The Event:
At 1:30PM on Wednesday, April 7th, Federal Reserve Chairman Ben Bernanke will be speaking to the Regional Chamber in Dallas, Texas. The title of the talk will be, “Economic Challenges Past, Present & Future”.
Description:
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.
Trader Take:
Talk about symbolic. Bernanke speaking in Texas, the largest state in the continental USA, while Bernanke himself yields the largest influence over the Greenback than any other single person. It is pretty much a given that U.S. 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 in Texas for hints on an 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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