Forex News

The Japanese yen is holding steady on the Forex market today after interest rate was left unchanged at 0.5% and the stock markets fell slightly.

The Reserve Bank of New Zealand Governor, Alan Bollard, said yesterday that he won’t be reducing the country’s key interest rate from its record high value in 2008, because the national inflation still remains the major concern.

Yesterday the Federal Reserve lowered the benchmark interest rate from 3.00% to 2.25% to help the banking institutions during the times of global financial turmoil, but will the investors’ expectations for the further cuts be satisfied?

According to Australia’s largest mortgage provider, Commonwealth Bank of Australia, the U.S. dollar will perform worse than experts previously expected for this year.

The Reserve Bank of Australia increased the national benchmark rate for the second time in 2008 — from 7.00% to 7.25%. The last time interest rate was increased on the 5th of February.

The Australian dollar rose today against other major currencies, as the bank’s minutes release hinted markets that the Reserve Bank of Australia will probably increase the interest rate by 25 basis points again next month.

Today two important interest rates decision were highly anticipated by the markets — the monetary policy decisions by the European Central Bank (ECB) and the Bank of England (BoE).

The majority of Forex traders expected that the Reserve Bank of India will lower the main interest rates today to pare with recent emergency cut by the Fed and the anticipated additional interest cut at tomorrow Fed’s meeting. But Yaga Venugopal Reddy, Governor of the Reserve Bank of India, decided to leave the key interest rates at the same level.

Palaniappan Chidambaram, the Finance Minister of India, said yesterday that the latest emergency rate cut by the Fed will probably influence the next interest rate decision by the Reserve Bank of India.

The Australian dollar gained yesterday after the Federal Reserve announced an emergency rate cut from 4.25% to 3.50%. It also continued to gain today through the most of the Asian trading session, but has already went down past the daily opening price.