Forex Blog: Currency Trading News & Analysis.

October 11th 2005

Short term USD outlook depends on Fed attitude

Since the fallout from the summer hurricanes subsided, the USD has traded in very tight range. Traders seem to agree that the USD will likely remain range-bound in the short term, due to a lack of upcoming economic developments. The longer-term outlook depends largely on the actions of the Federal Reserve. While traders have already priced two additional interest rate hikes into US bonds and other securities, there is some concern that the Fed will not follow through if the economy does not appear to be as healthy as originally believed. For this reason, traders are anxiously awaiting the release of the minutes from the latest Fed meeting. The Financial Times reports:

Interest rate expectations remain a key driver for the dollar and traders are asking whether the Fed’s concerns over the inflation outlook will translate into more aggressive monetary tightening next year.

Read More: Dollar direction awaits Fed minutes

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© 2004 - 2024 Forex Currency charts © their sources. While we aim to analyze and try to forceast the forex markets, none of what we publish should be taken as personalized investment advice. Forex exchange rates depend on many factors like monetary policy, currency inflation, and geo-political risks that may not be forseen. Forex trading & investing involves a significant risk of loss.