17/3/2010 - The Current Market Sentiment

[fxreco...@gmail.com]

It looks that the fed is still possessed by the labor market losing
jobs until now keeping its phrase of keeping the interest rate for an
extended period of time warranted by low inflation pressure. The
greenback came under pressure with no opposing voting but Hoening
again who is still preferring taking a tightening action. The decision
of keeping the interest rate unchanged between 0 to .25% was widely
expected and it could keep the US stocks creeping up pace from
falling. DOW could add another 43 points looking for January high at
10729. The investors' risk appetite has been supported by Fed's
keeping this accommodative monetary stances further putting pressure
on the greenback supporting the gold as a mirror of inflation in this
time of suffering owes from the bonds markets amid credit downgrading
which can give the gold another competitive feature versus the bonds
which started to pay the cost of the governmental rescue plans and
injecting liquidity in the recent 2 years into the nerves of the
economy by increasing its stimulating spending, tax cuts and easing
the monetary policies for spurring the investment and moving the
economy out of the recession after the credit crisis.

The worries about the Greek debt have calm down as the market is
waiting for an expected unwarranted financial support from the other
EU member for capping this problem from spreading in the Euro zone
which is actually facing a downgrading of its countries creditability
as Moody's warned about the triple A crediting countries in the
beginning of this week with the current slow economic recovery in
Europe comparing with US and the debt which is still accumulating in
several countries like Greece, Spain and Portugal and should be faced
with the deficit to GDP ratio average is at 6%, while it should be
below 3% on Maastricht treaty of the Euro area.
The single currency could get back above 1.37 again versus the
greenback underpinned by optimism of a joint European financial
support to come to Greece and increasing of the market risk appetite
after the fed's softer language than expected which suggests keeping
the interest rate at its current low to the second half of this year
unchanged.

Best wishes

FX Consultant
Walid Salah El Din
E-Mail: ma...@fx-recommends.com
http://www.fx-recommends.com