The greenback is still suffering across the broad from the Fed' aggressive action announcement of buying 600B of the US treasuries till the end of June 2011 keeping its mortgages baked securities buying program at its same rate which is about 35B$ a month currently making the total planed pumping funds about 880B$ in this mentioned period backing its decision again to the weakness of the economic growth and the labor market currently and the weak inflation pressure. The decision was with the same opposing of Kansas Fed governor Mr. Hoening who was worried again about the inflation over the long term.

The market was waiting for pumping from 300B$ to 500B$ but the 600B$ came as a shock to the greenback which is still suffering selling off since the decision until now. The cable is trading above 1.615 and the single currency could cross above 1.417 trading above 1.42 which can open the way to further rising to 1.458 whereas the lower high which has been formed on 13 Jan 2010 on the pair way ...

for bottoming at 1.1876 on 7th June this year amid the debt crisis which effected negatively on the single currency which is expected now to get use of this decision again more than the other major currencies and specially the British pound as the market is waiting to have a similar action from BOE following the Fed in its easing policy with no focusing currently on the debt worries in the Euro zone.

The US equities markets could easily keep its gains after the Fed decision which can support the dividends keeping pressure further on the greenback value from another side facilitating the borrowing which can underpin the economy in a new second big round of the Fed's Quantitive easing policy for stepping up the growth rates back again gaining momentum after fading in the second half of this year.

The Gold has been pushed up to trading currently above 1360$ again fueled by expected rising demand for the commodities and the energy which have been underpinned after the fed's decision too which has been read as a devaluation of the greenback value by an indirect way while the Asian currencies and the Aussi may have further rising on the interest rate for cooling the prices which can push them up.

By God's will, the market focusing is expected to turn to October release of US non-farm payroll tomorrow which is expected to show rising of 60k after falling in September by 95k while it is expected to listen today to Trichet's press conference after the ECB meeting which is not expected to come with any new action currently.

Best wishes


FX Consultant

Walid Salah El Din

E-Mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

http://www.fx-recommends.com