USD on a One Month High as Fed Tweets

March 15, 2012 Share Print 0

The main takeaway from yesterday’s market was the strengthening of the U.S. dollar most notably against the Japanese Yen and the Euro as the result of the positive economic indicators to come out of the United States and the Federal Reserve comments on QE which have increased U.S. Treasury Yields.

fxlabs currency heapmap

The biggest story on Wall Street was published on the New York Times Op-ed section. Greg Smith a VP with Goldman Sachs publicly resigned leaving a bad mark on the investment bank which has prompted an official reply as a memo directed to all the bank’s employees. Did the last ethical GS banker walked out? or did bonus season not leave enough in his stocking?

Fitch Ratings revised the United Kingdom’s AAA rating with a negative warning, from a previous stable outlook, as it could lose the investment grade if it does not stick to the current debt cutting path. Moody’s issued a similar warning a month ago on the back of some sectors asking for a looser fiscal stance. The current British government was elected on the promise of eliminating the record high 11 percent budget deficit and progress in the first two years have been slow due to Eurozone crisis.

Analysts are debating on what adjetive to add to the slowdown of the Chinese economy. Some have used hard. Adrian Mowat from JPMorganâ€œChina is in a hard landing. Car sales are down, cement production is down, steel production is down, construction stocks are down. Itâ€™s not a debate anymore, itâ€™s a fact.â€ Or perhaps it’s a long landing as Michael Pettis mentions the long debate focused on political reform to adjust the growth model.

You can follow the Fed now on twitter: www.twitter.com/federalreserve

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.