Fed’s decision to keep zero-rates until the end of 2014 triggers a carry trade rally

By GG Analyst in Reviews 0 Comment

EUR/USD

The Federal Reserve surprised the markets with the promise to keep the rates at zero until the end of 2014. Before that the Fed had claimed to keep the rates there until mid 2013. This news sparked off a rally in the markets. The dollar fell across the entire spectrum of assets as well as against other major currencies. The euro closed the day above 1.31, where it keeps trading now. Besides, the rally in the stock markets is still at full tilt – it has brought S&P to the end-July levels, which the stock markets have unsuccessfully tried to break more…

Markets are Getting Ready to Difficult 2012

By GG Analyst in Reviews 0 Comment

EUR/USD

Yesterday the single currency continued its decline on the increasing bids that the ECB would keep tempering their monetary policy. So, market participants have focused on the amount of the ECB’s reserves. The latter have already made 2.73 trln euros. But the right way to compare the ECB’s reserves with those of other CBs is to consider them in relation to GDP. And at this point they make impressive 29% against approximately 20% of the Federal Reserve and the Bank of England. It’s worth mentioning that the ECB’s balance has doubled over the past six months and is very likely to more…