FED will Cut Rates?? | Forex Factory

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FED will Cut Rates??

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  • Tell me what you think about FED Cut Rates
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  • #1
  • First Post: Dec 10, 2007 1:04pm Dec 10, 2007 1:04pm
What do you think about what the FED is going to do tomorrow?
  • #2
  • Dec 10, 2007 1:17pm Dec 10, 2007 1:17pm
"Fed rate decision will take the center stage this week. Markets are pricing in a 100% chance of a rate cut this time. However, expectation for a 50bps was scaled back after NFP on Friday. Hence a 25bps cut to bring the federal funds rate down from 4.50% to 4.25% is the most likely scenario. While recent re-emergence of inflation risks will be mentioned in the accompany statement, it's believed the downside risks to growth will remain the major focus. Other major focuses from US include Oct trade balance, Nov import price index, CPI, PPI and retail sales."
  • #3
  • Dec 10, 2007 6:38pm Dec 10, 2007 6:38pm
If the FED does cut rates as expected, what do you think the market will do?
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  • #4
  • Dec 10, 2007 6:41pm Dec 10, 2007 6:41pm
?
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  • #5
  • Dec 10, 2007 7:04pm Dec 10, 2007 7:04pm
Quoting Michtrader
If the FED does cut rates as expected, what do you think the market will do?
I think this:

If dont cut: Downhill for the majors...

If cut 25bps the dollar goes down a little to gain strength then to rise.. New lows for the majors..

If cut 50bps, new highs for some majors, like EurUsd to 1.5000..

It is suitable not to forget that the last indicators of the USA are encouraging. Already some spirit is noticed in the American economy.

At the same time that is affecting the USA also it begins to affect Europe and the UK..
  • #6
  • Dec 11, 2007 12:10am Dec 11, 2007 12:10am
I think it's very likely that they could cut 50 bps. If they feel there is a threat of recession acting quickly would be imperative. Cutting 50, seen as too much by some, would be less serious than not cutting enough in a recessionary situation. In my opinion this is a more appealing option than cutting 25 now and then having to cut 25 more in the near future.
  • #7
  • Dec 11, 2007 1:16am Dec 11, 2007 1:16am
i think we will see a 25bp rate cut
Twitter: @forexpokerpro
  • #8
  • Dec 11, 2007 10:26am Dec 11, 2007 10:26am
see gbpusd is dropping while we have fomc that suppose to cut the rate and it is indicating that gbpusd should go up and price in the cut, but it is going down?!! what is this meaning ? if they actually do not cut the rate we still can see big drop on majors like gbpusd? or maybe some traders going to make no rate also price in ? i am confused here with gbpusd action.
  • #9
  • Dec 11, 2007 10:31am Dec 11, 2007 10:31am
I hope the fed wont cut the rates. That is Good for the dollar (trust) and good for the inflation.

It is not the end of the world if the stock market gonna crash from this!
Trainee at UBS Investment Banking
  • #10
  • Dec 11, 2007 10:34am Dec 11, 2007 10:34am
Quoting mohsen57
see gbpusd is dropping while we have fomc that suppose to cut the rate and it is indicating that gbpusd should go up and price in the cut, but it is going down?!! what is this meaning ? if they actually do not cut the rate we still can see big drop on majors like gbpusd? or maybe some traders going to make no rate also price in ? i am confused here with gbpusd action.
Better price . I've seen this happen in the past. Right before a news announcement, the pair will drop to create a better price for buyers. I could be wrong on that theory however. Has anyone else ever noticed this?
I dream, therefore I become.
  • #11
  • Dec 11, 2007 10:48am Dec 11, 2007 10:48am
Quoting mike w
Better price . I've seen this happen in the past. Right before a news announcement, the pair will drop to create a better price for buyers. I could be wrong on that theory however. Has anyone else ever noticed this?
the question is if the dont cut the rate what will happen ?? will GU drop big time in min? or it cant while this drop today may priced in that ?
  • #12
  • Dec 11, 2007 12:06pm Dec 11, 2007 12:06pm
.....big drop of GBP/USD this morning suggesting big guys knows whats goin to happen.......forget about .50 & short the cable!
  • #13
  • Dec 11, 2007 1:06pm Dec 11, 2007 1:06pm
Quoting mike w
Better price . I've seen this happen in the past. Right before a news announcement, the pair will drop to create a better price for buyers. I could be wrong on that theory however. Has anyone else ever noticed this?

I think most of trader begin to take profit since last friday bull trades to play safe..
and they will wait untill rate announcement to re-enter the market..
what best for us?I suppose we just have to wait till release to see what happen next..

hellkkas's reply might be best to apply for our preparation on possible next trades..
  • #14
  • Dec 11, 2007 1:21pm Dec 11, 2007 1:21pm
I just wanted to share what I saw right after the rate cut. All major pairs went down except USDCHF. Even EURJPY went down - probably the largest move which I thought was strange. It will be interesting to see whare it's all at tonight.
  • #15
  • Dec 11, 2007 1:23pm Dec 11, 2007 1:23pm
Thanks all. That's me wiped out. Have nice lives. Back to the cubicle where I belong.
  • #16
  • Dec 11, 2007 1:34pm Dec 11, 2007 1:34pm
Cable hardly moved, but GBPJPY moved down a few hundred

I accidentally caught 40 of the EURJPY, which fell about 150 and had a spread of 30 on my MT4 when I noticed it.
  • #17
  • Dec 11, 2007 1:57pm Dec 11, 2007 1:57pm
It Will Go Back Up By The End Of The Year. Christmas Attack Will Come. Not To Worry. Have A Nice Live
  • #18
  • Last Post: Dec 11, 2007 2:11pm Dec 11, 2007 2:11pm
too late coming for me. But I'm my own fool. I made my own downfall.
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