Forex rebates on every trade - win or lose!

Cheers prods.
Closed out at 18808, but waiting to wade in again - I may be wrong on this leg, but Asia hasn't got out of bed yet.

USD very strong after FOMC, where now?

DAILY PICKS Tuesday, March 22, 2005 21:02 GMT Daily Report By Forex Grand Capitals http://www.ForexGrandCapitals.com   King of spring...?! Mr. Greenspan keeps "measured" in the speech, yet the USD rallies. Whatever. Will hold both existing longs USD/JPY already opened within the last 36 hours, and one more buying bait placed at higher altitude. The USD players now have a direction and an opportunity. If momentum accelerates too, then no more sleeping pills I guess. A successful knock-knock of USD/CHF nearby 1.20 on a weekly chart though remains key.

Mihai Nichisoiu - Chief Trader - Forex Grand Capitals: Forex Signals and Managed Accounts http://www.ForexGrandCapitals.com Email Address: Info@ForexGrandCapitals.com

Forex - Dollar shakes off losses after U.S. rate hike - UPDATE 4
AFX


NEW YORK (AFX) - The dollar threw off losses to trade higher Tuesday, after the Federal Open Market Committee ordered a widely anticipated rate increase and issued a policy statement some viewed as unexpectedly hawkish.

The euro in late afternoon was at $1.3055, down 0.8 percent on the session, as the dollar rose 0.4 percent to 105.66 yen. Before the FOMC announcement the dollar was lower against both currencies.

The FOMC lifted the fed funds target rate by a quarter point to 2.75 percent, as widely expected.

In its latest policy statement, the committee indicated that inflation pressures are mounting. Some observers interpreted the statement about inflation as a signal the central bank could embark on a more aggressive course of rate increases.

'Though longer-term inflationary expectations remain well contained, pressures on inflation have picked up in recent months and pricing power is more evident,' the FOMC said.

'The rise in energy prices, however, has not notably fed through to consumer prices,' the statement continued.

The FOMC also called its monetary policy stance 'accommodative' and said this 'accommodation' could be removed 'at a pace that is likely to be measured.'

Refco Senior Currency Analyst Mike Malpede said the references to inflation initially were viewed as unexpectedly hawkish.

But he cautioned that investors may well come up with alternative views of the statement as they continue to scrutinize its details throughout the week.

'The bottom line is the Fed left the door open for more rate hikes,' Malpede said. 'The Fed indicated that there is inflation risk and the risks could be balanced, if the Fed takes appropriate action.'

Bank of New York Senior Currency Strategist Michael Woolfolk said market players chose to view the references to inflation 'to mean that the Fed is likely to continue raising interest rates higher than expected this year against a backdrop of strong U.S.economic growth.'

Earlier Tuesday the dollar was pressured by news that a surge in energy prices pushed the U.S. producer price index for finished goods up 0.4 percent in February.

Excluding big increases in food and energy prices, the core PPI increased 0.1 percent. Economists were forecasting a 0.3 percent gain in the PPI and 0.1 percent in the core rate.

On Wednesday the market will focus on consumer price data for February. The average estimate of economists polled by MarketWatch is for a 0.3 percent increase in the headline index, alongside a 0.2 percent advance in the core rate.

Existing home sales figures for February also are due Wednesday. MarketWatch forecasts 6.69 million sales.

Overnight in Tokyo, the minutes of the Bank of Japan's Feb. 16-17 policy board meeting were released Tuesday, and showed that board members again discussed reducing the account balance target in light of weak fund demand from banks.

The balance of current account deposits held by private financial institutions at the central bank is its primary tool for keeping lending rates near zero. It is now kept in a range of 30 trillion to 35 trillion yen.

This year, the BOJ's open-market operations have sometimes met with bidding shortfalls. A cut in the target balance to address this would effectively be the first tightening of monetary policy since August 2000 -- but analysts say the Bank of Japan would be careful not to describe it as such to markets.

The point is moot for the time being. The minutes of the latest meeting showed that all members agreed that the liquidity target shouldn't be touched for a while, as the Japanese economy appears to be pausing.

