Heading into Federal Reserve Governor Bernanke's semi-annual testimony, market sentiment expected dovish testimony remarks in order to temper the recent discount rate hike by the Fed and yesterday's increase in the Supplementary Financing Program by the US Treasury. However, Bernanke's tone remained consistent with the text of his February 10th exit strategy testimony. As a result, the testimony was not dovish or hawkish enough to break current G10 FX ranges. In looking for FX drivers, the market will likely turn its focus back to Greece news flow and also the upcoming US Payroll release for February.
At the subsequent press conference, Eurogroup Chairman Juncker revealed that the finance ministers are now in agreement that if enough signs of progress towards deficit reduction are not visible by March 16, additional fiscal measures could be imposed on Greece. He said Greece has agreed to this.
He declined to describe the detail of any financial bail-out mechanism that may be in preparation on the grounds that "we do not think it would be wise to have a public discussion of such instruments". He added that the vigour of the Greek reaction to the crisis would likely make such instruments unnecessary in any event. Read More...
As you are aware, I'm out of office for the Vancouver/Whistler 2010 Olympic Games where I will be broadcasting the Bobsledding events.
The sliding community is deeply saddened by the death of a colleague. In life, dreams and goals drive us to take action and push our limits to achieve. To become successful, we must plan our way with precision and manage risk in the process. The art of trading requires a specific plan of action that will test our discipline and risk parameters to the highest degree.
The link below is an article about myself that may give some perspective on my personal history prior to taking on forex trading. This accident occurred one year before my first Olympic games.
We had a remarkable time bobsledding in Calgary. It is something one simply cannot miss. Impossible to explain the experience. Now, many of you understand a small piece of my psychological profile.
We are currently hosting the Olympic Winter Games here in Vancouver/Whistler, so my updates may be limited.
Fed Chairman Bernanke's written testimony (hearing postponed) outlined several steps the Fed could take to exit emergency lending and monetary policies but did not provide more information on the timing of a policy shift and retained the "extended period" language on the Fed funds target rate. Nevertheless, even as the Fed is feeling its way through the transition back to more normal policies, Bernanke's written testimony was positive for the dollar in that it provided better guidance as to what we can expect and watch ahead in terms of tools, if not timing. It also contrasts with the ECB, as Eurozone fiscal problems have slowed their plans to outline an exit strategy.
Several of the Fed's emergency programs have already naturally rolled off and Bernanke commented on other changes that could be put through. The Fed reduced the spread of the discount rate over the Fed funds target rate from 100bp to 25bp while extending the maximum maturity of discount window loans in order to improve bank access to liquidity. Bernanke said the Fed could raise the discount rate before long, but that would be more of a return to a more normal spread over the Fed funds as banks have less of a need to access emergency liquidity, rather than a signal that a Fed funds rate hike is right behind. Read More...
Come Bobsledding with World Cup Champion, Chris Lori!
My old teammates and I rent the Calgary Olympic bobsled track for a few hours and have a blast. We take the opportunity to take down our friends who have always asked if they can have a ride down. You won't sleep for 3 days after this experience! It is entirely a non profit cost sharing event. The cost is $75 per ride. Public rides on any other track are at least $250 and not nearly as intense. This is the closest you will ever come to the actual athletic experience of being in a World Cup or Olympic competition. Make sure you have your mommy's permission!
We will be joined by a few FX guys, as well, so pull yourself away from the charts and come join us!
Date: Feb 9, 2010
Time: 2pm - 4:30pm
Location: Canada Olympic Park, Calgary, Alberta
Other details: We will be hanging out in beautiful Banff, Alberta the night before. Most of our group are staying at the Buffalo Mountain Lodge.
Please email: firstname.lastname@example.org for more details. This has only been made possible due to cancellations, so there are only a few spots available. First Come First Serve!
Todays Forex Notes:
RBA Rate Hike Surprise?
UBS looked at a select number of global equity
indexes and look at the "currency effect" where
they roughly take the difference between the
return in dollar terms and the return in local
currency terms. In 2009, Brazil and Australia
benefited greatly from currency gains but so far
things are not shaping up as clearly. This is yet
another signpost that selectivity will be key for
currency investors and risk-seekers overall in
the months ahead.