FOMC Rate Decision, Durable Goods, Equity Dominance

German equity markets were getting sold heavily at the open, in what looks to a move that locks in the 8% trading day (15 days worth of trade in one direction) that came on Tuesday, whilst U.K. and French markets were heavily in the green; no wonder there was extreme volatility at the open of London trade that pulled the currencies all over the charts. The FOMC Rate decision is at 14:15 EDT today and will likely cause some volatility as trade desks get aligned for the expected Fed rate cuts.

There is nothing here until of note until the U.S. Futures market really gets going from around 07:00 EDT. Ahead of Durable Goods and a FOMC rate decision it once again will come down to the equity markets ability to hold in the green, or not. We have seen in overnight trade and at the European open that volatility and reaction to equity movement is still very much the order of the day, but hopefully that will calm down once the Fed's rate decision is out of the way. If so we are very well set for the next three months, times that historically have garnered the best results out of any others in the forex market.

Wall Street was able to make a dash for the finish and end equity trade in the green on Tuesday, and in doing so set the tone for global equity markets to test the resolve of Asian and European traders and their ability to continue the buying of stocks that started overnight on Monday/Tuesday. Asian traders did their part, but the European stock traders let things slip at their end at the beginning of play. The signal from the U.S. was that an equity bounce from dramatically oversold areas dragged the higher yielding currencies up against the dollar, and sent the Japanese yen lower. All of which would be expected under normal conditions, but 'normal' has had its challenges recently.

This is the last week of trade in the hedge fund's year, and apart from book-keeping for the next few weeks there will be no more chances to increase the dramatic holes in their equity balance sheets outside of Wednesday, Thursday and Friday trade. This may end up being nothing other than a fool's rally, care still needs to be taken in where we look, but many answers will come from the Asian and European market's ability to hold in the green.

Daily Forex Fundamentals | Written by TheLFB-Forex.com | Oct 29 08 09:54 GMT |

Federal Reserve May Cut Rate Today To 1% On Signs Of A Weak Economy

Federal Reserve May Cut Rate Today To 1% On Signs Of A Weak Economy

The Federal Reserve may lower its benchmark interest rate to 1 percent today, Tumbling commodities prices and weaker consumer spending are slowing inflation, which officials described as a 'significant concern' at their last scheduled meeting in September. Tomorrow, the Commerce Department will probably report that the economy shrank at a 0.5 percent annual rate in the third quarter. The Fed 'will be very aggressive,' said Mark Gertler, a New York University economist and research co-author with Fed Chairman Ben S. Bernanke. 'Inflation risks are off the table' and 'the issue now is how bad the recession will be.' The EUR/USD is currently trading at $1.2720 as of 8:29am, GMT.

The pound rose against the dollar and euro for a second day on speculation a rally in stocks will bolster demand for the British currency. A two-day gain by the pound versus the U.S. currency would be the first in more than two weeks as the FTSE 100 Index, a U.K. equity benchmark, soared 4.9 percent. Stocks surged yesterday in the U.S. and rose in Asia today. Chancellor of the Exchequer Alistair Darling will pledge extra borrowing today to support the economy as it enters a recession. The GBP/USD is currently trading at $1.6050 as of 8:47am, GMT.

Investors should buy the euro versus the dollar as global risk concerns ease, Citigroup Global Markets Inc. said, citing technical charts traders use to predict price movements. Investors who purchase the euro may gain as much as 4.2 percent as the 15-nation currency rallies from near a 2 1/2-year low, said Tom Fitzpatrick, head of global currency strategy at Citigroup Global Markets.

Economic Calendar

Time (GMT)	E Event	Currency	Period	Previous	Previous	Significance
23:00	Leading Index m/m	AUD		0.0%
21:45	Building Consents m/m	NZD		-7.9%		***
18:15	Fed rate	USD		1.50%	1.25%	***
14:35	Crude Oil Inventories	USD				**
12:30	Core Durable Goods Orders m/m	USD	Sep	-3.3%	-1.5%	****
12:30	Durable Goods Orders m/m	USD	Sep	-4.8%	-1.3%	***
09:30	Net Lending to Individuals m/m	GBP	Sep	1.4B	1.0B	**
09:30	Mortgage Approvals	GBP	Sep	32K	32K	**

Daily Forex Fundamentals | Written by Finotec Group | Oct 29 08 09:34 GMT |