The Fusion Media Network:

Real-Time Quotes:

Home

Analysis

General Overview

Fundamental

Technical

Futures

Central Banks

Forex Brokers

Trading Tools

Crosses

Federal Reserve cut discount rate by 0.50% to add more liquidity

By:

Easy Forex

2007-20-08

votes

View Comments (0)

Previous Analysis | Next Analysis

	Text Size
	Print
	Email
	Add a Comment

Federal Reserve cut discount rate by 0.50% to add more liquidity. Eyes on BoJ this week.

CURRENCY TRADING SUMMARY

U.S. Dollar Trading (USD) ended its recent gains across the board following the Federal Reserve’s decision to cut its discount rate, charged on direct Fed loans to banks, sighting risks to the U.S. economy have increased. Following a week long rally on the back of USD demand as a safe haven investment in a market of falling global stock prices, the USD declined to end the week as the Central Bank decided to decrease the discount rate by 0.5% in an attempt to increase liquidity whilst keeping a close eye on market conditions. On the data front, the Michigan Sentiment survey was released lower than expectations but failed to have any initial influence on the currency. In U.S. share markets the NASDAQ was up by 53.96 points (+2.2%) whilst the Dow Jones was also up rebounding by 233.30 points (+1.82%). Crude oil also did well to regain some of its recent losses up by US$0.76 a barrel to US$71.76.

The Euro (EUR) regained some of its recent losses following a broadly weaker USD. Overall the EURUSD traded with a range of a low 1.3370 and a high of 1.3548 in the New York session.

The Japanese Yen (JPY) was the most volatile currency on Friday in a choppy market. With plenty of attention recently being placed on Equity markets to measure risk appetite, a rebound in stock prices ensured that investors returned to carry trades, although hesitantly. As a result the Japanese Yen suffered moving away from recent lows against the USD. In other news, reports suggested that the BoJ will avoid increasing rates in the coming week, keeping rates unchanged at 0.50%, whilst expectations of any rate hike diminished to less than 10%. Overall the USDJPY traded with a low of 111.60 and a high of 114.92 before closing the day at 114.00 in the New York session.

The Sterling (GBP) rose on the back of other majors in a rebounding market. Much of the move was attributed to the Federal Reserve cutting their discount rate by half a per cent, providing more stability to the markets. In other news, the sterling Pound also rallied against the Euro and the Japanese Yen. Overall the GBPUSD traded with a range of a low 1.9653 and a high of 1.9938 before closing the day at 1.9800 in the New York session.

The Australian Dollar (AUD) rebounded on Friday ceasing its recent sharp sell off through out the week. Once again the AUD benefited from the Fed’s decision to add more liquidity to the markets. Overall the AUDUSD traded with a range of a low 0.7677 and a high of 0.8008 and a high of 0.7931 in the New York session.

Gold (XAU) also moved on the Federal reserves decision on Friday, pushing the precious metal sharply higher by Mid New York session. XAU traded with a low of 646.30 and a high of 663.50.

Euro 1.34
Initial support at 1.3360 (Aug 16 low) followed by 1.3305 (Jun 15 low). Initial resistance is now located at 1.3548 (Aug 17 high & 38.2% retracement of the 1.3853 to 1.3360) followed by 1.3628 (Aug 14 high).

Yen 114.35
Initial support is located at 111.60 (Aug 17 low) followed by 111.32 (Jun 2, 2006 low). Initial resistance is now at 116.76 (Aug 16 high) followed by 117.67 (Aug 15 high).

Pound 1.9810
Initial support at 1.9652 (Aug 17 low) followed by 1.9544 (Mar 30 low). Initial resistance is now at 1.9937(Aug 17 high) followed by 1.9974 (Aug 15 high)

Australian Dollar 0.7985
Initial support a 0.7674 (Aug 17 low) followed by 0.7614 (Nov 13 2006 low). Initial resistance is now at 0.8011 (Aug 17 high) followed by 0.8133 (38.2% retracement of the 0.8875 to 0.7674 decline)

Gold 657.80
Initial support at 642.45 (Aug 16 low) followed by 640.00 (Jun 26 low). Initial resistance is now at 668.90 (Aug 16 high) followed by 676.80 (Aug 8 high)

Digg

Del.icio.us

Mixx it!

Reddit!

Wikio

Next Analysis:

Content Provided by:

Easy Forex
Easy-Forex™ Trading Platform, founded by a group of bankers, Forex and Internet experts, offers Forex traders direct access to the global currency markets. Easy-Forex™ revolutionary Online FX trading platform is the first online FX trading system allowing clients to deal Forex as a ...

Disclaimer:
The information and data entailed in this website or otherwise made accessible to you on this website are provided to Easy-Forex™ by a third party provider. Such information and/or data are made accessible for informative purposes only and they can under no circumstances be considered as a recommendation to you by Easy-Forex™ or any Easy-Forex™ personnel to engage in any trade. Hence, neither Easy-Forex™ nor any of its personnel can under any circumstances be held responsible for any outcome of trading decisions or trades in regard to any of such information and/or data. You hereby acknowledge that accessing and reviewing any of such information and/or data and/or using any of the information entailed in this website or otherwise made accessible to you on this website is your sole responsibility and at your own risk and you will have no claims with regards to any such information and/or data against Easy-Forex™ or any of its personnel. If you are unable to agree to this, you should not access and/or make use of any such information and/or data. Easy-Forex™ endorses responsible and moderate trading. Forex trading (OTC Trading) involves substantial risk of loss, and may not be suitable for everyone and we would like to recommend you not to risk any money, you cannot afford to lose. The transaction of such financial instruments known as Forex, fx, or currency, and dealt on a valued basis known as 'spot' or 'forward', 'day trading' and 'option', can contain a substantial degree of risk. Before deciding to undertake such transactions with Easy-Forex™, and indeed, any other firm offering similar services, a user should carefully evaluate whether his/her financial situation is appropriate for such transactions. Trading foreign exchange may result in a substantial or complete loss of funds and therefore should only be undertaken with risk capital. The definition of risk capital is funds that are not necessary to the survival or well being of the user. Easy-Forex™ strongly recommends that a user, who is considering trading foreign exchange products, read through all the main topics contained in the Easy-Forex™ website so that he/she may obtain a clear and accurate understanding of the risks inherent to ‘forex’ trading. Opinions and analysis on potential expected market movements contained within the Easy-Forex™ website are not to be considered necessarily precise or timely, and due to the public nature of the Internet, Easy-Forex™ cannot at any time guarantee the accuracy of such information. Information provided on this website is intended solely for informational purposes and is obtained from sources believed to be reliable and accurate. Information is in no way guaranteed. Easy-Forex™ and the Easy-Forex™ logo are trademarks and/or registered trademarks of Easy-Forex™ in the United States and/or other countries.

News

Quotes

Forex Analysis

Forex Brokers

Forex Software

Live Events

Charts

Education

Forex Forums

Languages

Risk Disclosure: Fusion Media will not accept any liability for loss or damage as a result of reliance on the information contained within this website including data, quotes, charts and buy/sell signals. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible. Currency trading on margin involves high risk, and is not suitable for all investors Before deciding to trade foreign exchange or any other financial instrument you should carefully consider your investment objectives, level of experience, and risk appetite.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All stock prices, indexes, futures and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn’t bear any responsibility for any trading losses you might incur as a result of using this data.