In this morning’s forex report, Andrew Wilkinson predicted that today’s statement by the Federal Open Market Committee (FOMC) would “convey an unchanged message in which they see a patchy economic recovery warranting an extended period of easy monetary policy.” He was right, as the FOMC said it would maintain the Fed funds rate at 0 to 0.25% and that economic conditions “are likely to warrant exceptionally low levels of the Federal funds rate for an extended period.”
Meanwhile, Australia raised its rates again this week, to 3.5%. So for now, the Australian dollar is still hot and the U.S. dollar is still not. Looks like loose monetary policy will continue in the United States for as long as the economic picture remains somewhat bleak. In Futures’ December issue, we’ll talk to several economists about the outlook for recovery and which markets are set for a breakout or breakdown in our Hot Markets of 2010 feature. The answers may surprise you.
Tags: Australian dollar, economy, Federal Reserve, U.S. dollar
