U.S. Rates Remain the Unchanged
26-01-2012
Big news out of the United States took place yesterday during the FOMC Press Conference. Fed Chairman Ben Bernanke announced that interest rates will remain at 0.25% and will probably not change until at least 2014. This announcement came after the conclusion of a two day policy meeting which saw law makers still frustrated over the slow recovery of the economy. The EUR/USD is up this morning by 0.122% and trading at 1.3123. The GBP/USD is up as well by 0.061% and trading at 1.5667.
Dollar resurgence
The USD gained ground against some major currencies this morning, after falling sharply due to the announcement by the Federal Reserve that interest rate will remain unchanged. The main reason for the turnaround was the quantitative easing tactic employed by Fed Chairmen Bernanke. Quantitative easing is where the central bank buys assets from commercial banks, thereby flooding the market with liquidity. Gold and oil prices were pushed up by this monetary policy, with gold up this morning by 0.66% and valued at 1711.35. Oil is at 100.16 USD per barrel, an increase of 0.76%.
U.S. Reports
Today is shaping up to be interesting in the United States with traders keeping an eye out for three major reports. The Core Durable Goods Orders will be released at 1:30pm EST. This report highlights the change in total value of new purchase orders for durable goods. At the same time, the all-important weekly Unemployment Claims will be made available. Here we can find the total amount of people who have filed for unemployment for the first time in the United States. Last week’s report was better than expected, coming in at 35 thousand less than predicted. The final report is scheduled for 3:00pm EST and shows the number of new homes purchased. In the previous month, The New Home Sales came in as expected.
Mixed results for stocks
The stock market is still trying to sort itself out a day after the markets learned that American interest rates will likely remain the same until 2014. The US SPX 500 and the US 30 are up this morning, with the former at 1326.06 and the latter at 12758.85. Euro indices are down in early trading, with the FTSE dropping by 0.45% and currently sitting at 5723.00. The Nikkei did not respond well to the Federal Reserve statement, down by 0.37%. The Hang Seng reacted quite differently, up by 1.13% in the early morning.
