FOMC Decides Next 1% Move in EUR/USD
March 18, 2009
The Euro has surged to 1.3157, a six week high against the U.S. dollar. The currency pair’s strength is a big departure from the price action of the other majors currencies this morning, which have weakened across the board. The break of the old highs opens the door for a move above the January highs of 1.33. The FOMC rate decision will determine the next 1 percent move in the EUR/USD.
Remember, if the FOMC fails to make any new announcements, the dollar should rally, equities should sell off and bond prices should rise.
If they make the nuclear announcement of buying long term U.S. Treasuries, the dollar should sell off, equities should rally and bond yields should rise. For a more in depth outlook on the FOMC rate decision, read my FOMC Preview.
Source: eSignal
Posted in Bernanke, FOMC, Fed Rate Cut, Fed Rate Cut Expectations, Federal Reserve, Forex, eur/usd, forex blog
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March 18th, 2009 at 1:01 pm
US dollar is oversold, time for a rally!
March 18th, 2009 at 2:57 pm
I should has said FOMC decides next 5% move in U.S. dollar
March 18th, 2009 at 3:38 pm
with eur/usd over 1.34, is this temporary strength or long term in your opinion?
March 18th, 2009 at 3:40 pm
“If they make the nuclear announcement of buying long term U.S. Treasuries, the dollar should sell off, equities should rally and bond yields should rise.”
You did it again Kathy. My sweeheart!
March 18th, 2009 at 4:00 pm
Will the EU respond with a beggar thy neighbor move to weaken the Euro?
March 18th, 2009 at 6:43 pm
ECB is not in the same boat quite yet but eventually we will get to the point where everyone is printing money which is why the big winner in all of this is GOLD!!!
March 18th, 2009 at 9:28 pm
Several recent articles have posited the NOK as a safe haven currency. Researching this, I find a rare dual surplus status (+18% curr acct, +19% budget balance), rarer still a growing economy, one of the lowest sovereign cds rates in the world, and a huge gov pension fund. oil contango has disappeared, leaving oil to appreciate.
lest you think it too small a country, its GDP is roughly 50% larger than CHF, which used to enjoy risk haven status.
currently $/NOK at 6.52 (dropped from 6.73 today), its still 20% above its post meltdown averages of 5.5
I am thinking of a long-dated (think December) put bear spread, selling the 5.7 strike, buying the 6.3 strike for a 2.5:1 reward/risk ratio.