US Fed keeps interest rate steady. Dollar gains in Forex Trading. | CountingPips Forex Blog

January 28, 2009 - Forex Economic News

US Fed keeps interest rate steady. Dollar gains in Forex Trading.

The U.S. Federal Open Market Committee concluded its monetary policy meeting by holding the U.S. interest rate steady at its record low level. The FOMC had cut the interest rate to a new target range of 0 percent to 0.25 percent on December 16th and signaled today that US holds interest rate steady, USD gains in FX Trade the rate will stay there for "some time". Today's decision to keep the rate unchanged was widely expected by market forecasts.

The Fed statement accompanying the rate decision commented on the U.S. economy, "Information received since the Committee met in December suggests that the economy has weakened further. Industrial production, housing starts, and employment have continued to decline steeply, as consumers and businesses have cut back spending. Furthermore, global demand appears to be slowing significantly."

The Fed also vowed to "employ all available tools to promote the resumption of sustainable economic growth and to preserve price stability", including preparing to buy long term Treasury securities if it feels that the purchases would help the credit markets. The idea of buying Treasury securities goes beyond the December Fed statement that said it was just considering buying them. The Fed also said that it would help to provide credit to households and small businesses by "implementing the Term Asset-Backed Securities Loan Facility." You can read the full Fed statement here.

Forex Market - US Dollar shows gains today.

The U.S. dollar has been mostly stronger today in forex trading against the major currencies as the dollar has shown gains against the euro, pound, Australian dollar, yen, Swiss franc and New Zealand dollar while declining versus the Canadian dollar.

The euro is falling versus the dollar today as the EUR/USD has dropped from today's 1.3263 opening(00:00 GMT) to trading at approximately 1.3144 in the afternoon of the US trading session at 3:58pm EST.

The British pound has declined today versus the American currency from the 1.4258 opening to trading at 1.4215 dollars per pound after gaining against the dollar for the past two days. The dollar has also advanced against the Japanese yen today as the USD/JPY has gained from its 89.25 opening to trading at 90.25 yen per usd.

The USD has also advanced against the Swiss franc from the 1.1373 opening to trading at 1.1523. The Australian dollar has lost ground as the AUD/USD has declined from 0.6665 to 0.6649 while the New Zealand dollar has fallen from 0.5304 usd per nzd to trading at 0.5234 later today.

The dollar, meanwhile, has declined against the Canadian dollar after opening at 1.2276 earlier today to trading later at 1.2148.

EUR/USD Chart - The Euro falling today against the US Dollar and trading below the 21-day simple moving average(blue).

Today's Forex Chart

tags: US interest rate, Federal Reserve, Fed, Forex Trading, USD

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