Wednesday, 24 Jun 2009

Markets Await the FOMC Statement.

The U.S market opened today with the release of the Core Durable Goods Orders. The actual result was 1.1%, much better result than the expected -0.2%. This signals that the economic conditions in the U.S are improving; rising purchases orders is a good indicator for increased future production, as manufacturers will need to fill the extra demand.

The release had little immediate effect on the USD and its main currency pairs as investors await the FOMC statement. It did, however, have a big effect on Oil prices as the price jumped from 68.46 to 68.80. Several important indicators are set to be released today, including the New Home Sales at 14:00 GMT as well as the Crude Oil Inventories at 2:30 GMT which promises a volatile trading day. However the most anticipated event today is the Federal Reserve's Open Market Comity statement and Federal Funds Rate release due at 18:15 GMT. The FOMC statement discusses the current economic conditions in the U.S that affected their decision regarding the interest rate as well as future economic outlook and clues to future rate decisions. Although the Interest Rate is expected to remain unchanged at 0.25%, the statement release is expected to have major effects on the USD and its major currency pairs, possibly straightening the Dollar. The statement release is also likely to have a major effect on equity markets and commodities prices, particularly Oil, as it is highly correlated with Dollar strength and equity levels.