Did the Fed meet the market’s expectations for greater accommodation? A forecast of virtually-zero interest rates through the end of 2014 does not have the same level of amperage that a wholesale asset purchasing program (long ago given the moniker ‘QE3’) would.
The dollar weakened and world stocks rose on Wednesday after the US Federal Reserve extended its pledge on maintaining interest rates at ultra-low levels until at least late 2014, much later than markets had expected.
The UK joined the exclusive club of countries that are able to raise money at negative interest rates. On the other hand, the deleveraging process has skipped this country, despite all the austerity
Sales of previously-owned homes accelerated for the third straight month in December as record-low mortgage interest rates, job growth and bargain home prices encouraged more median-income consumers to achieve their homeownership dreams.
As expected, the ECB decided not to touch interest rates at its meeting during the week. This makes a lot of sense in our eyes. The eurozone may be in recession, but it is only a mild one and should prove short-lived.
While voting unanimously to keep interest rates and QE as they are, The Bank of England warned of contagion in Europe and kept open the option of additional future QE measures…
Lower Australian interest rates combined with a rise in the US dollar as the euro sinks have dragged the Australian dollar below parity.
Many traders understand the mannerism in which interest rates affect the FX Market. In many cases, Higher-Yielding currencies can attract additional capital flows and, in turn, appreciate in value. This is often referred to as ‘The Carry Trade.’ But few traders know the full extent of the relationship between interest rates and currency prices
The Australian dollar bounced back from a fresh monthly low of 1.0052, but the high-yielding currency may face additional headwinds over the following week should the central bank talk up speculation for lower interest rates.
The Canadian dollar firmed up going into the second full week of November, but a soften inflation report could spark a selloff in the loonie as it heightens the risk of seeing lower interest rates. Indeed, the rebound in market sentiment led the USD/CAD to pare the advance to 1.0265, and the exchange rate may extend the sharp reversal from the previous month should the rise in risk appetite gather pace.
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