Will Dollar Forex Futures Strengthen with QE2 Now in the History Books?
If one thing is certain in our forex markets, it is that they will continue to fluctuate, but the direction of prevailing trends will always be dictated by the market’s interpretation and assessment of numerous economic variables. Some factors obviously carry more weight than others in these minute-by minute valuations, but analysts and investors must go one step further when pricing forex futures by extending their best guesstimates over a subsequent period of time.
The recent pronouncements by Bernanke that QE2 is now concluded and that a QE3 program has a low probability of ever happening will undoubtedly revise our visions for the future for currency markets. Back in April, many of the best currency forecasters opined on the impact of this very topic. Most agreed that there would be little reason for the Dollar to improve. The Fed would maintain its low interest rate posture, as long as inflation was in check, which Bernanke claimed in his recent speech. Based on a survey of more than 70 economists, the Fed is also expected to keep its target rate at 0.25 percent or lower for the balance of 2010. - Read More
