The Forex Daily Digest – September 23, 2009
The USD fell to a one-year low against the EUR, just over $1.48 as crumbling sentiment on the U.S. currency prompted selling ahead of a Federal Reserve meeting and Group of 20 summit this week. Traders took advantage of a dollar rally in the prior session to sell on views the Fed will signal plans to maintain loose monetary policy well into 2010. U.S. gold futures rose toward $1,020 an ounce, gaining one percent as a sharp deterioration of the dollar's value triggered investment buying in gold as a currency hedge.
The Federal Reserve opened a two-day meeting yesterday that is expected to end with a recognition the U.S. economy is on the mend, but no hint of an imminent monetary policy shift. The Fed seems certain to hold benchmark interest rates near zero, and most economists do not see it raising them until the middle of next year at the earliest. Policy-makers, however, are widely expected to discuss ways to pull back their massive provisions of cash to the economy in a way that preserves the recovery, while preventing inflation. The Fed announcement is scheduled for 2:15 pm (Eastern Time) this afternoon.
U.S. Treasury Secretary Geithner announced that U.S. economic growth appeared to be picking up steam and G20 leaders gathering in Pittsburgh this week would strive to ensure the recovery was balanced. He said, "We are at the very beginnings of this recovery ... We need to make sure that we keep at this, so we have in place a recovery that is going to be self-sustaining, led by private demand, (and) a financial system that can actually provide the credit that is needed.”
There was some good news for New Zealand's dairy farmers which helped the NZD rally against the USD, which fell to a 13-month low. The NZD jumped against its U.S. counterpart after government data showed the island nation's current-account deficit shrank to its lowest level since 2004. The U.S. unit fell to NZ$1.3820, its lowest level in 13 months. During the U.S. session, the USD fetched NZ$1.3862, a decline of nearly 2% on the day.
The EUR hit a five-month high against sterling, pushed higher by its sharp rally versus the dollar. The European currency rose 0.3 percent on the day to 90.81 pence, its highest level since April. In earlier trade, the euro rallied as high as $1.4793, its highest level against the USD in a year.
In economic news today, expect the FOMC announcement at 2:15 pm (ET), as well as the Crude Inventory report. In earnings, Bed, Bath and Beyond is scheduled to release their numbers along with AutoZone, Comtech Communications, General Mills, Red Hat and Paychex.
Happy Trading,
James Dicks
The Federal Reserve opened a two-day meeting yesterday that is expected to end with a recognition the U.S. economy is on the mend, but no hint of an imminent monetary policy shift. The Fed seems certain to hold benchmark interest rates near zero, and most economists do not see it raising them until the middle of next year at the earliest. Policy-makers, however, are widely expected to discuss ways to pull back their massive provisions of cash to the economy in a way that preserves the recovery, while preventing inflation. The Fed announcement is scheduled for 2:15 pm (Eastern Time) this afternoon.
U.S. Treasury Secretary Geithner announced that U.S. economic growth appeared to be picking up steam and G20 leaders gathering in Pittsburgh this week would strive to ensure the recovery was balanced. He said, "We are at the very beginnings of this recovery ... We need to make sure that we keep at this, so we have in place a recovery that is going to be self-sustaining, led by private demand, (and) a financial system that can actually provide the credit that is needed.”
There was some good news for New Zealand's dairy farmers which helped the NZD rally against the USD, which fell to a 13-month low. The NZD jumped against its U.S. counterpart after government data showed the island nation's current-account deficit shrank to its lowest level since 2004. The U.S. unit fell to NZ$1.3820, its lowest level in 13 months. During the U.S. session, the USD fetched NZ$1.3862, a decline of nearly 2% on the day.
The EUR hit a five-month high against sterling, pushed higher by its sharp rally versus the dollar. The European currency rose 0.3 percent on the day to 90.81 pence, its highest level since April. In earlier trade, the euro rallied as high as $1.4793, its highest level against the USD in a year.
In economic news today, expect the FOMC announcement at 2:15 pm (ET), as well as the Crude Inventory report. In earnings, Bed, Bath and Beyond is scheduled to release their numbers along with AutoZone, Comtech Communications, General Mills, Red Hat and Paychex.
Happy Trading,
James Dicks
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