Fed Cuts Interest Rates, USD Sold

Daily Forex Fundamentals | Written by Easy Forex | Oct 30 08 01:24 GMT |

U.S. Dollar Trading (USD) the Federal Reserve wrapped up its 2 day meeting with a statement that it was cutting rates to 1.0% from 1.5% and that the door was open for more cuts as the US economy slows. Durable goods in September unexpectedly rebounded higher to 0.8% vs. -1.5% expected. The USD is undergoing a correction lower after weeks of solid gains. In the U.S. share markets, the NASDAQ was up 7.74 points (0.47%) and the Dow Jones was down 74 points (-0.82%). Crude Oil closed up $4.77 ending the New York session at $67.50 per barrel. Looking ahead, all eyes will be on the US Q3 GDP advanced forecast figures expected at -0.5% vs. +2.8% in Q2. Also released, weekly Jobless Claims are expected at 475K vs. 478K previously. The Euro (EUR) took advantage of the weakening USD breaking through resistance at 1.28 on its way towards a retest of the now key level at 1.3000. The Stock market recovery helped to underpin an improving risk sentiment in the market that had been shattered over the previous month. Overall the EUR/USD traded with a low of 1.2628 and a high of 1.2992 before closing the day at 1.2955 in the New York session. Looking ahead, German Unemployment Change is expected at -10K vs. -29K previously. Also released, October Eurozone Consumer sentiment is expected at -20 vs. -19 previously. The Japanese Yen (JPY) after the largest one day fall yesterday against the USD, the Yen strengthened against a softer USD. Most crosses were able to continue to make gains though as risk sentiment recovered and stocks were relatively buoyant and stable. Preliminary Industrial Production was better than expected at 1.2% vs. 0.5% expected. Overall the USDJPY traded with a low of 96.10 and a high of 98.28 before closing the day around 97.30 in the New York session. The Sterling (GBP) broke above 1.6000 and surged higher as the beaten down Cable rose from the dead. It took the 10 day moving average all the way up at 1.6475 catching a lot of the market wrong footed. BoE Member Blanchflower was quoted saying the BoE needs to cut rates 'significantly and quickly'. Overall the GDP/USD traded with a low of 1.5940 and a high of 1.6475 before closing the day at 1.6370 in the New York session. Looking ahead, Nationwide House prices are expected at -1.5% in October for a -14.6% Y/Y total. The Australian Dollar (AUD) pushed the recovery envelope past resistance at 0.6500 pushing all the way up to resistance at 0.6800. A strong showing in Asian and European stocks and stronger metal prices combined to create stronger platform for the AUD to combat risk aversion in the market. Overall the AUD/USD traded with a low of 0.6339 and a high of 0.6795 before closing the US session at 0.6700. Gold (XAU) grinded higher as the USD was sold and Oil crept higher. Overall trading with a low of USD$738.50 and high of USD$773.4 before ending the New York session at USD$756 an ounce. Easy Forex http://www.easy-forex.com Easy-Forex makes no recommendations as to the merits of any financial product referred to in this website, emails or its related websites and the information contained does not take into account your personal objectives, financial situation and needs. Therefore you should consider whether these products are appropriate in view of your objectives, financial situation and needs as well as considering the risks associated in dealing with those products