FOMC Meeting: EURUSD, the movements following the announcement.

[RTFX-Trading]

FOMC Meeting: EURUSD, the movements following the announcement.

June 24th FOMC Meeting Statement: EURUSD fell from 1.4100 to close at 1.3929 after reaching 1.4138. From 1.3929 recovered to close at 1.4082 after 3 days.

-    Kept rates unchanged at 0.25%
-    Pace of contraction of economy is slowing.
-    Conditions in financial markets have generally improved in recent months.
-    Household spending has shown further signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit.
-    Businesses appear to be making progress in bringing inventory stocks into better alignment with sales.
-    The prices of energy and other commodities have risen of late.
-    substantial resource slack is likely to dampen cost pressures, and the Committee expects that inflation will remain subdued for some time.

April 29th FOMC Meeting Statement: EURUSD increased from a low of 1.3120 to 1.3386 during the next trading day, fell back to 1.3199, after which resumed its uptrend and closed at 1.3406 after 3 days.

-    Kept rates unchanged at 0.25%
-    Economy continues to contract.
-    pace of contraction appears to be somewhat slower.
-    Household spending has shown signs of stabilizing but remains constrained by ongoing job losses, lower housing wealth, and tight credit.
-    Weak sales prospects and difficulties in obtaining credit have led businesses to cut back on inventories, fixed investment, and staffing.
-    The economic outlook has improved modestly since the March meeting, partly reflecting some easing of financial market conditions, however economic activity is likely to remain weak for a time.
-    In light of increasing economic slack here and abroad, the Committee expects that inflation will remain subdued.

March 18th FOMC Meeting Statement: EURUSD rose from 1.3000 to 1.3738 in 2 days, was followed by a Harami the following day, which led to a drop to 1.3485, and closed at 1.3620 after 3 days. After which downtrend resumed.

-    Kept rates unchanged at 0.25%
-    Economy continues to contract.
-    Job losses, declining equity, housing wealth & tight credit have weighed on consumer sentiment & spending.
-    US exports slumped, as trading partners have also fallen into recession.
-    anticipates that policy actions to stabilize financial markets and institutions, together with fiscal and monetary stimulus, will contribute to a gradual resumption of sustainable economic growth.
-    inflation will remain subdued.
-    Increased purchases to $750B in securities, to a total of $1.25 Trillion this year.
-    increased its purchases of agency debt this year by up to $100 billion to a total of up to $200 billion.
-    to help improve conditions in private credit markets, the Committee decided to purchase up to $300 billion of longer-term Treasury securities over the next six months.
-    The Federal Reserve has launched the Term Asset-Backed Securities Loan Facility to facilitate the extension of credit to households and small businesses and anticipates that the range of eligible collateral for this facility is likely to be expanded to include other financial assets.

Jan 28th FOMC Meeting Statement: EURUSD dropped from 1.3300 to 1.2706 in 3 days! Closed at 1.2844 after 3 days.

-    Kept rates unchanged at 0.25%
-    Economy weakened further.
-    Industrial production, housing starts,& employment continued to decline steeply.
-    Consumer & businesses cut spending.
-    Credit conditions remain extremely tight.
-    Committee anticipates recovery will begin later in the year, however downside risks are significant.
-    Will employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability.
-    continues to purchase large quantities of agency debt and mortgage-backed securities to provide support to the mortgage and housing markets.
-    prepared to purchase longer-term Treasury securities if evolving circumstances indicate that such transactions would be particularly effective in improving conditions in private credit markets.

Nicolas Longchamp
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