The Forex Daily Digest – July 23, 2009

Fed Chairman Ben Bernanke traveled to Capitol Hill again yesterday testifying on the details about how the Fed, which has pumped hundreds of billions of dollars into the U.S. financial system, would undo its rescue programs. But at a congressional hearing on Wednesday, legislators appeared to be less concerned in the technical details of the Fed's exit strategy than they were about what tools the Fed has to fix the unrelenting housing and labor markets.

The New York Federal Reserve announced the latest timetable it will buy U.S. Treasuries, one of its quantitative easing programs designed to lower interest rates and put an end to the current recession. The U.S. central bank will hold a purchase operation today, followed by two in the week ended July 31st and another two in the week ended Aug. 7th. Since March, the Fed has purchased about $217 billion in U.S. government debt which is equivalent to 72 percent of the $300 billion it expects to purchase in six months.

The Chinese Commerce Minister told reporters after a two-day APEC meeting that the rate of decline in China's exports could improve later this year while the country's stable yuan policy will benefit the global economy. China allowed the yuan to appreciate steadily against the USD after its landmark currency revaluation in 2005, but the rise came to a stop in July 2008 as the global financial crisis hit. Meantime, the Bank of Japan Deputy Governor said he does not see the need to implement further monetary easing steps because price falls are expected to narrow.

The dollar turned lower against the euro, hitting session lows in uneven trading, as U.S. stocks edged lower at the end of the trading day yesterday. And the USD continued its losses against the yen while the euro fell after Morgan Stanley released its results for the second quarter. Analysts said risk appetite declined after Morgan Stanley missed market expectations of its earnings by a significant margin.

The GBP recovered from its losses after minutes from the Bank of England's July 8 through 9 Monetary Policy Committee meeting showed that members voted 9-0 to leave the bank's asset purchase program unchanged at 125 billion pounds ($205 billion). The panel also decided to re-examine the program next month. The MPC is authorized by the British Treasury to increase the program to 150 billion pounds, and could ask the government for authority to expand the program even further in the future.

It has been a very slow economic reporting week but today you can expect the release of the Initial Jobless Claims report for the week of July 18th. Last week the claims came in at 522 thousand and that number is anticipated to increase this week. Also, Existing Home Sales for June will be released at 10 am (Eastern Time). Last month, Existing Home Sales were reported at 4.77 million units. This morning’s report is expected to come in at 4.83 million units.

Some of the major earnings on the calendar today include Ford, Microsoft, American Express, McDonalds, Bristol Myers Squibb, AT&T, Credit Suisse, Fifth Third Bancorp, Amazon.com, and Northrop Grumman.

Now is the time to make sure you have all the information you need to make the critical decisions as it pertains to your Forex trading activity. There are so many things happening worldwide that will affect your trading accounts. Don’t get caught unaware. I urge you to listen to the JDfn traders each and every day and learn from their experience. Every morning they offer potential setups forming in the Forex market and I assure you that this is information you need to become successful in your trading account. JDfn traders are here for you – take advantage of their expertise.

Happy Trading-

James Dicks