Intraday Market Thoughts

Archived IMT (2010.09.21)

by Ashraf Laidi
Sep 21, 2010 20:03

THE SUSPENSE IS GONE; The Fed did what the market expected it to do and the US dollar did not breathe. FOMC did NOT implement new asset purchases but opened the door for such action by saying it is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation over time. The FOMC added: Employers remain reluctant to add to payrolls. Housing starts remain at a depressed level. Bank lending has continued to contract Such a remarks are considered as a DOWNGRADE of economic conditions. Hence, FX traders did NOT BOTHER buying the USDX because additional QE is a question of When and not if. EURO FINALLY breaks above its 200-day MA against USD, joining the other major currencies, which have already done so to their respective 200-day MA against the USD. With strong Irish bond auctions today and one foot of the Fed in QE territory, hedge funds and momentum traders will have incentive to drive up EURUSD back to $1.3330 just as SILVER TRADERS will seek to retest the $21.30 high from March 2008 as GOLD HITS NEW HIGH at $1288.60/oz.. The FRUSTRATIONS OF THE JAPANESE GOVT must be especially rising as the Feds downgrade of its outlook drags down USDJPY to 84.99, but yet cannot intervene because the Japanese currency is in fact FALLING against all other currencies. USDCHF plunges back below parity as warned last week when I reiterated that 1.0170s remain a ceiling and sub parity is inevitable. USDCAD seen supported at 1.0220,, whike EURNZD seen retesting 1.8120. ARABIC SPEAKERS here is MY ARABIYA INTERVIEW earlier today on FOMC, USD, Commodities


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