FXstreet.com Live Sessions Archives: Live Coverage: Fed Interest Rate Decision

Read full Fed Meeting coverage we held on June 25th, 2008.

Live Coverage: Fed Interest Rate Decision

(06/25/2008)
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6:42

FXstreet.com -

Good morning, good afternoon and good evening to everyone all over the world. Today's FED Interest Rates Decision Live Coverage will start in 5 minutes. I am really happy to introduce Valeria Bednarik who is going to take part in this live event today as a co-presenter. She will be giving us a direct picture fo the market status while we follow the news and comments sent by our main sources and published by our Editors on FXstreet.com.

6:45

FXstreet.com -

Valeria Bednarik has been an active Forex trader for the last 3 years, specializing in the International Foreign Exchange Market. She also graduates in the Universidad Catolica del Salvador, in Argentina, as a Public Account, specializing in financials and cost managements. She currently manages an important clients portfolio for IFX Markets, Boston and is senior trader manager at Molfx-Management; besides she works training new traders with Trader College LLC specializing in technical analysis, for the English speaking community.

6:47	Valeria Bednarik - Hello everybody, welcome to this live coverage, is an honor to be here with you today.

6:48	FXstreet.com - Hello Valeria, itâ��s a pleasure to have you today with us.

6:48	FXstreet.com - Valeria, you have recently Â taken the task to daily update the Advisor Blog at FXstreet.com, and you are doing an excellent job, if I am allowed to say!

6:49	FXstreet.com - http://advisor.fxstreet.com/

6:50	Valeria Bednarik - thank you, really! for me is also a pleasure and an honor. Hope people could join and find it useful

6:51	Valeria Bednarik - I have just published in the blog, the extreme levels majors can reach if the statement trigger a dollar rally. You can all see it there Â

6:52	FXstreet.com - http://advisor.fxstreet.com/2008/06/hawkish-or-dovi.html#trackback

6:53	FXstreet.com - Everyone can now read your comment, Valeria, but could you sumarize what do you expect for the FED announcement today?

6:53	FXstreet.com - I would also like to know what is the audience opinion. So let's vote the poll I will publish right now!

6:53

[Poll]

Will the Fed Hike rates?
Yes, they will hike by 25bp

( 20% )

Yes, on an aggressive move they will rise 50bp

( 0% )

No, they will stay on hold at 2%

( 76% )

No, they will low 25bp, to 1.75%

( 4% )

6:54	Valeria Bednarik - I expect no change in the actual rate, but I believe the tone of the speech could trigger some good movements too

6:55	FXstreet.com - Valeria, we have started to receive some comments from our viewers and I would like to ask you if you could help them with your advice

6:55	Valeria Bednarik - A hawkish tone, meaning a probable rate hike in the short term, could give some action to dollar bulls. A dovish comment could trigger a dollar bearish

6:56	Valeria Bednarik - Sure

6:56	[Comment From Eurox] When do thet anounce the rate?

6:56	Valeria Bednarik - in about 20 minutes

6:56	FXstreet.com - Hi Eurox, the data will be announced at 18,15 GMT, in 20 minutes

6:57	FXstreet.com - but we will publish it live here

6:58	FXstreet.com - We are going to start giving answer to some of your comments, In the meantime I recommend you to read the excellent preview that our editors team prepared for the FED

6:58	FXstreet.com - Central Banks: Fed â�� Preview of Jun 25 Meeting by FXstreet.com

6:59	[Comment From Anil] i was wondering whether oversold/overbrought will have major roles in how it goes?

6:59	Valeria Bednarik - The extreme levels are important Â because no matter what happens, majors cannot run 1000 pips straight from here, and those are Â good target or even rebound zones to Â the one that dares to get some pips

7:00	FXstreet.com - Some attendees are sending interesting comments and opinions.

7:00	[Comment From Eurox] Great, thank you. Since this will be a very close call, I think the market has not priced in the decision.

7:00	[Comment From Eurox] I except high volatility against the Euro.

