U.S. Dollar Weaker as Fed Mulls Quantitative Easing

The U.S. Dollar is under pressure againstmost majors on speculation the Fed will consider restarting its quantitativeeasing program following next week’s FOMC meeting on August 10.

The U.S. Dollar is under pressure againstmost majors on speculation the Fed will consider restarting its quantitativeeasing program following next week’s FOMC meeting on August 10.

According to the Wall Street Journal, theFed will consider using cash from maturing mortgage-bond holdings to buy newmortgage or Treasury Bonds instead of allowing its portfolio to shrink.Insiders believe the Fed’s decision will be heavily weighted by this Friday’sU.S. Non-Farm Payrolls Report.

The Euro and British Pound remained strongat the mid-session ahead of the Bank of England and European Central Bankpolicy meetings on August 5. Bothcentral banks are expected to keep interest rates unchanged. The BoE will reporton the effects of the new austerity measures and tax hikes on current monetarypolicy. The big issue will be whether these reforms curtail growth. The ECB islikely to issue a statement on the state of the Euro Zone following the recentaid package to countries facing sovereign debt issues. Recently strong economicreports have surprised investors, many of whom believed the economy would slowdown due to financial austerity measures.

The Dollar remained under pressurethroughout the morning, pressured by weak U.S. consumer spending news, a dropin home sales and a bigger than expected decline in factory orders.

James A. Hyerczyk has been actively involved in the futures markets since 1982. He has worked in various capacities within the futures industry from technical analyst to commodity trading advisor. Using W. D. Gann Theory as his core methodology, Mr. Hyerczyk incorporates combinations of pattern, price and time to develop his daily, weekly and monthly analysis. His firm, J.A.H. Research and Trading publishes The Forex Pattern Price Time Report... More

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