User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Tuesday September 18, 2007 - 21:58:11 GMT
FXCM - www.dailyfx.com

Share This Story:
| | Email

Forex Research - Bernanke Put Drives US Dollar to Record Lows

 

Bernanke Put Drives US Dollar to Record Lows

Tuesday, 18 September 2007 21:24:33 GMT

• Euro Hits Record Highs: Is 1.40 Next?
• Carry Trades Break Higher As Dow Rallies 335 Points

Bernanke Put Drives US Dollar to Record Lows
The Greenspan put has now become the Bernanke put.  This term was coined back in 1998 when Greenspan bailed out the financial markets by lowering interest rates after the collapse of Long Term Capital.  Today, Bernanke gave the markets the biggest confidence boost that traders could have hoped for by cutting both the Fed funds rate and the discount rate 50bp.  By not committing to any future policy moves, the statement also left the door open for further interest rate cuts leading Fed Fund futures to now price in another 50bp of easing before the end of the year.  The decision was unanimous which makes it even more significant since every one of the FOMC members seemed to believe that the risks to growth far outweigh the risks to inflation.  With this move, no one can say that the Federal Reserve is behind the curve.  The rate decision has sent the US dollar tumbling to a new record low against the Euro and a fresh 30 year low against the Canadian dollar.  The only currency that the US dollar strengthened against is the Japanese Yen which benefited from the 335 point rally in the Dow.  A new trend has been established after Fed rate decision and we expect to see significant follow through not only in the Asian markets, but also in the US and European markets over the next few days since this will not be the one and only interest rate cut from the Federal Reserve.  As for what to watch next: keep an eye on consumer spending and non-farm payrolls.  Even though today’s step goes a long way in preventing a recession, it still does not rule out one.  If we have two back to back months of negative retail sales or non-farm payrolls, traders will begin to question whether the Federal Reserve has done enough.   Meanwhile producer prices saw the biggest decline since October 2006 while the NAHB index dropped to a record low.  These disappointments validate the need for easier monetary policy.  Tomorrow, we have consumer prices and housing starts.  With both crude and gasoline prices both dropping significantly in August, the numbers should be tepid, especially since the new highs in oil were not made until September. 

Euro Hits Record Highs: Is 1.40 Next?
The Euro hit a record high of 1.3985 after the Federal Reserve’s monetary policy decision.  Even though there are a lot of option barriers at 1.40, a test of that level seems inevitable.  The monetary policies of the European Central Bank and US Federal Reserve are growing further and further apart, which provides a fundamentally sound reason for the EUR/USD to continue to rally.  However Euro traders should be warned. As an export dependent region, a strong Euro will eventually take a bite out of growth.  The German ZEW survey dropped from -6.9 to -18.1, reflecting a growing sense of concern amongst analysts and economists.  The Fed’s decision to lower interest rates by 50bp will probably keep the European Central Bank on hold for the remainder of the year as well.  Yet, as long as the ECB does not turn dovish or lower rates themselves, the Euro could continue to remain firm. 

Carry Trades Break Higher As Dow Rallies 335 Points
Over the past few months, we have seen a very strong correlation between US equities and carry trades.  Today, that correlation was in full force as carry trades broke higher on the back of the 335 point rally in the Dow.  Not only did US equities rise to the highest level since July 27, but they also saw the largest percentage move since 2003.  Rate cuts are generally good for the stock market, which is why the response by carry traders has been so positive.  According to CNN Money, since 1945 the S&P 500 rallied 7 out of 11 times in the six months after a rate cut.  On average, the rally was in excess of 12 percent. So far, the Dow has only rallied 2.5 percent, which means that there could be more room to go.  Therefore if you believe that the Dow is headed higher then you also believe that carry trades will continue to rise.  Meanwhile the Bank of Japan is expected to leave interest rates unchanged tonight; no surprises are expected there. 

Canadian, Australian and New Zealand Dollars All See Strong Gains
The Canadian, Australian and New Zealand dollars all performed extremely well today on the back of rising commodity prices and resurgence in demand for high yielding currencies. The Fed’s move today has restored confidence in the financial markets and confidence translates into risk appetite or renewed demand for commodity currencies.  Gold and oil prices are also sharply higher today, which has helped to take the Canadian dollar to a fresh 30 year high.  There is no stopping the loonie at this point; parity with the US dollar (which is an exchange rate of 1.0) is so close that a test of that price level seems inevitable.  Reserve Bank of Australia Governor Stevens was also on the wires last night downplaying the impact of the US economic slowdown on the Australian economy.  Australia stands to benefit significantly from growth in Asia, which is expected to remain solid.  Yesterday, the Asian Development bank raised their growth forecasts for Asian economies excluding Japan from 7.3 to 8.3 percent. 

