MORNING BRIEFING: US Dollar falls to 8-month low versus Yen; US GDP in focus

[RTFX-Trading]

MORNING BRIEFING: US Dollar falls to 8-month low versus Yen; US GDP in focus

What’s new:
Forex: US Dollar falls to 8-month low versus the Yen
United States: Fed officials clash on need for further stimulus
United States: Fed’s Bullard says deflation risks have risen
China: IMF says China eyes gradual fiscal exit, no need for interest rate hikes
Japan: Democratic Party wants BOJ easing, not intervention

Today:


Rates in Asia and Indices:
EURUSD: 1.3093 - 1.3047.
USDCHF: 1.0430 - 1.0388.
GBPUSD: 1.5657- 1.5598.
EURJPY: 113.80 – 112.63.
USDJPY: 86.99 – 86.25.
DowJones: 10'467.16 -0.29%
NASDAQ: 2'251.69 -0.57%
S & P 500: 1'101.53 -0.69%
Nikkei: 9'537.30 -1.64%
Shanghai: 2'639.08 -0.34%
Gold: $ 1'168.80    
Crude Oil: $ 78.19

Comments:

Federal Reserve officials clashed on Thursday on whether the central bank should be more aggressive in supporting the stumbling economy and one said the Fed's current policy may be contributing to worryingly low levels of inflation.

St Louis Fed President, James Bullard, said the Fed’s position on holding rates ‘exceptionally low for an extended period’, “may be increasing the probability of a Japanese-style outcome for the US”. He also said, the central bank should be ready to shift its focus to more aggressively pumping credit into the financial system to get the economy going if the recovery appears at risk adding that his preferred route to provide additional easing would be through buying more long-term Treasury securities.

In contrast to Bullard’s views, Dallas Fed President Fisher does not believe any further monetary accomodation would have any effect in boosting the economy, saying that the Fed had done it’s job, saying “now, it is time for lawmakers and regulators to provide clarity on what costs businesses will have to bear as a result of health care and financial reforms. Until then, US economic growth will remain sub-optimal”.

Early Friday, the US Dollar recouped some of its losses against the Euro, but remained low, near a 3-month low against a basket of currencies on concerns that US growth may be disappointingly weak. US GDP figures are expected at 1430 CET today.

Have a nice week-end

Emman Xuereb
Trading Desk
RTFX Ltd
Risk Disclaimer