IntegrityFX.com Daily Forex Market Outlook
by John Rowa, Executive Director of Trading
The Fed cut the overnight target rate to its lowest level since 2004 at 1.00% on Wednesday and markets globally are primed to follow suit. Following in the US footsteps, the BOE, Euro-zone, and most other major central banks are expected to be cutting into 2009 as recession looms over the global economy.
However, perhaps one of the most important rate decisions for Forex traders comes from today’s Monetary Policy Statement and Overnight Call Rate for Japan. The recent large move in EURJPY, GBPJPY and the like can be attributed to Japanese finance ministers hinting they would be intervening if the JPY continued its recent massive gains. With JPY-quoted pairs already so drastically oversold, the expectation of a JPY rate cut has contributed to the retracement.
So, we will continue to be bullish “risky assets” as the Japanese should, in the very least, announce that they will do just about anything to stop the JPY strength. Therefore, we will look to buy EUR, AUD, CAD, GBY, etc and sell USD and JPY.
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IntegrityFX.com Daily Forex Market Outlook - 10/30/2008
