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Fed Remains Committed to Low Interest Rates

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Nov 5, 2009.

  1. forextrends24

    forextrends24 New Member

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    Today’s sample of Forex Analysis from ForexHound.com


    The U.S. Dollar finished sharply lower today against most major currencies except the Japanese Yen. Speculators bet early and often this morning that the Fed would do nothing with interest rates nor hint at an end to its stimulus plans. These bets paid off as the Dollar weakened further after the FOMC announcement in the afternoon.

    Demand for higher yielding assets was strong today and based on what the Fed said, bullish traders should have a free pass for the next thirty days. The key will be a follow-through rally tomorrow. If the Dollar does not follow-through to the downside tomorrow then nervous shorts are likely to cover their positions, much like the move last week following the GDP Report.

    Today’s statement from the Fed was especially dovish. It appears the Fed is afraid it will spook the markets and the economy if it takes a more aggressive stance toward hiking interest rates. In its statement the Fed explained in greater detail than previous statements why it remains committed to lower interest rates. Basically, the gist of the statement is the economy is still fragile and operating at under capacity. This is leading to low inflation.

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

    Disclaimer: Trading foreign exchange on the margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore should not invest money that you cannot afford to lose.
     
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