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The Federal left short-term interest rates unchanged ending weeks of debate whether it was the right time to end an era of near-zero rates in acknowledgment of the ever improving US economy and job market. A majority of Fed officials still believe the central bank will raise rates before the end of 2015, but the central bank showed a little less conviction with the number of officials in favour slipping to 13 from 15 back in June. Janet Yellen noted in a press conference after th…

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The Federal Reserve kept interest rates at near zero once more last night but continued to fuel the ever intensifying fire of speculation concerning when the first rate hike in nine years will be. Chairman Janet Yellen primed the markets in her Statement with positive US economy sentiments, primarily citing progress in the US job market as the main instigator. The US unemployment rate has decreased from 10% in 2009 to 5.3% in July of this year. Yellen’s wording of ‘hiring g…

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On Wednesday, the US preliminary GDP reading disappointed markets (0.2% vs 1% expected). Throughout the US trading session the USD weakened against the major currencies after the disappointing print. GBPUSD traded towards the highest level of 2015 (1.5550), trading to a session high of 1.54960. EURUSD was bid on the USD weakness, breaking firmly above 1.10, then 1.11 and currently 1.1230. FOMC decision At 19:00 (London) the FOMC rate decision was released, with as markets had exp…

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In the first half of April, GBPUSD traded to a new 5 year low (1.4530), with the US dollar bid and GBP weak on election fears. Fast forward a matter of weeks and cable is now trading above 1.5365 and EURUSD has rebounded from its race to parity, to trade over 1.10. The move is primarily a US dollar story, in the UK the general election is in eight days and the uncertainty over the future government remains. In Europe the fears of a Grexit remain, as the remaining funds in Athens are ne…

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Spot Gold is currently trading around the $1,205 level today, near its three-week low as the dollar strengthened across the board following the Federal Reserve’s decision to end its asset-purchase program known as ‘Quantative Easing’ last night. Fed officials, who voted on whether to proceed with plans to end the monthly bond-buying or not, dismissed recent turmoil in global financial markets and weak inflation figures, instead focusing on employment gains as they sig…

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The Federal Open Market Committee concluded their two day meeting on Wednesday and voted unanimously to taper the level of monthly asset purchases by $10bn from the 1st February. At Ben Bernanke’s final meeting, the reduction of asset purchases was split equally between Treasury’s and mortgage-backed securities (MBS). The pace is now expected to continue with a monthly reduction of $10bn as the Fed attempts to wean the US economy from the ultra loose fiscal policy. Some ana…

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The Federal Open Market Committee (FOMC) minutes will be released today at 7pm (London). Traders are awaiting the release of the December meeting minutes, as it was the first time that the Fed began tapering their monthly asset purchases, a reduction of $10bn for this month. Prior monthly purchases had totalled $85bn, with a reduction to $75bn for this month. The flooding of the markets with cheap money, fuelled by central bank QE, and now the removal of the stimulus have been key them…

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The FOMC concludes their two day meeting today and will announce if they will reduce their monthly asset purchases from $85billion ($40bn MBS and $45bn Treasury’s). It is the final meeting for Ben Bernanke the current Chairman of the Fed, with his successor expected to be hawk Janet Yellen. At 7pm GMT the interest rate, economic projections and most importantly the level of asset purchases will be announced. In the Bloomberg survey of economists, 35% expect the Federal Reserve to…

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The Federal Open Mark Committee (FOMC) left the potential for tapering to begin in December, stating “warrant trimming the pace of purchases in coming months.” The FOMC is walking a tight rope, as it attempts to soften the market impact of reducing its current level of quantitative easing. The Fed is attempting to signal to the market a vague timetable of tightening, without shocking investors. It is a difficult task, if they are too vague, then markets are left unsure, if the ex…

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Will the FOMC announce that they are to begin tapering their monthly bond-purchases today or not? At some point they will have to beginning tightening monetary policy as the endless supply of artificially cheap money would have negative consequences for the US economy. The FOMC has been meeting for the last two days and at 19:00 (London) the outcome of the meeting will be announced to the markets. Speculation and front running of the expected tapering has engrossed traders for the last…

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On Wednesday the FOMC released the minutes for their meeting held June 18th and 19th. Fed Chairman Ben Bernanke had signalled to the markets that he intended on tapering the quantitative easing later this year. The minutes stated that certain members of the FOMC proposed that a reduction in asset purchases could be warranted sooner than Bernanke’s “end of the year” stance. Following the release of the minutes, the Fed Chairman gave a speech in Boston attempted to ref…

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The FOMC met on Tuesday and Wednesday with the head of the Federal Reserve Ben Bernanke announcing as expected to leave rates unchanged at 0.25% and current policy unchanged. Trading throughout the European session on Wednesday had been subdued as traders awaited Bernanke’s speech and Q&A session to see when tapering of the current quantitative easing programme would occur. Speculation, as to when “tapering” would occur, has been the topic for analysts and market commen…

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