USD Strengthens After FOMC

Daily Forex Fundamentals | Written by Easy Forex | Jan 29 09 01:38 GMT |

U.S. Dollar Trading (USD) was sold most the day as equities around the world rallied on news that the Obama Administration would be looking to create a bad bank to hold toxic assets. The losses were reversed after guidance from the FOMC that buying of US treasuries from the FED was not a sure thing. Crude Oil closed up $0.35 ending the New York session at $41.93 per barrel. In US share markets, the Dow Jones gained 200 points or 2.46% and the NASDAQ gained 53 points or 3.55%. Looking ahead, December Durable Goods are expected to drop -2% vs. -1.5% previously. Also released, December New Homes Sales are forecast at 0.4m vs. .407m previously. The Euro (EUR) retested the 1.33 key level but was rejected quite violently as the FOMC statement helped the USD. Weighing intraday was weaker than expected German CPI in January at -0.5% vs. -0.3% forecast. Overall the EUR/USD traded with a low of 1.3104 and a high of 1.3328 before closing the day at 1.3160. Looking ahead, German Unemployment is forecast at 7.7% vs. 7.6% previously in January. Eurozone December Private loans is forecast at 6.5% vs. 7.1%. The Japanese Yen (JPY) was sold across the board as risk sentiment improved and the market bought up high yielding currencies. USD/JPY jumped above 90 as Equities rallied into the US session and extended gains after the FOMC minutes. Overall the USDJPY traded with a low of 88.91 and a high of 90.76 before closing the day around 89.20 in the New York session. UPDATE Japan Retail Sales dropped -2.7% vs. -1.6% forecast. The Sterling (GBP) pushed higher after tripping stops above 1.4250. The market was very bullish and tested supply at 1.4350 that held until the late USD forced some profit taking. Overall the GDP/USD traded with a low of 1.4128 and a high of 1.4374 before closing the day at 1.4240 in the New York session. Looking Ahead, January House Prices are forecast to fall -1.7% vs. -2.5% previously, expecting a -16.7% Y/Y drop. The Australian Dollar (AUD) tracked the Euro higher in a move that has recently seen the AUD dubbed the ‘fast Euro’. Selling interest above 0.6700 proved strong headwind the pair slumped back to low 0.66 after the FOMC statement. AUD/NZD jumped higher to 1.27 as the market Dumped the NZD after the RBNZ cut rates by 1.5% in early Asian trading. Overall the AUD/USD traded with a low of 0.6597 and a high of 0.6730 before closing the US session at 0.6660. Gold (XAU) paused at the $900 an ounce level while the market continued to consolidate the recent rally. Overall trading with a low of USD$883 and high of USD$903 before ending the New York session at USD$888 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