1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.

Forex Analysis (Wed January 26 2011, 2:15pm NY Time EST) - US FOMC Rate Decision

Discussion in 'Current Forex Trading Signals' started by Henry Liu, Jan 26, 2011.

  1. Henry Liu

    Henry Liu Former FPA Special Consultant

    Joined:
    Jul 5, 2010
    Messages:
    473
    Likes Received:
    0
    The Federal Reserve will probably not surprise the market today and keep the current Federal Funds rate unchanged while leaving the 600 Billion Dollar stimulus in place as economy is showing moderate signs of recovery.

    The real market mover will probably be the accompanied statement, where Bernanke is expected to take notice on the recent improvement in Consumer Spending, Consumer Confidence, and perhaps improvement in recent credit and bank loans.

    However, focus on tight credit conditions will also be mentioned, and we can always count on the persistent weakness in the employment sector along with slightly above trend inflation as result of the general increases in food and energy prices.

    All in all we should expect a near identical FOMC statement from the December 14 2010 release. The phrase "...low levels of the federal funds rate for an extended period" will probably remain in the overall FOMC statement, therefore we will probably not get any persistent market reaction from this release...

    However, if Bernanke were to surprise the market and discuss exit strategies or phasing out QE2, market will rush to buy USD; on the other hand, if Bernanke were to concentrate on the gloomy outlook of the US economy, we will probably see EURUSD surge...

    But most likely we'll see very limited market reaction today, and unless you've traded this release before, I'd recommend to stay out. This is a very advanced news event that is high impact enough to change market trend, and therefore important to every Forex trader...

    So if you have never traded this release, just be present and watch market reaction while listening to your news wire service or Bloomberg TV and try to learn as much as you can, I'm sure you'll thank me later :)

    Historical Data & Chart For FOMC Rate Decision

    Thanks,

    [​IMG]
     
    #1 Henry Liu, Jan 26, 2011
    Lasted edited by : Sep 8, 2016
  2. Scoony

    Scoony Private, 1st Class

    Joined:
    Dec 3, 2009
    Messages:
    41
    Likes Received:
    1
    Not sure what you mean with your wording...

    Hi there, if you say BUY the USD it means to SELL EURUSD (going down)...you write EURUSD will surge which for me means up...I am confused...
    Scoony
     
  3. ahshawn

    ahshawn Recruit

    Joined:
    Apr 12, 2010
    Messages:
    6
    Likes Received:
    0
    notice ON THE OTHER HAND. pls. read again and u wont be confused.
    "if Bernanke were to surprise the market and discuss exit strategies or phasing out QE2, market will rush to buy USD; ON THE OTHER HAND, if Bernanke were to concentrate on the gloomy outlook of the US economy, we will probably see EURUSD surge..."
     
  4. udzankigh

    udzankigh Recruit

    Joined:
    Oct 22, 2010
    Messages:
    3
    Likes Received:
    0
    Read again!

    Hi Scoony, read again and don't get confused. He said "...on the other hand, if Bernanke were to concentrate on the gloomy outlook of the US economy, we will probably see EURUSD surge..." This is the opposite scenario to if Bernanke hints at scaling down QE2
     

Share This Page