User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Friday September 7, 2007 - 16:41:21 GMT
BHF-Bank -

Share This Story:
| | Email

Forex Research - FX Briefing - FOMC: A big step?

FX Briefing 7 September 2007


·        ECB puts interest rate hike on hold because of financial market turmoil

·        More signs that US economic slowdown is underway

·        Dollar burdened by weak US economy and impending Fed rate cut


FOMC: A big step?

This week there were some movements on the forex markets, but these did not last. Overall, the US dollar fell slightly against most currencies. EUR-USD strengthened to just under 1.37, and USD-JPY was just over 115 at the end of the week.


At the moment, the forex market is getting contradictory signals: on the one hand, equity markets appeared to be quite robust. The Dow Jones actually rose slightly during the course of the week, and is now less than 5% below its all-time high in June. Although the Dax has fallen more sharply, it has still gained around 15% so far this year – an outstanding performance compared to other industrial countries.


On the other hand, money markets remain distorted in spite of central banks’ liquidity injections. The overnight rate at times reached 4.80%; three and six-month interbank rates rose to over 4.70%. Credit markets remain frozen. Central banks in Europe and the US are signaling willingness to help. The ECB Council put interest rates on hold, referring to financial market volatility and uncertainty as to the macroeconomic impact of the financial market crisis. The European central bank’s base scenario has not changed; its growth forecast remains favourable and it thus still sees inflation risks in the medium term. However, the bank appears to be losing confidence in the base scenario. At any rate, the ECB has avoided using any key words; it seems that an interest rate hike is no longer on the cards, at least not for the next two months.


Irrespective of the possible consequences of the financial market crisis, eurozone economic data are revealing that growth is slowing down. Taking the average GDP growth rates in the first two quarters of this year, economic growth was 0.5% per quarter. This is probably below potential. The various sentiment indicators are still on a high level, but the majority are tending downwards. Moreover, expectations have been declining recently. German industrial new orders fell by 7.1% in July. After the strong increases of the two previous months, this is no cause for alarm, but it confirms that such high growth rates cannot be sustained for ever. Thus in our view, economic growth will come down, even if the current credit crisis does not significantly hurt the real economy.


Judging by comments from Fed representatives, it looks as though the Fed is expecting the economy to slow down significantly in the second half of the year. Several central bank representatives are now admitting that the problems in the housing sector are more serious and likely to be more sustained than originally assumed. The “rword” is no longer taboo: according to William Poole, president of the St. Louis Fed, a voting member of the FOMC, and well known as a hawk, the likelihood of a recession in the US has increased. The OECD has reduced its growth forecast for the US to 1.9%, the International Monetary Fund has also announced a downward revision. Surprisingly, even the ECB is talking about a “likely slowdown in the USA”.


Most observers, including ourselves, are convinced that the US central bank will cut the fed funds rate at the next FOMC meeting on 18 September. The question now is rather whether there will just be a 25bp cut, or whether the Fed will “go the whole hog” and cut rates by 50 bp. In our view, some of the US data are worrying. These of course include the housing market and related financial services. The labour market seems to be deteriorating markedly too. Heavier loan burdens or reduced availability of credit plus higher energy prices are likely to curb private consumption. Consumer confidence has already deteriorated anyway.


However, the economic data available up to now do not really justify cutting interest rates by 50 basis points. The data due to be published prior to the meeting are not likely to change this assessment either. However, a big step could possibly help to ease the situation on the financial markets. It could also (with a time lag) alleviate the burden on mortgage borrowers. The main disadvantage would be that this might give the impression that the Fed is allowing financial markets and the government to dictate its interest rate policy.


We are expecting the impending FOMC meeting to influence exchange rate developments over the next few days. If expectations of rapid US rate cuts increase, the dollar could come under pressure against the euro and the yen.


Stephan Rieke +49 69 718-4114

Economics Department

+49 69 718-3642

[email protected]

Foreign Exchange Trading

[email protected]

Jörg Isselmann

+49 69 718-2695

Matthias Grabbe / Klaus Näfken

+49 69 718-2688


<i>This report has been prepared by BHF-BANK Aktiengesellschaft on behalf of itself and its affiliated companies (together "BHF-BANK Group") solely for the information of its clients. The information and opinions in this document are based on sources believed to be reliable and acting in good faith, but no representation or warranty, express or implied, is made by any member of the BHF-BANK Group as to their accuracy, completeness or correctness. Opinions and recommendations are given in good faith but without legal responsibility and are subject to change without notice. The information does not constitute advice or personal recommendation, for which the duty of suitability would be owed, but may facilitate your own investment decision. Moreover, you should seek your own advice as to the suitability of an investment matter mentioned herein. Investors are reminded that the price of securities and the income from them can go down as well as up and that the past performance of an investment or a market is not necessarily indicative for future results. This document is for information purposes only. Descriptions of any company or companies or their securities mentioned herein are not intended to be complete, and this document is not, and should not be construed as, an offer to sell or solicitation of any offer to buy the securities mentioned in it. BHF-BANK Group and its officers and employees may have a long or short position or engage in transactions in any of the securities mentioned in this document, or in any related securities. This publication must not be distributed in the United States.

© 2007 BHF-BANK Aktiengesellschaft

All rights reserved. Please mention source when quoting from it.



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."

Actionable trading levels delivered to YOUR charts in real-time.

Register To Test Your Amazing Trader

GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium

Mon 10 Sep 2018
AA 08:30 GB- GDP, Trade, Output
Tue 11 Sep 2018
AA 08:30 GB- Employment Decision
A 09:00 DE- ZEW Survey
Wed 12 Sep 2018
A 12:30 US- PPI
A 14:30 US- EIA Crude
A 18:00 US- Beige Book
Thu 13 Sep 2018
A 1:30 AU- Employment
AA 11:00 GB- Bank of England Decision
AA 11:45 EZ- European Central Bank Decision
A 12:30 US- Weekly Jobless
AA 12:30 US- CPI
Fri 14 Sep 2018
A 08:30 GB- GDP
AA 12:30 US- Retail Sales
A 13:15 US- Industrial Production
AA 14:00 US- prelim University of Michigan

John M. Bland, MBA
co-founding Partner,

Global-View Affiliate Program

We are starting an affiliate program to market some of our products.

Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.

Put the word "affiliate" in the email subject line.

Contact us

Start trading with forex broker Markets Cube

Max McKegg's Daily Forex Trading Forecasts

Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.

Request a TRIAL of Max's Forex Service.


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

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 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 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.



By using this website, you are agreeing to our Privacy Policy and Terms of Use, and Cookie Policy

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