Up and away of the USD

Met my friend Eusof yesterday, he's also a forex enthusiast. Well, we had a good time talking about some technical analysis skills, but on my end, I really find what I could say meagre in depth and amount. After all, I'm not quite a technical guy, so far my experiments are on whether the fundamentals affect the market directions, and that itself isn't quite going anywhere.

Like I said, I need to figure out my motivation and start believing I can be a forex pro someday. In fact, not just some day but a definitive date like by the time I end Year 1 in varsity or something. Think I better spend some time thinking about this.

Surprisingly to Firman, the USD actually appreciated. According to news, the Fed Reserve Board hinted that there would be little chances for rates hikes over the next few months. This was backed up the core inflation and consumer inflation data being negligible. Controlling inflation has been high on the priority of the current Board, so this ism really good news.

And so how is the overnight interest rates inportant to the economy or speculators? From what I've learnt, interest rates(i/r) are linked to long term loan rates, which then becomes the cost of borrowing for both consumers and businesses. Given a possible drop in i/r, the cost of borrowing would drop and domestic consumption and investment would actually go up, giving a boost to the ailing US economy. That might be the reason why speculators pick up on this piece of news and bought into the USD. However, this piece of news was released on Monday, we still can't figure out how come it hit the market within a short 2 days. As Firman noticed, there where instances where the news took 2 weeks to affect the market.

I think this experiment has to change to find out what are the types of major news that affect speculators and the economy and how long does the effect take to occur.

In any case, I'm hoping I'll see some work done for my tuition flyers initiative. Maybe I'll go out and distribute some of those today.