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FOMC Minutes Trigger Dollar Sell-Off

Discussion in 'Forex Daily News & Outlook' started by forextrends24, Oct 14, 2009.

  1. forextrends24

    forextrends24 New Member

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

    The U.S. Dollar closed lower across the board with no sign of a let-up in this trend. Last week’s mini rally triggered by Bernanke’s comments about a tighter monetary policy have been erased.

    Today’s FOMC Minutes Report indicated that the Fed was interested in keeping interest rates low and expanding the mortgage buyback program. They cited “the cost of the economy turning out to be weaker than anticipated could be relatively high.” This comment means the Fed doesn’t want to raise rates or end stimulus until they are certain the recovery is sticking. This was basically another way to restate what Bernanke said last week when he commented that the Fed would move toward a tight monetary policy once the economy was on solid ground. The U.S. Dollar spiked lower on the news as some traders have been speculating that the Fed was looking to put an end to its easy money programs.

    Intervention by other central banks to control the rise in their currencies may be the only way to combat the fall in the Dollar. The New Zealand, Japanese, Canadian and Euro Zone central banks have expressed the most concerns about the rapid rise in their currencies. Can a concerted intervention be in the offing in the near future to boost the Dollar?

    Read full article at ForexHound.com as well as Forex Analysis, Forex Education and exclusive timely market Gann Analysis

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