Surprise Rate Cut
The surprise 75 basis point rate cut after yesterdays losses brought the interest rate down to 3.5% and in doing so took the Dollar down with it. Euro, Sterling and Swissy all rallied against the Dollar.
The U.S now have the third lowest interest rate of the G7 currencies, just below Switzerland. Japan has the lowest rate and at just 0.5% and New Zealand has 8.25%. Between now and the end of 2008 we could see further cuts in the region of 100 bp in the U.S.
The USDCAD is struggling at the technical 200 SMA resistance as mentioned by the confluence yesterday (click here to read).
If you are a stock trader have you been concerned recently? The S&P500 sunk on opening but recovered and ended the day with a reversal candle. The markets are at levels of support now. The question is whether the support is sufficient to bounce the market and if so how high? It will be interesting to see what happens on this index during the week.
Lastly, congratulations to N.M who Javid mentored recently and has made over £45,000 profit in the lasy month. You can read his story in Thursdays update. Well done N.M!
Anne Chapman & Javid Shaik