7:00	Valeria Bednarik - I expect the same Eurox! let's see!

7:01	FXstreet.com - Thanks Eurox!! I would like to encourage you to send your opinions and comments. Vale will try to answer the questions and I will be publishing your comments and opinions.

7:01	[Comment From Abdelhakeem] thanks for the usefull coverage, what is in your opinion ithe impact on oil f the Fed holds the interest rate?

7:02

Valeria Bednarik - Oil is the main cause of inflation all over the world right now I think. and is a contradiction that higher oil prices are one of the dollar weaking cause. Oil is falling today, yet as long as oil stays above 130, inflation concerns will remain high and rates should be untouched

7:03	FXstreet.com - Here you have the FED website, after the announcement they usually publish the release there. It's interesting you visit it. http://www.federalreserve.gov/

7:03

[Comment From Alexander Melvinsky]
Given that Bernanke has been talking the Hawkish talk lately and getting lots of heat for it despite the data pointing to the negative for the economy, how likely do you believe even having a Hawkish tone will help the dollar? Would seem like it may be construed as the kid that cried wolf

7:05	Valeria Bednarik - I think exactly the same about mr Trichet speechs ! the crying wolf? Europe is also having a hard time. besides, this month Paulson finally said that US is worried about a weak dollar, and that was not that clear in the past

7:06	FXstreet.com - The FED will publish the Rates decision in 10 minutes... Meanwhile, keep on sending your comments and questions. We will try to publish and answer as many as possible.

7:06	FXstreet.com - I would also like to remind you that you can read the Preview of Jun 25 Meeting by FXstreet.com

7:07	FXstreet.com - Now it's time to announce the International Traders Conference that will be held in Barcelona on October. FXstreet.com is the organizer of the event.

7:08

[Ad popup]

International Traders Conference 2008 View

7:08	FXstreet.com - Here you have a video of the past edition.

7:08

[Video file]

ITC 2007: The attendees' experience Play

7:09

[Video file]

ITC 2007: The editor's cut Play

7:10	Valeria Bednarik - Also it's good to remember that for the previous 7 month the FED has been cutting rates. A hold is a change in the policy and put sentiments and expectations in near term hikes.

7:10	FXstreet.com - More comments from our attendees today.. And just 5 minutes for the announcement!!

7:10	[Comment From steve (UK)] I it will largely be a none event. Fed will hold,charts will whip-saw around for 30 minutes or so , then settle down in the familiar range we've had lately

7:10	[Comment From Alexander Melvinsky] In addition - it is unrelated to this discussion, but the interest rate for South Africa in the world interest rate page is supposed to be 12% (upped yesterday)

7:11	[Comment From Alexander Melvinsky] What will the implications of the almost certain hawkish statements that will be made after? Will that bode well for the dollar, or will it merely keep it buoyed where it is?

7:11	Valeria Bednarik - Hope it don't Steve, anyway i believe any of us is able to exactly predict what will happen until we know the statement

7:13	Valeria Bednarik - Alexander, dollar is far from really key levels, and for example agaisnt Euro seems to find himself very comfortable around 1.5500.. only a technical break ok key levels could trigger majors outside these last days range

7:13	Valeria Bednarik - Rates unchanged

7:13	FXstreet.com - Rates have been unchanged: http://www.federalreserve.gov/newsevents/press/monetary/20080625a.htm

7:15	Valeria Bednarik - Rates unchanged a first impulse agains dollar. but too much nervous movements still

7:15	FXstreet.com - The Fed has announced the rates decision 3 minutes before the scheduled time...

7:17	Valeria Bednarik - seems dollar could start gaining ground from here. Japanese yen is ready to test 108.60 previous maximum zone

7:17	FXstreet.com - we will be awaiting now the news coming from our main sources... In the meantime Valeria is watching the market to give you a picture of what's happening right now

7:19	Valeria Bednarik - after any fundamental, is good to wait a 15 minutes candle to let market diggest the new. Talking about euro, under 1.5580 or above 1.5623 we could see some action

7:20	FXstreet.com - More comments and questions from our attendees gathered here today to follow live this Fed Interest Rates decission

7:20	[Comment From Alexander] What is your take on the accompanying rheotiric, Valeria? Neutral/a bit dovish?

