USD’s been getting beated around the past couple of days. The euro and pound edged higher, while the comdolls maintained their lead versus the Greenback. With the FOMC announcement just around the corner, what could be happen today?
The reason why the scrilla has been taking some hits lately is because some traders are already positioning themselves in anticipation of the announcement of QE3 during the FOMC statement. With all the poor data Uncle Sam’s been submitting as of late, some feel that the Fed has no choice but to introduce additional liquidity measures to help boost the economy.
Of course, there’s no telling what might actually happen, so that’s why you should tune in at 4:30 pm when Fed Big Boss Bernanke steps up to the plate. His speech should help divulge more information, such as the size, timing, and limitations of the program.
Just keep in mind that QE2 clocked in at 600 billion USD, with bond purchases spread over 8 months. If QE3 is much smaller in size or is to be implemented over a shorter period of time, it could help the dollar recover some of its recent losses.
Don't forget, that we also have other data on tap earlier in the New York session, in the form of the producer price index and weekly jobless claims report, both of which will be released at 12:30 pm GMT.
The PPI is seen to print at 1.1%, which would be a sharp rise from the 0.3% pace we saw the month before. Meanwhile, the four-week unemployment claims average is seen to rise from 365,000 last week to 370,000.
It's going to be WILD :)
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