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EIN News – XForex predicts an exciting week in forex trading as the ECB and Bank of England gear up for rate cuts.Toronto, Ontario (XFOREX) November 2nd, 2008 - - October was a month that most investors will be glad to see the back of. November is now underway and the new month is beginning - as the last ended - with interest rate cuts hotly anticipated from some of the world’s major central banks. Last week the Federal Reserve announced a 50 basis point interest rate cut in the federal funds rate, in a move that was broadly welcomed by financial markets. In the wake of the announcement the dollar weakened against most of the major currencies while commodities and metals prices rebounded.The FOMC’s (Federal Open Markets Commission) decision, which has taken benchmark rates to a meager 1%, was unanimous and leaves open the possibility of a further interest rate cut in November. The announcement came at the close of a week in which most of the major currencies recovered ground against the dollar, while the dollar in turn recovered ground against the yen.A stronger dollar has been one of the consequences of uncertainty in the financial markets since July. In October alone both sterling and the euro dropped in value against the dollar in excess of 9%. Both currencies managed to trim earlier losses after the FOMC’s announcement last week.This week both the ECB (European Central Bank) and the Bank of England are scheduled to announce their latest interest rate decisions on Thursday. Expectations in the market are that a 50 basis point cut in rates can also be expected from both banks. This figure has largely been priced into exchange rates already.Ever worsening economic prospects for key European economies is now the reality facing decision makers. In these circumstances there may yet be greater scope for cuts from either bank than the market consensus suggests. Benchmark interest rates in the Eurozone are currently 3.75% while in the UK they are 4.5%: worlds apart from the 1% benchmark now set by the Fed. As a result there is far greater room for bold cuts emanating from either bank than there was from the Fed last week.The traditional expectation of slow and cautious adjustments to interest rates in major economies has taken a battering in recent months. The scale and intensity of the credit crisis has forced naturally conservative central bankers to assume a bolder approach. Recent large scale hikes in interest rates from both Iceland and Hungary attest to this. The reality of monetary policy is more exciting now than it has been for years and traders’ should follow decisions closely in order to profit rapidly from market surprises.Monetary policy is a fine balance across central banks at present. The need to stimulate fragile economies is being traded off against a complex set of inflationary threats while the maintenance of economic confidence, and in particular confidence in financial sectors, remains uppermost in decision makers minds. All of this introduces unpredictability into markets and is set to ensure that the forex market should have a few more volatile weeks to look forward to before the year is out.For additional information about XForex, contact Mark Leigh or visit www.xforex.com.About XForex:XForex are global brokers focused on the currencies exchange and metals trading markets. The company are experts in the field of foreign currency trading undertaking billions of dollars in transactions on behalf of clients every month.Contact:Mark Leigh,XForex Incmark@xforex.com+1-416-850-7885http://www.xforex.com