Thursday, October 30, 2008

Fed Cuts Rates

The Fed came in today and cut rates 50bp as expected. Market pricing was split between 50 and 75bp. Today's move is in line with what the rest of the world has been doing, that is cutting rates in an attempt to shorten the economic slowdown we have been experiencing.

Their statement was quite clear. We will "monitor economic and financial developments
carefully and will act as needed to promote sustainable economic
growth and price stability."

The Fed clearly believes that the multiple policy initiatives that have been put in place will help to alleviate the slowdown which we are currently experiencing.

The Fed also said that it stands ready to ease further if economic and financial markets warrent as "downside risks to growth remain". I think that economic activity will remain soft and there is a good possibilty of further rate cuts in December.

I look for Emerging Markets currencies to improve going into the weekend but clearly we are not out of the woods yet.

Good Luck and Good Currency Trading.



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