FOMC Announcements Keep Dollar Weak, German CPI On Tap

!! Market Brief !!
Asian stocks rose as the US Fed said that it will continue supporting
the economy, commodity prices soared and the South Korean Won rose.
The MSCI Asia Pacific Index rose 0.6%, Nikkei rose 0.75%, Hang Seng
rose 0.45% and the Shanghai Composite rose 1.4%. Asian markets are
showing signs of growth on positive earnings reports and Fed's
announcements while the PBoC said that interest rates would gradually
increase in H1 2011. Japanese exports rose 13% while imports rose
10.6% giving boost to sentiments that global demand is picking up.

The EURUSD continued its rise to trade at a high of 1.3714 on
speculation that German inflation levels rose at the fastest pace in
two-years when the data releases today adding signs of positive
recovery kicking in and on speculation that the ECB will reiterate
today their concern that inflation will quicken, AUDUSD dropped after
the PM announced a one-off tax levy on income to fund rebuilding after
the recent floods with the currency trading at lows of 0.9937, USDJPY
traded at low of 82.02, GBPUSD declined to 1.5897 as house prices
declined the most in three years on economic outlook concerns.

Yesterday's FOMC statements said that expansion in the US is
continuing, though at a rate which is insufficient to bring
significant changes in the labor market, inflation is too low,
unemployment is too high and said that the progress towards its
objectives have been very slow while keeping interest rates unchanged
at 0.25% and maintaining plans to purchase $600 Billion of treasuries
till June. There are speculations that the Fed will keep rates
unchanged all of this year before raising in Q1 2012. German inflation
probably increased to 2.2%, highest since Oct. 2008 while consumer
sentiment increased to 106.7 according to reports due today while ECB
President Trichet said that the ECB will do everything that is
necessary to keep inflation in check giving rise to speculations of a
rate hike in the docks. The BOE minutes revealed that another member
voted for increasing interest rates by 0.25% g iving hawkish tone for
the policy while some had concerns over the inflation levels and one
member voting to add another 50 Billion Pounds to the asset purchase
program which gave some strength to the GBPUSD.

The Australian PM said that the nation's flood crisis would cost
$5.58 Billion and erase 0.5% of the GDP while adding that an
additional tax levy from 0.5% - 1% would be added to income earners
raising A$1.8 Billion to help raise money for rebuilding while the
RBNZ kept interest rates unchanged at 3% adding that tightening
concerns are still in place and indicated that the next rise could be
in June.

We expect German inflation news, EU consumer and business sentiment
data, US durable goods orders, jobless claims, pending home sales
while tomorrow's focus would be on GDP estimates.
Source: ActionForex.Com