titleForex Trading and a New Dollar/Yen Target?/titlecategory3/categorybSo the US Federal Open Market Committee (FOMC) has come out with another rather expected statement. They have told us very little that we did not already know. In short the Federal Reserve will continue to reinvest the repayments from the $1.4 trillion of mortgage debt that it has already bought and will plough it back into US government bonds. So there’s little change to the US quantitative easing program./b
In addition, the FOMC has maintained its commitment to keep Interest Rates just above zero for an extended period of time. Given that the financial markets expected this and there was no ‘new’ news, the overall effect on the equity markets was minimal.
Perhaps it’s not a surprise but there was not much of a reaction in the a href=http://www.cleanfinancial.com/forex_spread_trading.php target=_blank title=Forex Spread Tradingforex spread trading/a markets either. Normally a statement saying we are keeping interest rates low for an extended period of time would harm the currency of the country in question.
Whether you are day trading, a title=CFD Trading href=http://www.cfd-trading.co.uk/blogtrading CFDs/a, trading stocks and shares or forex trading note that the global markets are expecting US Interest Rates to stay between 0.25 and 0.75% for quite some time.
Of course that’s still higher than the Japanese Interest Rate which has been maintained at 0.1% for quite some time. If there is a medium term target for the forex markets it could be in the Dollar/Yen market.
According to Simon Denham of a href=http://www.cleanfinancial.com/financial_spread.php target=_blank title=Financial SpreadFinancial Spread/a, Even with the Bank of Japan announcing that it would increase lending to commercial banks by 10 trillion Yen (pound;75 Billion) in an attempt combat the rising value of the currency the Yen is still trading in the yen;83.00-yen;84.00 area. Now that the Bank of Japan has shown its hand, a fall to the lows of yen;80.00 last seen in 1995 could be a reasonable medium term target.