation shock should temporarily increase expectations for more aggressive hikes in rates, pushing the koruna to new all-time highs. In the last quarter of 2007, we were confronted with numerous unpleasant inflation surprises, but this is not the end of the influx of
New worries in the market
Investors sold financial stocks and the dollar on Thursday as concerns about two top U.S. bond insurers’ credit ratings reinforced fears about the health of the U.S. economy. Speculation on financial television network CNBC that credit rating firms would downgrade Ambac Financial Group Inc and MBIA Inc pushed both down more than 10 %, drowning out the cheers for Wednesday’s 50 basis point interest rate cut by the U.S. Federal Reserve. The Dow Jones industrial average closed down 0.3 %,
Currency Currents
Just in case you may reside on another planet and hadn?t noticed, the US Federal Reserve Open Market Committee, the jolly bunch assembled together representing the de facto global central bank, will deliver its interest rate decision today. If you do reside on another planet, and are looking down at the rather interesting one where the Fed resides, you may have noticed just how many trees have been killed in order to pontificate about what the Fed should do, will do, and how it will
Lithuania: Loose fiscal policy triggers downgrade
The rating agency Standard & Poor s has downgraded Lithuania s long-term foreign currency rating by one notch to A- from A. S&P maintains its negative outlook so additional rating action cannot be ruled out. The downgrade comes after S&P last year changed its outlook on Lithuania to negative.
The euro is trading steady ahead of the Fed meeting
Attention is fixed on the U.S. Federal Open Market Committee (FOMC) meeting today. The Federal Reserve is expected to announce a rate cut to help the U.S. economy avoid a recession. Meanwhile, gross domestic product data revealed that the U.S. economy grew at a much slower pace, up only 0.6% in the fourth quarter, down from 4.9 percent in the third quarter. The report suggests that the Fed may move aggressively to cut rates to boost the U.S. economy. The U.S. dollar was little changed ahead of
1.50 EUR/USD mark again within striking distance
On Wednesday, EUR/USD basically traded in a wait-and-see mode going into the Fed meeting. The pair traded above the 1.48 at noon, but gave back the earlier gains after a stronger than expected ADP labour market report. However, the downside was still well protected, reinforced by a weak Q4 US GDP figure. The reaction on the Fed interest rate decision was straightforward. As the market hadn?t fully priced in a 50 basis point rate cut, EUR/USD jumped to the 1.49 area immediately after the?
US: Strong Durable Orders don’t fit in consensus thinking
The durable orders report was a shocker as it came in very strong, questioning whether the economy was as weak as consensus had become to belief. Of course, the durable orders are notoriously volatile, but its strength is a wake up call that one should never stop questioning the outlook for the economy. The headline orders rose by 5.2% M/M following an upwardly revised 0.5% M/M in November. Excluding transportation, orders were up an equally strong 2.6% M/M, following an upwardly revised 0.4%
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