The USD decreases after the Fed’s comments
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The United States currency decreased a bit in relation to other major currencies throughout the morning forex trading session in Sydney due to the outlook for the weak US economic data and announcements by the Federal Reserve chairman – Ben Bernanke and the president of European Central Bank – Jean Claude Trichet.
So the USD was traded at 105.27 Japanese Yen and the Euro – at $1.5557.
Furthermore the US ISM manufacturing is to be issued and according to the experts expectations it will provide a certain direction to the market instead of the current uncertainty.
Another groundbreaking point may be the comments on Tuesday from the Federal Reserve chairman concerning the end of rate cutting period. However the comments from the ECB President are expected on the same day, according to experts these comments will finally show us the shift of the ECB primary concerns from inflation to economic growth.
A senior financial analyst from the Global Forex Trading – Ian Copsey supposed there are still problems with economic growth in the Eurozone and the behavior of the ECB’s officials seems to be premature. He added that the slowdown in the Europe appears after the opinion that the US economy has already reached its bottom and contributes to the change of the forex markets trends.
The US ISM manufacturing data is supposed to be positive in contrast to German industrial production data that will likely be low. Anyway these numbers will play an important role in forming market directions.
Due to Ian Copsey the market is not quite confident it the US currency and such situation is likely to last for 1-2 weeks more.
According to John Noonan – a senior forex analyst at Thomson IFR Markets last week the USD was supported by the investors due to their belief in the fact that the US economy becomes quite strong to afford the Federal Reserve to increase interest rates to prevent the growth of the inflation without any worries to affect the country’s economy in negative way.
