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Euro Finishes Down but Off Low; Bond Auction Indicates Rates May Remain Low

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Apr 8, 2010.

  1. forextrends24

    forextrends24 New Member

    Mar 27, 2009
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    Today’s sample of Forex Analysis from ForexHound.com

    The Euro finished down but off its session low when traders lightened up positions following dovish comments from Fed Chairman Bernanke and a better than expected 10-Year Note auction.

    Bernanke said that economic conditions are continuing to improve but there are still concerns about weak bank lending and a sluggish housing market. His comments caused traders to soften their positions in the Dollar which had been placed in anticipation of an interest rate hike by the Fed. While Bernanke maintained his dovish stand, Kansas City Fed President Hoenig warned that low interest rates are helping to form asset bubbles. He suggested that the Fed raise its benchmark interest rate “sometime soon”.

    Treasury markets rallied as yields fell following today’s 10-Year Auction. Traders bought a record amount of 10-Year debt. Demand was strong which helped put pressure on yields. Some traders claim it was flight to safety because of concerns over a Greek default which triggered the demand in the Treasuries on Wednesday. Others believe the Fed will continue to keep interest rates low until the economy reaches a sustainable level. For whatever reason, yields remained low and traders now believe the Fed will leave interest rates untouched for a while. This encouraged some bullish Dollar traders to lighten up their positions.

    Read full article at ForexHound.com as well more Forex Trading articles including Forex Technical Analysis and Forex Education

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