7:21	Valeria Bednarik - quite neutral really, i'm reading it and nothing new i was expecting a more hawkish tone

7:21	[Comment From lord] buy GBP NOW

7:22	[Comment From Guest] Valeria, what is your take on the accompanying rheotoric? Neutral/a bit dovish?

7:22	Valeria Bednarik - GBP could run up to 1.9775 still not confirmed

7:24	[Comment From Alexander] Valeria, do you have any comments in regards to the effect of this news on the Aussie?

7:24	Valeria Bednarik - AUD alwys moves quicker and faster than other majors, and hepls us predict the euro and gbp reactions.

7:24	[Comment From lord] gbp will hit 9800 soon....

7:25	Valeria Bednarik - euro and swiss frann are almost ready to break. Euro targetting 1.5660

7:25	[Comment From Dark] valeria, u think it can break 108.6 with this news ?

7:26	Valeria Bednarik - Right now, majors are moving in the opposite direction.. a more hawkish coment will proably done it, yet at this point, yen is more likely to return to 107.70 than breaking the tough zone aronf 108.60

7:28

FXstreet.com - First News coming from our main sources:
Fed keeps key funds rate unchanged at 2.00 pct in decision
Following a widely expected script, Federal Reserve Board Chairman Ben Bernanke and his colleagues left a key interest rate target unchanged for the first time since steady rate cuts began in September as they signalled inflation is more worrisome than slowing economic growth and the credit crisis. The Fed's policymaking Federal Open Market Committee maintained the federal funds rate target at 2.0% during its two day meeting ending today.

7:29	Valeria Bednarik - euro close to 1.5660... yet GBP has a heavy wall in the zone around 1.9725/35.. Japanese yen pass trough 108.06... let's see if reaches the zone of 107.70 in the next minutes

7:29	FXstreet.com - Valeria keeps on watching the markets reaction, I would like to remind you that you can send comments and questions to Valeria.

7:31	FXstreet.com - If you are enjoying the Live Coverage today with Valeria, you can follow her market view daily in The Advisor Blog

7:33	Valeria Bednarik - The dollar bearish impulse has come to a temporal end. Euro under 1.5630 or JPY above 108.06 will end it completely yet early to say.. if they pass previous maximums/minimums, we could see another dollar bearish rally

7:33	[Comment From Ben] Hi Valeria, Hoe do you see the GBP/USD now? Do you think it can reach 1,98 ?

7:34	Valeria Bednarik - As i told you I believe the pair has a really tough resistance zone around 1.9735... only above it we could see it running up.

7:34	FXstreet.com - Thomson Financial News has just published the Text of today's FOMC policy statement

7:35	FXstreet.com - The Federal Reserve leaves Funds Rate unchanged at 2.0% from FXstreet.com

7:35	[Comment From Ricardo ObregÃ³n] Valeria, Do you think USD can gain more pips against majors? I don't see it too strong, I think Bernanke has been conservative with his comments.

7:36	Valeria Bednarik - yes Ricardo i think saw.. the speech has not been as hawkish as I expected..

7:36	Valeria Bednarik - think so, sorry for the spelling

7:37	[Comment From Guest] I thuoght commentary was USD bullish as said inflation more concern than economy which is improving....why the move up in cable?

7:39	Valeria Bednarik - statement was not dollar bullish, and all majors start ralling against dollar, included GBP that anyway, seems not strong enough to continue

7:40	[Comment From John] without a rate hike, the decline in dollar should continue.

