The Forex Daily Digest – June 24, 2009

The FOMC is meeting through Wednesday afternoon and it appears likely the Federal Reserve plans to keep its options open until it’s sure that the U.S. economy is well on its way toward recovery. Economists believe the U.S. central bank is not about to hurry into any kind of a strategy that will take it away from current policy at the present time. A Fed announcement is anticipated at 2:15 pm (Eastern Time) Wednesday afternoon. In its statement, the FOMC is expected to announce that they will keep interest rates low and will continue to be prepared to expand the balance sheet as economic circumstances require. The best guess among the nation’s leading economists is for some positive growth in the third quarter and strengthening even more by the end of the year. But no one has a crystal ball and that’s why the Fed is keeping its options open.

The dollar is expected to continue its declines on speculation that the Fed will temper expectations for an interest-rate increase this year as they try to restore U.S. economic growth. The USD fell by the most in six weeks against the euro as traders increased their speculation that the U.S. benchmark rate will remain close to zero for the rest of this year. The dollar also weakened as the European Central Bank said policy makers have already used up their opportunity to cut borrowing costs, adding to the rumor that the EUR’s rate will remain higher than that of the U.S.

The CAD was little changed after falling from earlier gains as crude oil prices fell. The CAD has lost 5.1 percent against the USD since Bank of Canada Governor Mark Carney said earlier this month the “rapid rise” of his nation’s currency risked stifling Canadian economic growth. On June 4th, the central bank halved its key overnight interest rate to a record low 0.25 percent. Canada’s policy makers are scheduled to meet again on July 21st.

The GBP fell for a second day against the Euro after the chief economist for the Bank of England said a weaker currency is making British assets more attractive to foreign investors. Also, the pound fell after the nation’s largest residential property operator said the median cost of a home in the U.K. dropped 0.4 percent this month. That is the first decline in five months. The GBP has risen 3.2 percent against the dollar in the past month.

Economic reports on Wednesday include May’s Durable Goods Orders. Durables, excluding transportation costs, are expected to come in at a negative 0.5 percent after a 0.8 percent showing last month. New Homes Sales are expected to show an increase from last months 352 thousand units. The regular Crude Inventory Report is scheduled for release and don’t forget the FOMC Announcement at 2:15 pm (Eastern Time).

The events that guide currency trading in this volatile global economy are becoming more complex and that means you need as much education as you can possibly get in order to learn how to make the critical decisions to become profitable in the Forex market. JDfn offers you daily Internet broadcasts that highlight the possible setups and strategies our professional traders are using in their daily trading. Their views will offer you some excellent starting points that you can adjust to fit your own trading style. Also, consider signing up for a webinar, personal coaching sessions or classroom training. We offer it all and I urge you to sign up for education. Once you know how to do something - it’s easy. It can happen for you if you get the education you need. I do hope you are having a profitable week!

Happy Trading –

James Dicks