Wednesday November 3, 2010 - 14:51:28 GMT
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Forex Hound - www.forexhound.com
Dollar Flat as Traders Await Fed Announcement
mid-term elections do not seem to have had too much of an influence on the
value of the Dollar as traders have quickly shifted their focus to todayâ€™s
Federal Reserve monetary policy meeting.
There is no question the Federal Open Market Committee is
poised to implement a new quantitative easing program. The questions over the
past two weeks have been how, and how much?
Since early August, traders had estimated that the central
bank will buy as much as $2 trillion in Treasury Bonds. Analysts are now saying
the Fed may do something like spend $100 billion a month for the next several
months. I agree that the Fed is will not
hit the market with â€śshock and aweâ€ť, but $100 billion a month seems pretty low.
Iâ€™m sticking with $250 billion.
The way things are evolving at this time indicates that the
Dollar could rally from the support base it has been trying to establish. Much
of the weakness the past few months has been triggered on speculation the Fed
will implement at least $1 trillion so unless the Fed meets or exceeds this
figure, I can build a case of a Dollar rally. A high number will weaken the
Dollar; a low number will strengthen the Dollar.
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