As you are probably already aware, the US FOMC ended its meeting in NY with the announcement that it would be buying up to $300 Billion worth of US Treasuries as well as another $750 Billion in mortgage backed securities over the next six months.
The reaction was swift and decisive, as the US Dollar was violently sold across the board. The resulting moves were huge, with the EUR/USD and GBP/USD pairs gaining over 4 big figures, and USD/JPY dropping like a stone from the 98.30's to the 95.80 region. The Dollars 3% collapse was the biggest one day drop since the Reagan presidency in 1985, as well it is the first time the US government has directly bought treasuries since the Kennedy presidency in the early 1960's. Quite a historic day..... The question was then if the Dollar weakness would continue into Asia, and it did not.
EUR/USD peaked at 1.3534 in early Asia and gradually slid to a low near 1.3418 before ending the session nearer to 1.3450. Some traders are now looking at the next resistance in the Euro up at the 200 day moving average at 1.3900. The GBP/USD hit an early high of 1.4331 and eventually dropped to under 1.4170, exiting the session close to 1.4210.
Finally, USD/JPY was near 95.60 early, hit a 96.60 high effortlessly, and was then beaten down to below 95.50 as of this writing. EUR/JPY managed to slide from 130.30 to just under 128.30 during that same timeframe....
Although the near term view of today's dramatic action was a detriment to the Greenback, it remains to be seen if this will be looked back on six months or a year from now as a spark that helped turn things around.
Upcoming Economic Data Releases (London Session):
| 3/19/2009 | 7:15 | SZ | Trade Balance | FEB | 2.03B | - - |
| 3/19/2009 | 7:15 | SZ | Exports (MoM) | FEB | 6.70% | - - |
| 3/19/2009 | 7:15 | SZ | Imports (MoM) | FEB | 0.80% | - - |
| 3/19/2009 | 9:30 | UK | Public Finances (PSNCR) | FEB | -25.1B | 4.5B |
| 3/19/2009 | 9:30 | UK | Public Sector Net Borrowing | FEB | -3.3B | 8.3B |
| 3/19/2009 | 9:30 | UK | M4 Money Supply (MoM) | FEB P | 2.50% | 1.40% |
| 3/19/2009 | 9:30 | UK | M4 Money Supply (YoY) | FEB P | 17.50% | - - |
| 3/19/2009 | 10:00 | SZ | ZEW Survey (Expectations) | MAR | -57.7 | - - |
