Posts Tagged ‘Ben Bernanke’
Forex Trading – Breakind Down Bernanke’s Testimony to Congress
Thursday, June 10th, 2010In testimony before the House Budget Committee Bernanke said that the economy will continue to grow at a moderate pace, with expectations of GDP growth of 3.5% over the course of 2010. However that growth rate will mean a slow reduction in the unemployment rate which would keep inflation subdued. Those factors will likely keep the Fed on the sidelines in terms or raising interest rates. A strong May non-farm payroll report may have pushed up the timetable for a rate increase, but that was not the case.
While stimulus spending is due to wind down, Bernanke cites increases in consumer spending and increases in spending by businesses on equipment and software.
“Real consumer spending has risen at an annual rate of nearly 3-1/2 percent so far this year, with particular strength in the highly cyclical category of durable goods. Consumer spending is likely to increase at a moderate pace going forward, supported by a gradual pickup in employment and income, greater consumer confidence, and some improvement in credit conditions. In the business sector, real outlays for equipment and software posted another solid gain in the first quarter, and the increases were more broadly based than in late 2009; the available indicators point to continued strength in the second quarter. Looking forward, investment in new equipment and software is expected to be supported by healthy corporate balance sheets, relatively low costs of financing of new projects, increased confidence in the durability of the recovery, and the need of many businesses to replace aging equipment and expand capacity as sales prospects brighten.”
Forex Market News – Dollar to Go Volatile on U.S. Homes Sales and Bernanke Speech
Saturday, August 22nd, 2009The Greenback is anticipated to go volatile today on U.S. Homes Sales data and the speech by Federal Reserve Chairman Ben Bernanke at 14:00 GMT. Bernanke is anticipated to discuss the economic crisis and recovery. With regards to the home sales data, the figure is anticipated to arise to 5.03 million, up from the previous figure of 4.89 million. Forex traders should follow both of these events closely as they’re set to determine the USD’s main crosses for Friday’s trading. (more…)
The Shift from Fundamentals is Coming….
Thursday, July 23rd, 2009The equity markets are a marker for risk appetite, and the dollar and Yen usually suffers as investors flock to stocks to quench their hunger. But this week has seen the reverse happen alongside puzzling comments from US Federal Reserve Chairman Bernanke, ECB President Trichet and to some degree, the Japanese Finance Minister as well.
As the US stock index, the Dow Jones Industrial Average raced towards 9,000, a level unseen since October 2008, the Dollar too made gains, albeit not as dramatic. The Nikkei Index was also up this week while the Yen as well did not suffer for the excitement of it all.
Patterns like this are rare, and make trading difficult, especially for fundamental traders who rely on hard data, not theoretical formulas and exotically named technical achievements (no offense Fibonacci…).
Yesterday saw Ben Bernanke, AKA helicopter Ben, give a second round of testimony to congress, this time in front of the Senate Banking committee. And while he pretty much towed the party line that he established the day before, he made one alteration which sent the Dollar on a roller coaster as Forex traders tried to figure out what he was saying.
He spoke of positive signs out of the housing market one day after putting part blame for the woes of the country on the depressed housing market. It is inconsistencies like this that can cause panic, and for a while with the Dollar it seemed as if it had.
I trade on fact, things I read, things I hear, things I piece together like a jigsaw puzzle – and for the most part it has worked out well for me. The stock market is not the same kind of market as the Forex, it is a market where emotions and psychology can rule the day.
The Forex market is too large for that, Online Forex traders know this to be true, sentiment cannot move a currency – but hard data, good or bad can. But what I witnessed this week has made me reconsider this. What I saw this week was pattern trading based on emotional instinct, not fact and numbers.
The US is in a bind, and while the Chairman of the Central Bank might allude to positive signs, the warning signs are large and in our faces. With swelling debt, with an administration bent on “fundamentally changing the United States of America” (Obama’s words, not mine) by redistributing wealth and socializing private industry at an enormous cost to not only the current taxpayer, but future ones as well – I do not see a strong Dollar right now. And I might not ever again if this continues.
It would be comforting to know that I am wrong, I would want nothing more than that. But seeing how the game of politics has consumed every inch of what is supposed to be objective and non-partisan departments – I do not believe I am.
Trichet wants to keep his job. Bernanke does too. Is it fair that their impartiality can lead to their dismissal (or non re-upping of their contracts)?
But, unfortunately, this is what we have – and in the long run it will ruin the trust that the markets have in any data that come out– and lead to the equitization of the Forex – we saw the beginning this week.
