Today the Federal Reserve concludes its two-day policy meeting, and all eyes will turn to the statement that will be released later in the day and the first-ever press conference that Bernanke will hold following the FOMC meeting.
Markets are expecting the Feds to take more actions to support the economy. Although the interest rate is expected to be held between 0.0% and 0.25%, the Feds may signal additional quantitative easing, as the 600 billion dollars bond-buying program will end in June.
If the Feds will come out with a strong statement today, markets could face swift movements. However since some companies reported better than expected earnings, sentiments improved today and markets were calmer.
Awaiting the statement, the dollar index dipped to a 16 months low at 73.48 allowing the euro to rise to rise to the highest of 1.4715 although the German data came out disappointing.
The pound rose to the highest of 1.9573 after the British economy reported growth in the first quarter. As for the Aussie, it hit a new 29-year high against the dollar as gold continues to trade near record highs while the economy reported higher inflation in the first quarter.
The yen weakened today after S&P cut Japan’s debt outlook and lowered the outlook on Japan to AA- on higher construction costs. Oil is hovering near its lowest in a week around the $112.00 per barrel, as markets expect a rise in inventories which could signal lower demand on crude.
Originally posted here
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