mercredi 8 avril 2015
EURUSD - Trading the FOMC statement
Posted on 10:22 by nice news
The FOMC meeting minutes will be released later today, and I have to wonder what can they say.
In the statement they said:
Economic growth has moderated somewhat.
Labor market conditions have improved further, with strong job gains and a lower unemployment rate
Labor market indicators suggests that underutilization of labor resources continues to diminish
Household spending is rising moderately; declines in energy prices have boosted household purchasing power
Business fixed investment is advancing
Recovery in the housing sector remains slow
Export growth has weakened
Inflation has declined further below the Committee's longer-run objective, largely reflecting declines in energy prices.
Survey-based measures of longer-term inflation expectations have remained stable.
Inflation is anticipated to remain near its recent low level in the near term, but the Committee expects inflation to rise gradually toward 2 percent over the medium term as the labor market improves further and the transitory effects of energy price declines and other factors dissipate
The Committee continues to see the risks to the outlook for economic activity and the labor market as nearly balanced
The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.
The bearish takeaway from the last decision that forced the dollar lower was the sharp decline in the target end of year rate to 0.625% from 1.125% - even though it made a lot of sense to put it there. It was simply too high at 1.125%. Also, Janet Yellen tends to talk more dovishly as well. The EURUSD rallied nearly 500 pips. By the next day, it was down by 400 to 1.0600.
Where do we stand now and how should traders look to trade it.
For me, just because it was
In the statement they said:
Economic growth has moderated somewhat.
Labor market conditions have improved further, with strong job gains and a lower unemployment rate
Labor market indicators suggests that underutilization of labor resources continues to diminish
Household spending is rising moderately; declines in energy prices have boosted household purchasing power
Business fixed investment is advancing
Recovery in the housing sector remains slow
Export growth has weakened
Inflation has declined further below the Committee's longer-run objective, largely reflecting declines in energy prices.
Survey-based measures of longer-term inflation expectations have remained stable.
Inflation is anticipated to remain near its recent low level in the near term, but the Committee expects inflation to rise gradually toward 2 percent over the medium term as the labor market improves further and the transitory effects of energy price declines and other factors dissipate
The Committee continues to see the risks to the outlook for economic activity and the labor market as nearly balanced
The Committee anticipates that it will be appropriate to raise the target range for the federal funds rate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium term.
The bearish takeaway from the last decision that forced the dollar lower was the sharp decline in the target end of year rate to 0.625% from 1.125% - even though it made a lot of sense to put it there. It was simply too high at 1.125%. Also, Janet Yellen tends to talk more dovishly as well. The EURUSD rallied nearly 500 pips. By the next day, it was down by 400 to 1.0600.
Where do we stand now and how should traders look to trade it.
For me, just because it was
EURUSD - Trading the FOMC statement
Categories: EURUSD - Trading the FOMC statement
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