How Will Euro-zone CPI Influence the European Central Bank in January?
– Carry Trades Rocket Higher as DJIA Rallies 4.2%, USD/JPY Falls Below 90 US Dollar Dives on Federal Reserve’s Aggressive Rate Cut, Teetering Above Key Support The US dollar plummeted across the majors on Tuesday as the Federal Reserve cut the fed funds rate more than expected, while signaling that interest rates will stay low for “some time.” Prior to the announcement, the markets had been anticipating a 50bp cut, but instead, the Fed delivered a 75bp reduction to bring the fed funds rate down to a target range of 0.0 percent – 0.25 percent. This unprecedented move led the greenback to experience its biggest 5-day drop since the inception of the euro in 1999, according to Bloomberg News, especially as the Fed said they would consider introducing quantitative easing by purchasing longer-term Treasury securities, which would essentially drive down longer-term interest rates. Overall, the Fed’s action have opened up significant bearish potential for the US dollar, especially as the lates
