User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Wednesday January 30, 2008 - 01:23:49 GMT
FXCM - www.dailyfx.com

Share This Story:
| | Email

Forex Research - How Much Will the Fed Cut at Its January Meeting: 25bp or 50bp?

Tuesday, 29 January 2008 22:04:12 GMT

Written by Kathy Lien, Chief Strategist

• Euro Stalls Ahead of Federal Reserve Interest Rate Decision
• British Pound Headed for a Test of 2.0

How Much Will the Fed Cut at Its January Meeting: 25bp or 50bp?
All eyes are locked on the Federal Reserve’s monetary policy decision tomorrow afternoon. The price action of the US dollar has been mixed since the beginning of the week indicating that traders are not ruling out any surprises. Fed fund futures are pricing in a 72 percent chance of a 50bp rate cut and a 28 percent chance of a more conservative 25bp cut. Of the 86 economists polled by Bloomberg, 49 expect a 50bp cut, 23 expect a 25bp cut, while 13 expect rates to be left unchanged (the one remaining economist believes that there will be a 75bp rate cut). DailyFX readers actually actually favor a 25bp rate cut over a 50bp cut and interestingly enough, the votes between 50bp and nothing at all are very close. In other words, the consensus across the markets is not very strong. We believe that the Fed will nod to the markets once again and cut by 50bp. Shortly after the emergency rate cut, there was a decent chance that the Fed could make two back to back 75bp rate cuts. But since then, traders have become far more realistic by realizing that the world has not come to an end and stocks have stabilized. As a result, rate cut expectations have eased significantly. Since the emergency rate cut last week, stocks have rebounded 800 points, durable goods increased strongly in the month of December, gold prices have hit record highs while oil prices regained strength. The housing market still remains vulnerable with house prices as measured by the Case Shiller index falling to the lowest level in 7 years. The choice between a 25bp or 50bp rate cut is really the choice between being “at the curve” or “ahead of it.” By the end of this year, we expect interest rates to come down to at least 2.50 percent, which is 100bp from current levels. The Fed can get half of that easing out of the way on Wednesday and enjoy the benefits of easy monetary policy throughout the second half of the year or they could cut by only 25bp and work for each tenth of a percentage point increase in GDP. Either way, there is a slim chance of the FOMC rate decision being dollar bullish because tomorrow’s rate cut will certainly not be their last. Before the rate decision, there could be some action with the ADP employment change and the advance release of fourth quarter GDP.

Euro Stalls Ahead of Federal Reserve Interest Rate Decision
The Euro has stalled near the top of its weeklong trading range ahead of the Federal Reserve’s interest rate decision. The Eurozone current account, French consumer confidence and housing starts were released today and all of the numbers should have been Euro bearish. Yet the currency is unchanged against the dollar thanks to the ECB’s stubbornly hawkish monetary policy stance. ECB member Orphanides continues to be optimistic about the Eurozone’s economy when he said today that he is not worried about a slowdown in growth. This may be in reaction to the comments from European Union leader Junker who plans on cutting the region’s growth forecasts. German retail sales and Eurozone retail PMI are due for release tomorrow. Spending is expected to improve thanks to a strong labor market. Meanwhile, the Swiss franc is weaker across the board following a narrower than expected trade surplus last month and a drop in the UBS Consumption Indicator.

Visit the Euro Currency Room for resources dedicated specifically to the Euro.

British Pound Headed for a Test of 2.0
Despite weaker economic data, the British pound appears to be headed for a test of 2.0. According to the CBI Distributive Trades survey, consumer spending slowed in the month of January but that did not lead to a sustained sell-off in the British pound. The main reason is because it is not significant enough to convince the Bank of England to lower interest rates again next month. According to a special technical analysis report that we published last week, after falling nearly 2,000 pips from the November high, the current rally that is underway could take the British pound up to at least 2.01. There are a few pieces of housing market data due for release tomorrow. Given that housing is one of the most vulnerable aspects of the UK economy, the data is not expected to be pound bullish.

