MORNING BRIEFING: Rates to remain “very low” for “extended period”

[RTFX-Trading]

MORNING BRIEFING: Rates to remain “very low” for “extended period”

What’s new:
Forex: EURUSD pair; what’s the trend?
United Kingdom: Sterling pushed higher following election poll release.
Japan: Yen declines on encouraging earnings reports.
United States: Fed Chairman insists rates to remain low for “extended period”

Today:



Overnight Rates and Indices:
EURUSD: 1.3667 – 1.3611.
USDCHF: 1.0552 – 1.0507.
GBPUSD: 1.5523 – 1.5458.
EURJPY: 127.67 – 127.04.
USDJPY: 93.52 – 93.20.
DowJones: 11’123 +0.94%  
NASDAQ: 2’505 +1.58%
S&P 500: 1’211 +1.12%
Nikkei: 11’274 +0.61%.
Shanghai: 3’156 -0.32%,
Gold: $1’157.0
Crude Oil: $86.04

Comments:

The US Dollar fell against the Euro as Federal reserve Chairman Ben Bernanke, in a testimony before congress, restated that “very low, extremely low” interest rates will be needed for an “extended period” given current expectations for a moderate US economic recovery. Also weighing on the USD is the fact that Singapore effectively revalued its currency, and the increase in appetite for risk following more upbeat data.

Even though the EURUSD pair is locked up lately in between support and resistance levels, one can expect bulls to rush in on a breakout of a resistance level to reach new highs. A wait and see approach would be the best option for now.

The Sterling was pushed higher, after a poll released by the UK Telegraph showed conservatives would likely win an outright majority in the upcoming elections calming fears of a hung parliament and suggesting next government would tackle the fiscal deficit issue aggressively.

Encouraging earnings from JPMorgan and UPS, led risky assets higher during Asian hours, leaving the Japanese Yen to decline against most of its major counterparts. The Yen suffered as risk appetite improved.

Good Day,

Rudolf Muscat

RTFX Ltd
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