FOMC Leaves Rate Unchanged at 0.25%
City Index April 26, 2012 1:00 PM
<p>FOMC Leaves Rate Unchanged at 0.25%. FOMC seems to be slightly more optimistic about the outlook for economic growth over the course of this year, […]</p>
FOMC Leaves Rate Unchanged at 0.25%. FOMC seems to be slightly more optimistic about the outlook for economic growth over the course of this year, adding that the committee expects moderate growth over coming quarters, before it expects growth to pick up gradually.
Euro-dollar closed in NY at 1.3218 after the rate had been bounced from session lows of 1.3173 to 1.3234 as market reacted to FOMC statement the Fed Bernanke’s press conference (viewed dovish as left open the use of QE3). The rate initially marked overnight lows at 1.3217 before edging higher, the move up influenced by early demand for euro-yen, the rate again meeting stiff headwind supply above 1.3230 as it faltered at the NY high of 1.3234. Reversal lower in euro-yen led euro-dollar back to retest lows before settling around 1.3225. Offers remain in place toward 1.3240, with further interest noted toward the reported barrier at 1.3250. Stops now seen placed on a break of 1.3255. Support remains back at 1.3180-1.3170, with stops below, with interim interest seen at 1.3195-1.3190.
Cable closed in NY at 1.6167, after the rate had bounced back from post GDP release lows of 1.6082 to 1.6183 as it took full advantage of the dollar sell off as market reacted to dovish comments from Ben Bernanke (leaves door ajar to possible QE3) in his post FOMC press conference. The rate consolidated this bounce back in Asia with trade contained within a range of 1.6159-1.6178, trading around 1.6170 into early Europe. Offers seen placed from above 1.6180 and extend toward the reported barrier interest at 1.6200 a break here to open a move toward 1.6220-1.6225. Support 1.6159 a break to open a deeper move toward 1.6135-1.6130 ahead of 1.6110-1.6100 with stronger interest remaining in place into 1.6080. Stops remain below from 1.6075 through to 1.6055.
Gold prices slumped along with the EUR on news that the Federal Reserve left the fed funds rate unchanged. However, losses were quickly trimmed as the markets reassess the Fed’s statement. In the statement, the Fed acknowledged that inflation has slightly picked up due to higher crude oil and gasoline prices. Gold jewelry demand in India remains sluggish as INR weakness lingers. The end of an auspicious session in NY for gold buying in India saw lackluster results, as a tight range held in Asia overnight 1,641.88 to 1,644.75. Resistance is seen at the 55-day moving average at 1,683.78 and then. Support comes in at 1,630.00 and 1,624.88.
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