Dollar Is Weaker A Day After The FOMC Meeting

Dollar is on the defensive on Thursday a day after the FOMC meeting.
Policymakers decided to resume the 600 billion dollar Quantitative
Easing program and to keep rates near zero levels for an extended
period of time. The Fed emphasized on its effort to fight the
country's stubborn unemployment by promoting a stronger recovery rate.
Initially after the FOMC statement the dollar fell, as the Fed stated
inflation is low and expected hawkish comments on the US recovery were
not made. Investors focus on today's Pending Home Sales and Durable
Goods Orders data hoping to have a clearer view on the US recovery.
Jobless claims are also released later today.

The euro held firm above the 1.37 level against the US dollar on
Thursday. The euro appears to have an interest rate advantage now as
the ECB focuses on the worrying higher inflation. ECB President
Jean-Claude Trichet also expressed the need to put a lid on rising
prices after inflation exceeded ECB's target. Expectations of an
interest rate hike raises demand for the single currency pushing it as
high as 1.372 dollars.

The Australian dollar edged lower today after a new tax must be paid
in order to rebuild the damages caused by the recent massive floods in
the country. The new tax decision clouds the possibility that the RBA
will lift the rates in the near future weighing on the Aussie. Against
the US dollar, the Aussie dropped to 0.9935 from 0.9999. The New
Zealand dollar rallied after the RBNZ kept rates unchanged but
emphasized on lifting rates the economy shows signs of recovery.
Gold jumped after the FOMC statement saying the Fed will resume
injecting dollars into the economy. The precious metal, which did not
benefit from the recent fall of the dollar, rose as high as 1347.98
from 1324.85 dollars an ounce.

*Currency to watch out for: EURUSD & USDJPY*
The EURUSD pivot point is at 1.3625 with a preference to enter into
Long positions at 1.3635
The USDJPY pivot point is at 82.40 with a preference to enter Short
positions at 82.35
*Today's calendar and market movers:*
Germany's Consumer Price Index in January is forecasted to fall 0.4%
US Durable Goods Orders in December is forecasted to gain 1.6%
US Initial Jobless Claims is forecasted to rise to 409K
US Pending Home Sales in December is forecasted to fall to 1.1%
*Equity Markets:*
US equities were positive on Wednesday with the S&P500 trading up
0.42% and the DJIA trading up 0.07%. The European bourses are also
positive with the FTSE trading up 0.87%, the DAX trading up 0.97% and
the CAC up 0.73%. The NIKKEI and the HSI at the time of writing are
trading up 0.81% and up 0.35% respectively.
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Source: ActionForex.Com