FX Rate Outlook - 11.03.11

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*    Fed Fails Global Stimulus Hope, RBA Lowers Top End, ECB In Spotlight *    Risk Trends are Skewing Yield Differential Skews from Exchange Rates *    Using Monetary Policy Once again to Help Avert Crisis Written by: John Kicklighter, Senior Currency Strategist We have had a very active couple of weeks for monetary policy; and the general trend is towards more accommodation and thereby lower rates of return for FX traders. Perhaps the most highly publicized rate decision was the Federal Open Market Committee's (FOMC) announcement this past session - though it would ultimately end without any dramatic shifts in policy. Heading into the event, there were no expectations for a change to the benchmark lending rate (as it is already in a range between zero and 0.25 percent); but there was a modest chance that central bank would alter its extracurricular stimulus efforts. However, the Fed would maintain its recently adopted 'Operation Twist' approach with selling short-term Treasuries and reinvesting the capital (along with the proceeds of maturing mortgage-backed securities) into longer-dated government securities...   Download the Full Article Best regards, DailyFX Research Team research@dailyfx.com DailyFX Home | research@dailyfx.com | Contact US ©2009 DailyFX. All Rights Reserved. Forex Capital Markets, L.L.C.® assumes no responsibility for errors, inaccuracies or omissions in these materials. Forex Capital Markets, L.L.C.® does not warrant the accuracy or completeness of the information, text, graphics, links or other items contained within these materials. Forex Capital Markets, L.L.C.® shall not be liable for any special, indirect, incidental, or consequential damages, including without limitation losses, lost revenues, or lost profits that may result from these materials. Opinions and estimates constitute our judgment and are subject to change without notice. Past performance is not indicative of future results.

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