Wednesday September 22, 2010 - 04:09:12 GMT
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Fed Decision Crushes U.S. Dollar
The U.S. Dollar fell sharply lower versus the Euro and the
Japanese Yen Tuesday afternoon after the Federal Open Market Committee hinted
that it stood ready to provide stimuli for the U.S. economy. The suggestion of
additional quantitative easing conjured up images of the Fed firing up the
Treasury printing press, thereby weakening the Dollar.
The FOMC statement suggested the Federal Reserve may be
preparing to provide more stimuli, most likely at its next meeting in November.
This news confirmed what investors were looking for prior to the decision. The
Fed cited the main reasons for considering additional stimulus was rising
unemployment and falling prices. Todayâ€™s Fed statement brought up concerns
about deflation for the first time since its loose monetary policy began.
In addition to the soft nature of the Fedâ€™s monetary policy
decision, favorable debt auctions in Spain
lit the initial fire this morning in the EUR USD.
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