MORNING BRIEFING: Dollar falls as Fed talks down further asset purchases and expectations for rate hike.

[RTFX-Trading]

MORNING BRIEFING: Dollar falls as Fed talks down further asset purchases and expectations for rate hike.

What’s new?
United States: US AAA credit rating is safe according to Moody’s Investors Service.
United States: Dollar falls on expectations that Fed talks down expectations for a rate hike this year.
Japan: Trade export slide widens.
United States: Fed Interest rate decision expected later on today at 20h15 CET.
United Kingdom: BoE Governor King to testify on 2009 Inflation Report and the Financial Crisis.

Today:
10h00 Euro zone: Current Account s.a. April, previous €-6.5B.
10h00 Euro zone: Current Account n.s.a. April, previous €-3.5B.
10h00 Euro zone: Investment Flow April, previous €71.1B.
12h00 United Kingdom: CBI Distributive Trades June, previous -17.0.
14h30 United States: Durable Goods May, exp -0.60%, previous 1.70%.
16h00 United States: New Home Sales May, exp 360’000, previous 352’000.
16h00 United States: New House Starts May, previous 0.30%.
20h15 United States: Fed Interest Rate Decision, exp 0.25%, previous 0.25%.

Overnight Rates and Indices:
EURUSD: 1.4107– 1.4063.
USDCHF: 1.0679 – 1.0649.
GBPUSD: 1.6465 – 1.6415.
EURJPY: 134.85 – 133.70.
USDJPY: 95.67 – 95.03.
DowJones: 8’322 -0.19%.
NASDAQ: 1’764 -0.07%.
S&P 500: 859 -0.23%.
Nikkei: 9’597 +0.51%.
Gold: $925
Crude Oil: $68.51
 
Comments:

The Dollar suffered huge losses yesterday against the Euro and other majors as the market expects the Fed to play destroy hopes of an interest rate hike by year end. The comments from a European Central Bank policy maker that he saw no need for policy measures at the moment to get the economy back in shape also contributed to the Euro’s gains against the greenback. The US Dollar is now trading at $ 1.4080 after reaching $1.4108 against the Euro yesterday. The Euro increased to 134.85 against the Yen this morning after reaching a high of 134.40 yesterday.

Tuesday, Moody’s Investors Service said that the US government’s AAA credit rating was safe, however could be at risk if the government isn’t able to keep public debt in check. Today, all eyes will be on the Fed’s interest rate decision and press conference. The Fed is widely expected to keep the overnight federal funds rate at 0.25%, while emphasizing it should remain at this level for some time to come.

Good Day

Emman Xuereb
RTFX Ltd
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