We all are eagerly waiting for the FOMC statement because it‘s going to alter the direction of Forex inflows. Thus, for today, there is an ignited topic of concern and the points issued in the FOMC statement.
As it was anticipated that the FOMC would not change the benchmark interest rate of 0-0.25% and this anticipation becomes true, as they remain stick to their decision.
FOMC decided to extend the asset purchase program closing date until March, and sustain the program size, but they had not stated that the economy has regained its speedy recovery.
They also extended the MBS Agency purchases up to March 2010 with the same program size. The decision regarding extension of MBS purchase is obvious, as the Treasury Program will phase out steadily.
The comments of FOMC on the economic stability are reflecting little improvements as the data show, but overall the conditions are still hovering.
Overall, the FOMC statements are pointing towards moderate economic and Forex ease with long way to go to pick the interest rate at their usual position until 2010 Q4 as per near expectations.
Forex Response towards FOMC Statement
The market was supposed to send the bond yields about 10bp, which is lowest across the Forex bend with USD gaining support from the announcement.
The response of US equity was dull and the previous good returns were reversed stridently. The energy and financial shares has dragged down the S&P500 index lowest to 1%.
The same downturn can be seen in the Asian market also, as they have poor start this morning with China showing deteriorating flow. The Japanese market is enjoying the strong Forex trend after the three-day close of the market.
Currency Pair View:
EUR/USD: Resistance- 1.4840, Support- 1.4685, Spot- 1.4683
USD/JPY: Resistance- 92.38, Support- 89.98, Spot- 90.10
USD/CHF: Resistance- 1.0359, Support- 1.0099, Spot- 1.0341
This is the report on the FOMC statements and the possible changes in the Forex trading and economic conditions.
The article is giving news update about the eagerly waited reports of FOMC meeting and the consequences on the Forex market along with the trading figures of the main currencies.
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