Binary Options News : August 2, 2012
Fed Holds Back on Stimulus
Ben Bernanke wrapped up a 2 day monetary policy meeting stating that the Fed “will provide additional accommodation as needed to promote a stronger economic recovery” but kept interest rates unchanged at 0.25% and making no changed to policy in general, reinforcing earlier positions that it will stimulate the economy as and when needed. The Fed also pledged to keep interest rates at the “exceptionally low levels” until the end of 2014 at least.
The wait and see policy vindicated a little by the release yesterday of surprisingly strong U.S. payroll data reporting earlier that the private sector increased by a seasonally adjusted 163,000 in July, beating expectations for an increase of 120,000, the Feds wait and see policy, whilst refusing to take stimulus policies off the table sent the US Dollar down against most of major counterparts – falling 0.20% against the EUR, down 0.23% against the commodity linked AUD and down 0.21% against the Swissie. The ADP payroll data is seen as a weather vane for the official unemployment rate published on Friday. Whilst the release of the ISM manufacturing purchasing manager’s index in the US showed levels hitting 49.8 in July, up slightly from the 3 year low of 49.7 of June, it was below market forecasts for a reading of 50.2.
There was mixed to lower stock positions in Asian trading overnight. Hong Kong’s Hang Seng Index fell 0.37%, but Australia’s S&P/ASX200 was up 0.23% and Japan’s Nikkei 225 Index climbed 0.41% as Japanese car makers Honda and Toyota showing upward spikes in sales.
The ECB is set for an important meeting today with speculation mounting that it will take action to bring down Spain’s cost of borrowing, ECB president Mario Draghi has stated he is ready to do “whatever it takes” to support the euro, with many analysts stating that doing nothing is not an option.
With much of the investor focus rightly on the ECB meeting later today, binary traders should look towards Spanish debt auctions, UK interest rate announcement and US jobs data for heightened volatility.
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