Forex Investment and Currency Trading

The next instalment of the Federal Open Market Committee (FOMC) interest rate decision will be delivered on August 12. However, as has been the case in the past, with the Fed explicitly committing itself to keeping interest rates “exceptionally low” for an extended period of time, the actual interest rate announcement is unlikely to attract much attention. Instead, the focus will undoubtedly be on the tone and content of the statement. In terms of the economic and inflation outlook, analysts expect the economic assessment to perhaps offer some acknowledgement of the improvement in the economic outlook, and maybe note that the [...]

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Fed to buy $300 bln of long-term Treasuries and an additional $750 bln of of agency MBS in order to keep long-term yield very low.  10 year Treasury yields are  down 45bps from 3.00% to 2.55% and the USD has fallen by 250 pts vs the EUR.  Watch for a lot more USD weakness in coming days. 
The FED finally shoots the bullet of full on quantitative easing by promising to buy $300 bn of US Treasuries over the next 6 months.  They also plan on extending more buying of MBS and highlight the TALF.  The trouble with the move is [...]

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This afternoon all eyes will be on the FOMC’s next interest rate decision at 2:15PM. The big speculation over the last few days has been if the Fed is going to announce the purchase of Treasury securities. However, some think that’s unlikely to be the case, since most FOMC members have
clearly back-pedalled away from that option over the last few weeks. The general consensus (aside seems to be that the Fed would like to wait and see how the TALF (which is getting up and running this week) works out before reconsidering purchasing Treasurys. Here’s a sample of some recent comments [...]

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Governments everywhere are trying desperately to stabilize the global economy and financial system, but what may not be fully appreciated is the severe trauma that has hit the US household balance sheet – $20 trillion of net worth destruction that is very likely going to trigger a multi-year reassessment of the cash flows that the boomer population is going to require to cover its post-retirement quality of life. The supply of bonds is rising sharply, to be sure, but do not underestimate
what the demand for income-bearing securities is going to look like in the future. Just as long bond yields [...]

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