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Forex · News · USMarketNEWS / USMarket |
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Market is expecting the FRS rate decision…Rate dynamics and recommendations on EUR-USD and GBP-USD.
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09:26 08/10/2004
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Market is expecting the FRS rate decision…Rate dynamics and recommendations on EUR-USD and GBP-USD.
The event, expected by the market for 2 months, is to finally take place today. The decision of the Open Market Committee of the FRS U.S. is to be announced today. Thought, the outcome might be the expected one and might not affect the market at all. After the release of shocking news on the Labor market – low nonfarm payrolls – the FRS is not likely to take radical measures and rate change range is expected to be minimal, i.e. not higher than 25 base points. In any case, the market will stay calm, while waiting for the event. If the rate target is raised to minimal 0,25%, the fall of the dollar will continue. There is still a chance for the second variant – rate target can be raised, then we might expect correction of the uptrend. If no decision is made, the dollar will fall all the way down.
The strongest anti-dollar factor is oil prices rise at the Old World and the New World stock exchanges. Prices have been rising for the last 10 days. At New York stock exchange, crude futures reached $ 45. At London stock exchange, Brent crude futures reached $42 a barrel. Analysts think there are several reasons for that: stoppage of oil extraction in the south of Iraq and exporting oil by oil pipeline from northern oil fields. YUKOS case in Russia arises great number of concerns too. Rise in oil prices is also tied to the threat of stopping oil shipments due to seizure of property of the affiliated companies of YUKOS and, mainly, Yuganskneft.
The president of OPEC, Purnomo Yusgiantoro, said the oil cartel might make a decision to increase oil shipments by 1,5 million barrels/day in September, so that to bring world oil prices down. Let us remind that at present 11 OPEC countries, including Iraq, extract about 30 million barrels of oil a day, whereas the official quota for 10 OPEC countries is 26 million barrels a day.
Recommendations: take a close look at the rate decision. In case, the rate is raised 0,25%, as forecasted, or not raised at all, consider longs on EUR and GBP from the levels of 1,23 and 1,8475 1,2320 respectively.
Recommendations: take a close look at the rate decision. In case, the rate is raised 0,25%, as forecasted, or not raised at all, consider longs on EUR and GBP from the levels of 1,23 and 1,8475 1,2320 respectively.
The forecast was created by trans1.
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