Markets Cautious Ahead of Fed Meet

Wednesday, November 04, 2009, 09:25 GMT

The currency market is trading very cautiously in today’s session ahead of the monetary policy meeting of federal reserves.  Although the market is mainly trading in positive territory, as the consensus in analyst community shows that there will be no change in the benchmark interest rates and it will be kept at a record low of 0.25% for an extended period. Moderate gains can be seen in all the major currencies against the Greenback.

There is a fresh ray of hope as the figures for macroeconomic data in the US have come along with the improvement in housing data, showing signs of recovery from the current economic turmoil. The investors are still resorting to the cautious approach ahead of the FED meeting which is scheduled 19:15 GMT today.

Noticeably, the Greenback has fallen to as much as 12% since last year, against 6 of the world’s major currencies, forcing the fed to cut rates to almost zero in order to uplift the US economy from its worst recession since the 1930’s. The dollar will bottom out if the FED increases its interest rates and withdraws its stimulus plans for industries.