Daily FX Commentary, January 26, 2012

Federal Reserve Chairman Ben Bernanke did not disappoint us yesterday, as the FOMC rate announcement and forecast became the highlight of the day, and from the market’s perspective, possibly a game changer in setting forward looking expectations. “Exceptionally low rates through 2014” will be the phrase most quoted today. The FED also set a goal of 2% on inflation and has also left the door open to further “Quantitative Easing”, should inflation remain below target and unemployment stubbornly high - the current economic environment in the US. This sent gold to a six week high and USD/CAD to parity with a little help from our friends across the pond. European markets also took EUR/USD up through 1.3100.
 
USD/CAD is seeing good bids below parity, and as USD sellers exhaust themselves, look for a pop higher in funds to find better levels to sell. Buyers should have their bids in, as we haven’t seen these levels in 3 months, and month end demand should also be kicking in, providing further support.
 
Markets are continuing the risk on trend this morning with stock futures up ahead of some key economic data out of the US today. Greek debt talks are scheduled to resume today adding to the optimism.

USD/CAD 1.0015
EUR/USD 1.3157
GBP/USD 1.5695
AUD/USD 1.0670

You miss 100% of the shots you don't take.
Wayne Gretzky