subject: Risk Appetite Increases following Fed QE [print this page] Risk Appetite Increases following Fed QE
Last night the Federal Reserve Bank of America pledged to inject $600 bn into the American economy by June of next year. This has affected and strengthenedthe euro rate as investors move from the dollar into this slightlyriskier asset that offers a higher yield and therefore abetter return.
The euro has risen to 1.4155 against the dollar today. The GBPEUR rate has dipped below 1.14. We have the UK Interest Rate decision today at 12 noon GMT. I would expect no change in current fiscal policy, but this can be a market mover as investors try to anticipate changes. At 12.45 GMT we have the Eurozone Interest Rate decision and Trichet's speech at 13.30 GMT.
I would expect some volatility today on the euro asthe markets evaluatethe euro's position as a risky, yet safe haven currencyand assuming no change in interest rates I would expect tentative strength for the euro, increasing following Trichet's speech.
Those buying euros todaymay wish to get something booked earlier in the day while those selling may want to wait until following or duringTrichet's speech as he normally talks up the euro's position giving euro strength.
To find out more about short, medium and long term predictions on the euro, as well as all the other major currencies USD, GBP, ZAR, JPY, AUD, NZD, CAD, CHF, THB, HKD, TRY, SEK, NOK and more, please get in touch with the author.He is aspecialist currency broker and can offer massive savings by delivering commerical and preferential rates of exchange.
By using a specialist currency broker, such as currencies.co.uk, you can get currency rates much better than those offered by typical bank transactions. Plus you are made aware of events and movements as above that can help pinpoint peaks and troughs in the market that further maximise your transfer.
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