Markets in the US are excitedly anticipating today’s Fed meeting, hoping that some form of further monetary stimulus might be forthcoming. Investors are expecting some sort of monetary easing from the Feds.
It will be a fairly quiet session in terms of scheduled economic data releases in Europe and Asia. The BoE will release minutes from its May meeting, the thrust of the minutes should be more dovish than a month ago and there is a risk of one or two more dissenters in favor of more QE. Last month’s minutes noted that the MPC would have to take account of any action by the financial policy committee. The actions announced in last week’s Mansion House speech may outweigh the need for more QE. UK jobs data will be released as well.
EURUSD (1.2676) with continued worries about Spain’s borrowing rate as well as the bank audit, showing that the banking system needs 30bn euro immediately and the ongoing process of forming a government in Greece, the euro dipped in early trading.
The Great British Pound
GBPUSD (1.55724) The pound is just about even, without much activity, although the BoE minutes are due to be released, these have been cancelled by the joint announcement last week on new government and BoE programs. A report showing the consumer inflation fell has kept the pound balanced against the euro.
Asian –Pacific Currency
USDJPY (78.85) The yen remains in the upper 78 level, as investors stay in risk aversion mode. With the conclusion of the G20 and the FOMC policy statements today, markets will most likely remain quiet until the US session
Gold (1620.75) is seesawing between small gains and small losses, like everything else, waiting for clues or direction as to the FOMC statements later today. Gold most likely will become a bit more active as we get closer to the announcement.
Crude Oil (84.29) prices continue to show small gains, but remain in the low 80 price range. The price is more influenced by the weakness or strength of the USD. Although additional monetary stimulus from the FOMC may spark growth and demand.