7:41	Valeria Bednarik - there is the second impusle dollar negative let's see if GBP pass trough and continues to the target zone at 1.9780

7:42	Valeria Bednarik - John dollar is weak, america is in trouble, no doubts about that just rtemember the unemployment rate at 5.5%

7:42	[Comment From Alex] downside risks to growth appear to have diminished somewhat, and the upside risks to inflation and inflation expectations have increased - this should be USD positive no? Why is USD weakening vs GBP? Thanks

7:42	Valeria Bednarik - Euro taegeting 1.5710 now

7:44	Valeria Bednarik - youre right Alex, but as long as the US don't change their policy, we wont see greenback recovering.. however is not something we will see today, nor this week, nor this month.. economic process takes time

7:44	FXstreet.com - More news coming from our main sources: U.S. stocks rise further in volatile trading after Fed's no action

7:45	FXstreet.com - Please, keep on sending your comments and questions, please

7:45	[Comment From Dave] Do you think the initial reaction to the news was caused by traders covering their positions and then real sentiment took over to where the markets are now?

7:46	Valeria Bednarik - Always the first impulse in cases like this, could be a position covering. that's why i like to wait for the second, real one. By the way, AUD continues moving up, and GBP reached the key level mentioned, ready to test 1.9770

7:47	FXstreet.com - If you want to follow currencies movements in Real Time like Valeria does, visit our Â Streaming Forex Charts (Netdania/FXCM) section: 22 currency pairs, 7 chart types, 13 different time frames, flexible line tools and 21 technical indicators, for FREE!

7:50	Valeria Bednarik - Market sentiment turns dollar negative after the speech.. after a correction from these levels, we will see majors continuing up. Japanese Yen however, will remain above 107.00

7:53	Valeria Bednarik - Canadian and Australian dollar are right now in Â important level.. if they break trough the rest will follow

7:53	FXstreet.com - I would like to remind you that you can follow Valeria's market vision daily from The Advisor's Blog you can also subscribe to the blog's RSS feed.

7:54	[Comment From Mr.Cad] If the fed decision is construed as hawkish then why is the dollar loosing ground and conversly why are the equity markets correcting down?

7:55	[Comment From John] Fed decision is not hawkish. Hawkish would've been a rate hike.

7:55	Valeria Bednarik - The statment is more dovish not hawkish... Â and equities are recovering some ground...

7:57	Valeria Bednarik - majors have one more impulse underway

7:58	[Comment From Alex] Can you explain impulse please? thanks

7:59	Valeria Bednarik - I hope I can! i call impulse at each straight movement majors do after the release of an important new... we use to way majors always define their trend after a big event

7:59	Valeria Bednarik - by two impulses.. to large movements. The second ones is the one that dares

8:00	Valeria Bednarik - the ine that define the trend to come.

8:00	[Comment From mike] impulse - a reaction to an event that may or may not we warrant based on an event

8:00	[Comment From steve (UK)] I hope the pound stays up there for now, there's a nice short trade lining up in a day or two :)

8:00	FXstreet.com - For all those who would like to take a break after the FED release, I would like to invite you to play the new Forex Game. You can win many prizes... Next week a SONY VAIO will be the big one!

8:00	Valeria Bednarik - thanks mike!

8:01	[Comment From mike] Nice job Valeria. This is my first time with the live coverage and it's very cool.

8:01	[Comment From Mr.Cad] To me the AUD looks like a good short at this level if it does not break on the upside from here.

8:02	Valeria Bednarik - Steve, in bigger charts, GBP remains bearish... as long as the descendnat trend line remains strong.. today that line was aroudn 1.9774

8:02	Valeria Bednarik - Thanks mike!

8:02	Valeria Bednarik - thanks Mike!

8:03	Valeria Bednarik - mr Cad, yes! with stop losses above 09606

8:07	[Comment From steve (UK)] thanks val, yeah i see that on the day chart

8:07	FXstreet.com - we are experiencing some connection problems

8:09	FXstreet.com - Euro and yen retraced to the 38.2% of the movement. if they are not able to break trough, we will see a continuation of the movement against dollar

8:10	Valeria Bednarik - Sorry! coverlite is experiencing problems and i have trouble conecting let's see if we could continue

8:10	Valeria Bednarik - here we are!

