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ta fx fairy from a pleasantly warm spain, have a good week all

goforit: you're welcome, as are all the intrepid FXers. I think our Hil is in Spain this week as well.

MM.

Expect Hils taking it abit more leisurely than I've been. Do you know which part of spain she's gone to? Been helping a friend set up for a concreting job over the wkend that he's doing next week up on the campo. It only got upto 33c today(36 yesterday), we unloaded over a ton of cement about 3pm, pleased he didn't have room for the other ton because I was F....D! Certainly lost a few lbs until we had lunch!

Thanks Dezza :)

Don't you just love the name Swonk ...


No consensus on Fed's next move on rates
AFX


JACKSON, Wyo. (AFX) - After two-plus years, is the pain from the long march of higher interest rates over for good? Borrowers finally got a reprieve this month when the Federal Reserve decided to halt a campaign that produced the longest stretch of rate increases in recent history.

Where the Fed is headed next, at its next meeting Sept. 20 and later, generated chatter on the sidelines of economic conference that focused on globalization. Outside the meeting, talk turned to how the Fed chairman, Ben Bernanke, and his colleagues at the central will steer the course of interest rate policy.

The goal is to lift rates enough to subdue inflation, but not so much that the strategy would cripple the economy.

It's a tricky task.

While the economy is slowing, inflation is outside the comfort zone of some economists and Fed policymakers.

At its last meeting, on Aug. 8, the Fed held steady at 5.25 percent an important rate. As a result, commercial banks' prime interest rate -- for certain credit cards, home equity lines of credit and other loans -- stayed at 8.25 percent.

Given that the housing market is losing more steam and companies are showing caution in hiring, some economists at the conference said the Fed should keep to the sidelines in the months ahead. That would give policymakers time to assess how the most recent moves in a rate-raising campaign that started in June 2004 are affecting economic activity.

Diane Swonk, chief economist at Mesirow Financial, believes the Fed will not change rates in September. Adds a former Fed governor, Laurence Meyer, 'I think they will stay on the sidelines for a while.'

If the economy continues to lag, Swonk said there is a chance the Fed might cut rates in December or early next year.

Options include:

--boosting rates to fend off inflation.

--cutting rates to shore up a wobbly economy.

--holding rates steady, which gives policymakers time to assess which risk is greater, inflation or a weakening economy.

Allan Meltzer, a professor at Carnegie Mellon University, questioned whether it was wise for the Fed to halt its credit-tightening campaign with inflation on the rise. 'The Fed may be on the verge of a very big mistake,' he suggested.

Meltzer is concerned that inflation could creep higher and that the Fed might lose some of its inflation-fighting credibility with investors. Then investors, companies and consumers might change their behavior in ways that could worsen inflation. For instance, companies might opt to boost prices even more and workers might demand bigger pay increases because of that.

Inflation is a worry for R. Glenn Hubbard, professor and dean of Columbia University's business school who once was viewed as a potential successor to longtime Fed chief Alan Greenspan.

'It is hard for me to believe that inflation will come down without further policy action,' Hubbard said.

It was Bernanke, an economist, academic and former Fed member, who got the chairman's job and took over in February.

Economists and investors will have more insight into the Fed's thinking when minutes of its Aug. 8 meeting are released Tuesday.

Upcoming government reports on the economy also may help shape opinions on the fate of interest rates.

An updated reading on economic growth in the April-to-June period comes out Wednesday. Economists predict a higher revision in growth, to a rate of 3 percent, compared with an earlier estimate of 2.5 percent.

Yet that still would fall short of the first quarter's brisk 5.6 percent pace, the strongest in 2 1/2 years.

The Fed believes the slowing economy eventually will ease inflationary pressures. Yet lofty energy prices are a concern and are under close watch by the Fed. They were the main culprit for the 0.4 percent rise in consumer prices in July, twice the increase in June.

Fresh employment figures come out Friday. Hiring slowed in July, with companies adding just 113,000 new jobs. The unemployment rate climbed to 4.8 percent, a five-month high.

Economists are looking for better jobs figures for August, forecasting a 4.7 jobless rate and the addition of 125,000 jobs.

'I would want the Fed to stay on the pause button until we get much clearer signs of where the economy is going,' said Gene Sperling, senior fellow for economic policy for the Council on Foreign Relations and a former official in the Clinton administration.

--


And from Mr Bean:

Winds of globalization could turn sour

At August meeting, many Fed members saw rate decision as a close call
AFX


WASHINGTON (AFX) - Federal Reserve Board Chairman Ben Bernanke and his colleagues on the Federal Open Market Committee thought the decision to keep interest rates unchanged was a close call at their most recent meeting, but decided that it would be better to have more information about the economy before deciding whether or not to continue making money more expensive.

'In view of the elevated readings on costs and prices, many members thought that the decision to keep policy unchanged at this meeting was a close call and noted that additional firming could well be needed,' the Fed said, according to minutes of the August 8 meeting, released today.

Still, members of the FOMC said keeping the federal funds rate unchanged would allow the committee to gather more information about the economy before deciding on their next move.

'But with economic growth having moderated some, most members anticipated that inflation pressures quite possibly would ease gradually over coming quarters and the current stance of policy could well prove to be consistent with satisfactory economic performance,' the minutes said.

After 17 consecutive rate hikes, the FOMC members decided to keep the key federal funds rate at 5.25 pct at the August meeting, with just one member calling for an additional rate hike. Their next meeting is Oct 24-25.

newsdesk@afxnews.com

The dollar obviously didn't like that assessment!

Thanks for the posts Choccie.

The market was expecting a tougher inflationary stance from the minutes, and all they got was a regurgitation of what has already been 'said'.

Well that was all pretty unspectacular - but September approaches.

Bonjour

Bonjour Hil, ca va?

Le bon apr-midi mon Petit F. Je suis tr bien merci mais tout fait fatigu

Et la carte de Vodafone UMTS, cela fonctionne bien?

Non. The SFR prepaid SIM was incompatible with the datacard despite it saying on the box that it was 2G and 3G compatible. Having wasted an age (and a total of around 80) running around trying to find somewhere that sold the damn thing and then trying to make it work, I eventually opted for the local cyber cafe at 5/hour. I think that it cost 2 to transfer some money, check the footy and cricket scores and find out who'd died (there's always somebody who dies when I'm away - last time it was my mum's cat).

Is Maclaurin the Vodafone chairman? He's on my hit list for a snotty email tomorrow!!!

Hil, quelle dommage! The name's Bond, Sir John Bond. I expect his mobile number starts 07 . . .

He took over from Lord MacLaurin this year.

Can you get my boots warm please MM? Just booked a week in Meribel at Crimbo.

:o)

only a week?

hils, good to see you back, hope yo had a bon vacation

Merci goforit,

By the way, I see the 1.8830 region as initial support. It looks to have bounced from there on 25/8. Biding time for now to see what it's going to do next.

h, also a pivot point in that area, hoping to close in that area

anybody having problems with fxcm 5/10 min charts?

Ha. I've beaten Le Petit F to posting Le Calendar this week.