18 Sep 2013
AUD/USD soars through to 0.9475 on FED
FXstreet.com (London) - AUD/USD jumped from 0.9370 region and landed 100 pips on an extraordinary announcement on a FED that did nothing.
The recent data has been coming in weaker than expected and some participants had predicted a no change to their policy, but overall this has come as a shock to the markets. The Fed is not tapering, worried about tightening conditions and fiscal policies as well. So they want more evidence before they make any adjustments to the pace of tightening. They are not changing any of their thresholds and will take a balanced approached with regards to inflation of 2% and the unemployment rate. Markets had been pricing in a dovish tone from the FOMC and between a $5B - $15B cut in monthly QE purchases with a renewed emphasis on forward guidance in relation to unemployment thresholds between 6.5% and 6.0% as the FED tries to manage expectations for policy firming. We await the FOMC policy statement and press conference now. The pair will be watching for the RBA Bulletin later tonight once the market starts to settle down on the FED and FOMC.
AUD/USD on the up, eyes 0.9510
Karen Jones, Chief Analysts at Commerzbank said that above .9410/33 there is a risk of a move to the .9510 38.2% retracement prior to failure. “We view current move as a potential a-b-c correction”. “Continuing with the idea that it is best to trade this event in the most correlated currencies, I would say that the best G10 trade is to buy AUD/USD on a no-taper decision”, said Greg Anderson, strategist at BMO.
The recent data has been coming in weaker than expected and some participants had predicted a no change to their policy, but overall this has come as a shock to the markets. The Fed is not tapering, worried about tightening conditions and fiscal policies as well. So they want more evidence before they make any adjustments to the pace of tightening. They are not changing any of their thresholds and will take a balanced approached with regards to inflation of 2% and the unemployment rate. Markets had been pricing in a dovish tone from the FOMC and between a $5B - $15B cut in monthly QE purchases with a renewed emphasis on forward guidance in relation to unemployment thresholds between 6.5% and 6.0% as the FED tries to manage expectations for policy firming. We await the FOMC policy statement and press conference now. The pair will be watching for the RBA Bulletin later tonight once the market starts to settle down on the FED and FOMC.
AUD/USD on the up, eyes 0.9510
Karen Jones, Chief Analysts at Commerzbank said that above .9410/33 there is a risk of a move to the .9510 38.2% retracement prior to failure. “We view current move as a potential a-b-c correction”. “Continuing with the idea that it is best to trade this event in the most correlated currencies, I would say that the best G10 trade is to buy AUD/USD on a no-taper decision”, said Greg Anderson, strategist at BMO.