Kathy Lien is Director of Currency Research at GFT, and runs KathyLien.com.
Kathy has a Bachelors degree in Finance from New York University. Kathy has written for Stocks and Commodities, CBS Market Watch, ActiveTrader, Futures and SFO Magazine. She is frequently quoted on Bloomberg and Reuters and has taught seminars across the country. She has also hosted trader chats on EliteTrader, eSignal, and FXStreet, sharing her expertise in both technical and fundamental analysis.
Tuesday's FOMC meeting will be remembered for decades to come as the Federal Reserve brings interest rates down to the lowest level this generation has ever seen.
US retail sales and producer prices were basically in line with expectations but that does not undermine the fact that the data was very weak and confirms that the Federal Reserve will be cutting interest rates by 75bp next week.
The only reason why anyone would buy Treasury bills at negative real return is if they believe that recession will deepen, driving bond prices higher and yields further below zero.
The daily average trading range has doubled for all of the actively traded currency pairs in 2008, with some currency pairs even seeing a 200% rise in their average daily range.
If the equity market managed to rally despite news that 533k jobs were lost from the US economy last month, then Obama's pledge to increase spending this weekend and the developments for the Big 3 automakers will only help.
Currencies and equities sold off aggressively following the release of the labor market numbers, they clawed their way back to end the US trading session in positive territory.
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