Early morning Fed action is quite justifiable, however one should see this as a preemptive measure to allow for a lower rate cut. However, to the extent that people are pricing this in may be minimal. Though it is good that the Fed is seeing that Fed Cut rates are ineffectual and are exploring other means of monetary policy, it is apparently damaging their reputation. With the Fed's constantly catering to the financial markets, the Fed Reserve charter should be rewritten. However, such economic conditions tied closely with financial conditions do warrant such measures as Congress seems pretty inept with dealing with financial crisis's.
The dollar experienced a significant rally, Which is quite lovely as it fits in nice with the weekly chart of the USD/YEN. I expect it to rally about to 104 before it resumes its short trend. However, I have not double checked with momentum. This will probably mean the dollar might not break resistance of 101.5 on the weekly chart from Jan. 2005 until March 2008. Obviously this will be in Japans best interest for this support level to hold, if the Japanese economy wants to improve recent slowed growth.
More after class...
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