SubscribeDaily Futures Commentary August 11, 2009
Tuesday, August 11, 2009
The U.S. Dollar is trading lower overnight following a strong three-day rally. Weakness was anticipated to begin because of position squaring as the Fed begins its two day Federal Open Market Committee Meeting.
On Wednesday the Fed is expected to announce that interest rates will remain the same at near zero. With the economy improving, the Fed is also expected to allow its quantitative easing program to expire in September. Although its original $300 billion asset buyback program will be ending, the Fed may keep open the possibility of providing additional financial stimulus to the economy.
One job the Fed has to do is keep investors informed as to what is really happening in the economy. Following last Friday’s better than expected U.S. Unemployment Report, speculation soared that the Fed would have to consider hiking interest rates sooner rather than later. The job of the Fed at this time is to maintain the steady optimism about an economic recovery without curtailing the actual U.S. recovery.
In other words, while the Fed welcomes enthusiasm over the possibility of the recession ending in the U.S., it wants to make …
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