At 8:30 PM on Thursday, April 8th, Federal Reserve Chairman Ben Bernanke will be granting a rare evening speech at the 43rd annual Alexander Hamilton Awards Dinner in Washington DC.
The Federal Reserve Chief plays a leading role in the control of the nation’s currency. These talks are often generic offering very little in terms of new information directly. However, clues are often dropped by the speaker providing savvy Forex traders hints as to future sentiment and monetary direction.
In addition, questions from the audience are unscripted and Bernanke’s reaction can provide insight into his true motivations and feelings. In other words, traders need to be able to read between the lines carefully to capture a glimpse into potential coming change.
A fairly free form question and answer session will follow this speech. This is when the real news can leak out. It is pretty much a given that US interest rates will be creeping higher soon. It is just a matter of when exactly. The USD has regained control and is pushing the EUR/USD lower approaching a test of the lows.
The Euro surge was short lived with the higher rate picture and improving domestic economy lifting the Greenback once again. Traders need to listen very carefully to Bernanke during this evening talk for hints on the interest rate increase schedule. I am expecting any changes to be orderly and planned but as in all things finance, one needs to be ready for anything
David Goodboy is Vice President of Business Development for a New York City based multi-strategy fund.
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