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Posted by fxrecommends@gmail.com on August 27, 2007, 10:51 am
The Fed could stave off the stock market loses and it has been widely
expected that it will do whatever necessary to bring the stability
back to the housing and the stock market. Until now the concerns of
another resurfacing of the crediting problems still exist.
So, the currency market focus is expected to be on the stock market to
choose between the carry trades getting use again of the interest rate
differential and its outlook or another unwinding wave can push the
Japanese yen higher and the USD across the broad because of the
selling in the stock market and buying the US treasury notes.
However the waited Fed's cut currently can add to the inflation
pressure which can bring the gold back to the 680 - 700 levels. I see
it as one of the preferred instrument to buy at this case.
The volatility in a mixed vision should be the mark of the markets
currently as the steep decline in the stock market due to the crisis
and from another side the central banks tries to install the stability
and the trust to attract funds taking risk again!
So, it is important to listen to Ben Bernenke talking about this
crisis and the Fed's stance by the end of this week. There are also
keys to be mentioned as US Q2 GDP preliminary next Thursday and US
August Chicago PMI next Friday.
Best wishes
FX Consultant
Walid Salah El Din
Mob: +20 12 465 9143
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com
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