FOMC Federal Fund Rate Decision & Statement 12/16/09

2:15pm (NY Time) US FOMC Rate Decision     Forecast 0.25%  Previous 0.25%
ACTION: USD/JPY       BUY 0.50%    SELL <0.25%

FOMC is going to release its short-term interest rate decision for the last time in 2009 and it is widely expected by analysts that FOMC will keep current rates unchanged until 2010.  As FOMC rarely make any changes to the key interest rate at the end of the year, there is really no expectation for a surprise change.  As far as FOMC officials and chairman Bernanke are concerned, they have stated on more than one occassion that FOMC will not raise interest rate until the latter part of 2010…

However, the real focus is the FOMC statements about future monetary policy.  If we get a rather optimistic statement with this rate decision, expect to see wide demand for USD; or if the opposite is true, then expect to see some USD consolidation over the recent gains.  The current situation with USD will probably not change as much unless we get some extreme unfavorable news out of US… with the market coming to a close in 2009, mostly likely we will see very little volatility after the release.

At any rate, if you have never traded this release, it is better to stay out to avoid unnecessary risk.  Watch how I trade this release live with my updated video tomorrow, I will go over several reasons for my decision as I evaluate this release in real time; once again, if you have never traded this release, stay out of the market.

If you have not downloaded my Currency Strength Meter and use it after news, you need to get it right away… It’s at http://www.currencystrengthmeter.com

Henry

UPDATE: We didn’t trade this release as the FOMC Statement came out with a very neutral tone.  Therefore immediate market reaction was muted, although we did see a hint in USD strength.  Result = no trade.

Related posts:

1. RBA Cash Rate Decision 11/30/09 (Interest Rate Decision)
2. Forex Analysis U.S. FOMC Interest Rate 09/21/11
3. RBA Cash Rate Decision 02/01/10
4. Trade Plan For RBA Interest Rate Decision 09/07/10
5. Forex Trade Plan And Video For RBA Cash Rate Decision 08/03/10
6. RBA Cash Rate decision 03/01/2010
7. Trading RBA Cash Rate Decision 06/01/10
8. RBA Cash Rate Decision 04/06/10
9. Forex News Trading Australia RBA Interest Rate Decision 12/06/10
10. BOC Interest Rate Decision 07/21/09

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