Visit the British Pound Currency Room for resources dedicated specifically to the Euro. 

Canadian, Australian and New Zealand Dollars Rally, Will the Reserve Bank of Australia Need to Raise Rates?
The Canadian, Australian and New Zealand dollars continued to extend their gains despite a retracement in gold prices and a marginal rise in oil prices. Stronger Canadian business orders have contributed to the loonie’s strength; upside surprises in Canadian economic data are rare occurrences these days. There was an interesting article in the Australian this week, which is the country’s most popular newspaper calling for a 50bp rate hike by the central bank to bring prices under control. If the RBA raised rates at their next meeting, they would be the only major central bank to be doing so, which would be a big positive for the Australian dollar. New Zealand on the other hand reported much weaker than expected building permits but that had a minimal impact on the New Zealand dollar.

Tell us what you think on the Canadian dollar Forum.

Carry Trades Rally Unimpressive Despite another 96 Point Rally in the Dow
The Japanese Yen crosses are higher today on the heels of another 96 point rally in the Dow. Given the size of the move in equities over the past 2 trading days, the rally in carry trades are unimpressive. We continue to believe that the correlation between equities and currencies are breaking down because the people who are buying stocks are not the same people who are buying carry trades. Also, there may not be new money flowing across the financial markets. Many of these dollars, Euros, and Yen may just be parked on the sidelines in the local currencies waiting for the next best opportunity. Japanese economic data was stronger than expected with the unemployment rate holding steady and overall household spending beating expectations. Industrial production is up next.

Visit the Japanese Yen Currency Room for resources dedicated specifically to the Euro.

Daily1_29_01

Daily1_29_02

Daily1_29_03




By Kathy Lien, Chief Strategist of DailyFX.com
Contact Kathy Lien about this article at klien@dailyfx.com

 






©2007 DailyFX. All Rights Reserved.

 

Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."



Elevate Your Trading With The Amazing Trader!

The Amazing Trader includes:
  • Actionable trading levels delivered to YOUR charts in real-time.
  • Live trading strategy sessions.
  • Market Updates with Trading Tools.

Register To Test Your Amazing Trader


Trading Ideas for 23 October 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

Tue 24 Oct
All Day flash PMIs
Wed 25 Oct
01:30 AU- CPI
08:00 DE- IFO Survey
08:30 GB- GDP
14:00 CA- BOC Decision
14:30 US- EIA Crude
Thu 26 Oct
11:45 EZ- ECB Decision
12:30 US- Weekly Jobless
14:00 US- Pending Homes Sales
Fri 27 Oct
12:30 US- GDP
14:00 US- final Univ of Michigan

Forex Trading Outlook


Potential Trading Opportunities


  • POTENTIAL PRICE RISK: Medium Tue-- All Day Global flash PMIs. First good look at October economic performances.



  • POTENTIAL PRICE RISK: HIGH Wed-- 01:30 GMT AU- CPI. Top Inflation indicator.

  • POTENTIAL PRICE RISK: HIGH Wed-- 08:00 GMT DE- IFO Survey. Top German indicator.


  • POTENTIAL PRICE RISK: HIGH Wed-- 14:00 GMT CA- BOC Decision. No Policy Change Expected.


  • POTENTIAL PRICE RISK: Medium Wed-- 14:30 GMT US- EIA Crude. Top Weekly WTI Statistic.



John M. Bland, MBA
co-founding Partner, Global-View.com

EXCLUSIVE: Global-View Daily Trading Chart Points Updated

EXCLUSIVE: Global-View Free Forex Database updated




TRADER ADVOCACY ARTICLES

Trader's Advocate Articles..

pic

Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

 
Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map


Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by Global-View.com.

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog

Global-View.com also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at Global-View.com. This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.

 

WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105