Wednesday September 23, 2009 - 12:36:38 GMT
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Dollar Trading Mixed Ahead of FOMC Announcement
This afternoon the Fed will make its latest decision regarding interest rates and economic policy. Most investors expect the Fed to leave interest rates unchanged at near 0%. The debate is whether the Fed will maintain its loose monetary policy or if it will announce the end to its stimulus program. The Fed may announce it is ending its mortgage buyback program at the risk of destabilizing the markets or it may decide to extend the program beyond its October ending date. Maintaining a loose monetary policy should continue to keep the pressure on the U.S. Dollar.
The U.S. Dollar is trading mixed against the major currencies this morning. There is some give back taking place in the EUR USD and Canadian Dollar because of lower demand for higher risk assets. Position evening is also providing some downside pressure to the Japanese Yen. The GBP USD is trading better following the release of the minutes from the last Bank of England meeting. Traders are supporting the Pound because the report did not mention the reduction of interest rates for deposits from member banks.
Trading is expected to be light ahead of this afternoonâ€™s Fed announcement; however, thin volume could lead to some volatile trading.
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