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2/11/2010 - The Current Market Sentiment

Discussion in 'Current Market Sentiments' started by fx-recommends, Nov 2, 2010.

  1. fx-recommends

    fx-recommends Content Contributor

    Aug 6, 2008
    Likes Received:
    The equities markets are still moving nearly in a side way waiting for the Fed's interest rate decision tomorrow and it's economic assessment which is widely awaited by the market to know more about the Fed's new stimulation package plans which affected negatively on the greenback value in the recent few weeks across the broad since the Fed's reference to it in its recent meeting which weighed negatively on the greenback which was already hurt by slowing down in growth and now by the market waiting for further liquidity to come to the market by the fed in a second round of its quantitive easing plan to stimulate the economy after easing back in the second half of this year buying more Mortgage backed securities and rolling over it’s holdings of treasury securities as they mature before the deterioration can have further negative impacts on the consuming and capital spending and to inform the markets that the Fed will not stand seeing the economy falling back in a second dip recession with no action even with the interest rate near 0% to fight the deflation emerging pressure in US helping the stocks prices which are waited for the economic growth to be pushed up by these new easing measures which are not expected to have an exit soon with no expected inflation pressure as the Fed's repeated recently and as we have seen recently the U.S. consumer prices of September rising up by just 0.1 percent and its core unchanged for the second month monthly by the end of last week.
    The Single currency is still moving in a side range after sliding from 1.416 versus the greenback when Bernanke's repeated his mantra that the fed is ready to take further easing action whenever its needed to support the economic growth which has given the market the same seen conclusion and encourage it to start taking profits pushing the single currency down to 1.37 where it has succeeded to form a bottom to rise again getting use of the G20 decision to leave the market free to determine its forex rates but it could not keep these gains forming a lower high at 1.4070 getting down again to 1.375 where it has started rising back again currently trying to get above 1.4 but it is still unable to cross above this psychological level until now. God willing, the pair is expected to keep this side way on waiting for the Fed's meeting to clear to the market its new easing plans.
    While the British pound has got down below 1.6 versus the greenback for the first time this week after it has faced difficulties to get above 1.608 with the slide of October constructions PMI to 51.6 while it was expected to be 53. The cable could close last week above 1.6 after it had found support again below 1.575, it could easily join the single currency creeping up this time versus the greenback as the weights are still getting off it since the BOE decision to keep its stimulating buying bonds plan as it is at just 200B Stg and the minutes announcement of it which have shown 3 split ways in the MPC which refer to that there is no a close action from it can threat British pound by easing currently specially after Q3 GDP preliminary reading which surprised the market by coming up quarterly by .8% while it was widely expected to be just .4% lightening the pressure on the BOE to ease and giving it a chance to wait like the markets for the Fed to take its decision, by God's will.

    Best wishes

    FX Consultant
    Walid Salah El Din
    E-Mail: mail@fx-recommends.com

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