This story was supplied by MarketWatch. For further information see www.marketwatch.com.

DAILY FX MARKET ALERTS

Tuesday, March 22, 2005 19:31 GMT Daily Report By Fxtodayhttp://www.fxtoday.co.uk

Latest currency alerts

23-03-05. As expected, the Fed increased interest rates by 0.25% to 2.75%. It also retained the expectation that interest rates can be raised at a measured rate. This will dampen expectations that the Fed will tighten more aggressively. This should stem profit taking in high-yield currencies and should also lessen the potential for short-term dollar buying, although the immediate market action has been to strengthen the dollar.

Just when I thought I'm getting my head around what drives the market the Dollar strengthens when I thought it would weaken after Greenspam's statement. Or am I missing something? They're suggesting inflation might rear it's head, interest rates increased, both mean consumer demand reduces, DOW dives today as a consequence.

I suppose the dollar strengthening is bad news for Oil prices in the rest of the world but is it good news for the US? It is certainly bad news for oil prices in the rest of the world.

Sorry, just having a waffle - shows my limited grasp of the forex mkt at the moment.

Would any of the gurus have a look at GBP/JPY please. Looks to me to have turned - a good 700 points available?

edit - will wait for a little bounce up to say 200.00 before considering a short.

It strikes me that the Asians didn't have a clue what to do with the Dollar overnight, so they left it alone until London had worked it out and concentrated on the Yen instead.

Seymour,

Concur re the Sterling Yen and Euro Yen which had been offering some support also looks to have turned now.

Re oil, I wouldn't worry too much atm. The concept is that oil drives the Dollar and Yen, rather than the other way around. Generally high oil = weak Dollar, but the FX market seems more concerned about the twin deficits and the interest rate differential/carry trade aspect atm. They'll probably wait until the driving season looms a bit closer before worrying too much about oil again.

Thanks Hilary - I really appreciate it.

Seymour,

Although the GBP and EUR/JPY shorts do look to offer high potential, you should be aware of the high carry costs because of the BoJ next-to-zero interest rate policy. Sterling will probably cost you around 3.5 to 4 pips each night. For that reason alone, you may well see some players sidelined till after Easter.

Talking of Easter, I'll be away skiing next week. The Daily FX weekly calendar gif which is in the thread header currently has the URL of

http://www.dailyfx.com/images/stories/Calendar/calendar03-18-05.gif

On the assumption that next week's calendar will be obtained by adding 7 days, will one of the am moderators be able to alter the thread header accordingly please?

Have a good break Hilary - hope the skiing is excellent. I am away as well so won't be making any trades. Might be worth emailing one of the moneyam staff.

Just closed EUR/USD short from this morning for +47, which was nice

Good trade, jeffmack. I had a short on Cable from 855 and closed it for +12 on an oco, only to come back and see it had dropped another 50, and promptly lost it by shorting right on the turn at 91. Looks as if they may both be turning down again, though.

Well I've not known what to do for the best with the Europeans this morning, so instead have been running Dollar longs on USD/CAD and AUD/USD.

edit: Just closed the Loonie ..... in 2 minds on the Aussie.

Stuck with cable last night, and still running it.

Just closed it all again 18710 - time to stand aside and see how the land lies later. :)

Bloody hell, what happened to /Y - I opened a short at 19870 this morning, went out for a few hours, and it's 100 lower ! Not complaining of course. Was that just the CPI data, or has something else added to the weakness.

Thanks Hil, belatedly, for the heads up on the /Y opportunity.

chocolat,
Drinks on you then..:-) well done! must be at least 3X my puny effort
Stopped out for +100 cable short on the back of sacrificial long EUR/USD, -30. I love it when a plan comes together...

EDIT.

Now home from work

BUGGER! Counting unhatched chickens is clearly a talent, a spike which isn't on the charts I can view from work killed my cable short for a loss.....gutted!

Perhaps I should re-phrase, I'd love it if a plan came together...:-((

Only possible saviour is EUR/CAD short @ 821, fingers crossed it will save me from my own big mouth.

Hil,

Email en route.

D.