Wednesday, 14 Oct 2009

Markets Await FOMC Statement

The Dollar fell to a 14-month low against the EUR after Federal Reserve Vice Chairman Donald Kohn stated that interest rates will remain low for an “extended period”; in opposition to the more hawkish speech by Bernanke last week. Intel Corp. forecasted sales that beat estimates also helped push the EUR

The Dollar weakened to $1.4903, from $1.4854 yesterday, and after trading at $1.4913 earlier, the lowest level since Aug. 13, 2008. The release of slightly better than expected Retail Sales data from the U.S seemed to have little effect on the EUR/USD pair which is currently trading at 1.4883.

The Pound was boosted slightly today following the release of better than expected Employment data, pushing above $1.6000 level, however the pair soon retreated back slightly and currently trading at $1.5990.

Looking ahead to the rest of the day, the FOMC meeting minutes which are due to be release at 18:00 GMT today are likely to cause great volatility to the EUR/USD pair, possibly pushing it to 1.5000.