8:11	Valeria Bednarik - Here we are! coverlite is experience some problems

8:11	Valeria Bednarik - ok im back! let see

8:12	Valeria Bednarik - Alex! long in GBP USD? 1.9755/70 could be the target zone

8:12	Valeria Bednarik - Mr Cad you asked about chf.. take a look at it is kind of Euro mirror! if CHF goes, Euro usually follows it

8:13	[Comment From ian pearson] i have aus selling area as .9650 i think .9600 abit too low

8:14	Valeria Bednarik - About EURO YEN not a great short Â form here... historical maximum and running up with no signs Â of exhaustion yet

8:14	FXstreet.com - We are experiencing some connection problems with Coveritlive, please apologies for any inconvenience

8:14	Valeria Bednarik - Ian ok! however, i can not see aussie reaching that level today

8:16	Valeria Bednarik - There they go! Eur and GBP in maximums if pass 1.5710 1.9775

8:17	Valeria Bednarik - JPY with a tough zone between 107.50/60 can't see Â it falling further from there today

8:17	[Comment From Anil] so u are saying to short after?

8:17	Valeria Bednarik - Anil wich pair?

8:18	Valeria Bednarik - yes... from 1.9760/80

8:18	[Comment From Anil] gbp/usd

8:20	Valeria Bednarik - GBP/USD is really a very technical pair: i believe it would respect the mentioned trend line and give at least a 30 pips rebound

8:20	Valeria Bednarik - see it right now is almost there in the line!

8:22	Valeria Bednarik - that doesn't mean the line will resist for ever. But at this time, and after the last rally, is more than probable

8:22	Valeria Bednarik - the same goes for Euro... the top level will be between 1.5700 1.5710

8:23	FXstreet.com - The Live coverage is in its last minutes, please, send your last comments and questions.

8:23	Valeria Bednarik - Ariound 1.0330 for Swissie and 107.60 for Japanese Yen

8:25

FXstreet.com - To sumarize what happened today: Â Federal Reserve Board Chairman Ben Bernanke left a key interest rate target unchanged for the first time since steady rate cuts began in September as they signalled inflation is more worrisome than slowing economic growth and the credit crisis.

The Fed's policymaking Federal Open Market Committee maintained the federal funds rate target at 2.0% during its two day meeting ending today.

8:25	Valeria Bednarik - Felipe Eur wont run much more as I was saying

8:25	[Comment From Felipe] Valeria do you think EUR/USD will keep in the current rate? it keeps going up..

8:25

FXstreet.com -

The Fed said it expects inflation to moderate in the coming months and next year, but "in light of the continued increases in the prices of energy and some other commodities and the elevated state of some indicators of inflation expectations, uncertainty about the inflation outlook remains high."

The expectation that inflation would moderate this year and next is pushed back from April's meeting, when the statement said that inflation would moderate "in coming quarters."

Still, analysts said rate hikes are not likely to be in the cards at the next meeting on August 5.

8:26	Valeria Bednarik - not today.. we could see a correction from here, and then tomorrow will be another day!

8:28	FXstreet.com - Time to conclude this live coverae of the FED rates announcement. We would like to thank to Valeria Bednarink for her participation today. IT has been a great pleasure to have you today with us Valeria!

8:28	Valeria Bednarik - ok goodbye everyone it has been a pleasure to be here, hope you enjoy it! Hope to see you all soon at the weblog! Quite dark dollar destiny from here, as the statement was far beyond what i expected!

8:31	FXstreet.com - I will follow the markets reactions within the next hours live in your blog, Valeria: http://advisor.fxstreet.com/

8:31	[Comment From Alex] Thanks for your advice....close out at the 1.9770 level in anticipation of retracement/pause/profit taking and looks like that was a good level....where do you get your resistnance levels from? thanks