British Pound Back Above 2.0 Despite Softer Inflation Data
The Federal Reserve’s rate decision has taken the British pound back above 2.0.  US dollar weakness has overshadowed recent concerns about the UK economy.  Consumer prices were in line with expectations, with the exception of the annualized pace of CPI growth which was 1.8 percent against 1.9 percent expected.  The government’s guarantee of Northern Rock’s deposits has done nothing to stop depositors from withdrawing funds.  The minutes from the last monetary policy meeting are due for release tomorrow, which will shed more light on the Bank of England’s degree of concern about the economic impact of the credit market turmoil on the UK economy.

Daily fundamentals 09-18-2007 a

Daily fundamentals 09-18-2007 b

Daily fundamentals 09-18-2007 c

Daily fundamentals 09-18-2007 d

Daily fundamentals 09-18-2007 e

Written by Kathy Lien, Chief Currency Strategist of DailyFX

 
 

 

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."



Elevate Your Trading With The Amazing Trader!

The Amazing Trader includes:
  • Actionable trading levels delivered to YOUR charts in real-time.
  • Live trading strategy sessions.
  • Market Updates with Trading Tools.

Register To Test Your Amazing Trader


Trading Ideas for 23 October 2017

Register for the Amazing Trader

1.

Amazing Trader EVENT RISK Calendar:

Tue 24 Oct
All Day flash PMIs
Wed 25 Oct
01:30 AU- CPI
08:00 DE- IFO Survey
08:30 GB- GDP
14:00 CA- BOC Decision
14:30 US- EIA Crude
Thu 26 Oct
11:45 EZ- ECB Decision
12:30 US- Weekly Jobless
14:00 US- Pending Homes Sales
Fri 27 Oct
12:30 US- GDP
14:00 US- final Univ of Michigan

Forex Trading Outlook


Potential Trading Opportunities


  • POTENTIAL PRICE RISK: Medium Tue-- All Day Global flash PMIs. First good look at October economic performances.



  • POTENTIAL PRICE RISK: HIGH Wed-- 01:30 GMT AU- CPI. Top Inflation indicator.

  • POTENTIAL PRICE RISK: HIGH Wed-- 08:00 GMT DE- IFO Survey. Top German indicator.


  • POTENTIAL PRICE RISK: HIGH Wed-- 14:00 GMT CA- BOC Decision. No Policy Change Expected.


  • POTENTIAL PRICE RISK: Medium Wed-- 14:30 GMT US- EIA Crude. Top Weekly WTI Statistic.



John M. Bland, MBA
co-founding Partner, Global-View.com

EXCLUSIVE: Global-View Daily Trading Chart Points Updated

EXCLUSIVE: Global-View Free Forex Database updated




TRADER ADVOCACY ARTICLES

Trader's Advocate Articles..

pic

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 Global-View.com.

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

Global-View.com 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 Global-View.com. 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.

 

WARNING: FOREIGN EXCHANGE TRADING AND INVESTMENT IN DERIVATIVES CAN BE VERY SPECULATIVE AND MAY RESULT IN LOSSES AS WELL AS PROFITS. FOREIGN EXCHANGE AND DERIVATIVES TRADING IS NOT SUITABLE FOR MANY MEMBERS OF THE PUBLIC AND ONLY RISK CAPITAL SHOULD BE APPLIED. THE WEBSITE DOES NOT TAKE INTO ACCOUNT SPECIAL INVESTMENT GOALS, THE FINANCIAL SITUATION OR SPECIFIC REQUIREMENTS OF INDIVIDUAL USERS. YOU SHOULD CAREFULLY CONSIDER YOUR FINANCIAL SITUATION AND CONSULT YOUR FINANCIAL ADVISORS AS TO THE SUITABILITY TO YOUR SITUATION PRIOR TO MAKING ANY INVESTMENT OR ENTERING INTO ANY TRANSACTIONS.

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