Shares rallied and the dollar fell as the Federal Reserve announced last night that it was maintaining its ultra easy policy stance. The USD sank to a three year low against a basket of currencies, with the euro (after reaching 17-month highs of $1.4881) looking to a break of $1.50, as Fed Chairman Ben Bernanke said the central bank had no timetable to hike rates. A funding currency of choice, further dollar weakness is anticipated as the Fed also said that it will end its bond buying programme in June …

The euro came under downward pressure versus the dollar in early morning trade, with sellers emerging after a number of attempts to break through resistance points failed. Although still relatively strong as it is underpinned by the euro zone’s higher interest rates, the single currency is being overshadowed by sovereign risks concerns. In particular, there has been further talk over the weekend of Greece restructuring its debt with reports from some sources saying that the IMF is in favor of such a move. Meanwhile, Germany was denying that it has …

The dollar remains generally weak, hitting a fresh 16-month low against a basket of currencies in early morning trade as markets remain convinced that the Federal Reserve will keep its loose monetary policy, widening interest rate differentials in favour of higher-yielding currencies. According to Beige Book released last night (which will form the basis for discussion at the next FOMC meeting), the Fed believes that the US economy continued to improve over the past month on gains in manufacturing. However, firms are feeling the effects of higher energy and raw …

It seems that last month’s G7 intervention was the turning point for the Japanese Yen. The Group Of Seven Industrialized nations stepped in the currency markets on March 18th in order to halt the Japanese yen rise. The coordinated intervention occurred after the yen soared following a massive earthquake, tsunami and nuclear disaster, which struck Japan last month. Speculation the Japanese would liquidate their overseas assets and repatriate their funds for reconstruction triggered a demand for the yen pushing it up to record highs.
The appreciation of the yen created a …

The European Central Bank (ECB) is deciding on its next monetary move on Thursday 7 April at 11:45 GMT. This time around the market is pricing in the first interest rate hike following the financial crisis three years ago.
During the last interest rate meeting ECB President Jean Claude Trichet expressed the central bank’s growing concerns on higher price levels. Trichet said that ‘strong vigilance’ is needed indicating a rate hike as soon as April. Consumer Price Index revealed a higher than expected 2.6% gain in March adding to the expectations …

After a spike higher going into the weekend and hitting a 2011 high of $1.4268, the euro was largely range bound versus the USD yesterday before coming under some modest selling pressure in early morning trade on the back of news that Moody’s have downgraded Portugal’s sovereign debt. The dollar, however was held back by dovish comments from the Fed’s president overnight. Following on from comment from the Fed’s Dudley late on Friday, Bernanke sought to downplay fears of inflation, suggesting that monetary policy will remain on hold for some …