Wednesday September 21, 2005 - 05:14:56 GMT
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Tricom Futures and Foreign Exchange -
Forex: The FOMC - Same old Same old
The US dollar was mixed against major currencies, succumbing to modest profit-taking against the euro but gaining modestly against the yen after the US Federal Open Market Committee hiked its target rate overnight, as expected, by 25 basis points. At the same time the Fed, in its minutes from the meeting, indicated it would continue with its "measured" pace of credit tightening.
However enthusiasm for the dollar turned more subdued in the Asian session, and it eased against the euro on some profit taking after having surged strongly in the wake of the inconclusive election result in Germany at the weekend.
Well, as we commented yesterday, the FOMC maintained the status-quo with its post-meeting statement, causing the USD to remain lightly supported as traders expect further rate hikes in coming months. I for one, feel we're nearing the end of the rate cycle, or atleast yesterday's hike was possibly the last for the year.
The USD's slide today after lunch in Asia has opened up the way for a retest of 1.2210-20 in the EUR/USD, and 1.2700 in the USD/CHF. As the effects of the German election continue to subside, the EUR's woes will also disappear.
Today’s Economic Releases:
UK: MOPC meeting minutes
Today's Top Trades
. Buy EUR/USD around 1.2140-50
. Buy GBP/USD around 1.8010-20
For more ideas send me an email, [email protected]
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