The aftershocks of FOMC

26 September, 2016

The FED did not raise interest rates last week, as it was anticipated by many market participants. It seems like the FED decided to go with status quo and wait until a new American president is elected. We are waiting for a rate hike to take a place in December as it would be logical and a well justified thing to happen. The same thing happened a year ago and it would make sense, if the history repeated itself. The market would be happy for Christmast!

Of course, it is not so easy to get the monetary policy back on track after so many years of it being lacking, yet it is a necessary thing to do. Mainly because the interest rates have always leveraged economy, and the FED wants to bring such systems back into action. However, an inflation is one missing piece of this puzzle especially when it comes down to the world economy.

GBP/USD

As for the British currency, market operators keep shortening the long positions as the rest of market participants keep extending them while shortening the short positions.


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