3/15/2010 05:00 am: EUR/$..1.3720 $/JPY..90.75 GBP/$..1.5088 $/CHF..1.0608 AUD/$..0.9134 $/CAD..1.0186
On the Verge- Markets Await Policy Shifts by
Michael BoutrosAsian markets were mixed early in London trading today as investors await several key events this week, including rate decisions from the FOMC and the Bank of Japan, as well as minutes from the latest Bank of England meeting. Although no change is expected, analysts will be once again paying close attention to the language used in the FOMC statement. Voting results will also be securitized after Fed President Thomas Hoenig made public his concerns about the deficit, and its potentially toxic effects on Fed objectives. Reports are also circulating that San Francisco Fed President Janet Yellen will be called upon by President Obama to be the next vice chairman after Donald Kohn retires in June. Speculators are poised to act, as market participants anticipate how the Fed's policy may be influenced by Yellen's aggressively dovish policies. Given expectations for a low interest rate environment to continue for an extended period, the US equity markets are likely to see considerable advances to the detriment of the dollar.
Euro Rally
The euro staged a considerable rally on Friday, breaking through the 1.37 handle before testing key resistance at 1.3780. January showed record increases in industrial production, increasing risk appetite and triggering short coverings. EU finance ministers meet in Brussels today as market participants wait to confirm talks of a possible 25 billion euro bailout for debt laden Greece. Recent violent protests in the country may work in Greece's favor, as strikes to the newly announced austerity measures are seen as a testament to the government's resolve. The single currency drifted sideways in early in London trading, ranging between 1.3730 and the 1.3780 resistance. A break beneath the 1.3680 monthly pivot could derail the euro's recent rally. Support lies at 1.3640, followed by 1.3530, and the 1.35 handle. Past 1.3780, resistance lies at the 1.38 figure backed by 1.3850. Ultimately, advances past the 161.8% Fibonacci extension taken from the Dec 22nd and Mar 2nd troughs at 1.3980, would put the euro bulls in control.
This article contains the following sections:
Euro Rally
Aussie Stand Still
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