Last updated: Friday, February 19, 2010
On Thursday, the United States Federal Reserve Board announced that “in light of continued improvement in financial market conditions it had unanimously approved several modifications to the terms of its discount window lending programs”. Among some interesting measures, the Fed increased the discount rate from 1/2 percent to 3/4 percent and raised the minimum bid rate for the Term Auction Facility (TAF) by 1/4 percentage point to 1/2 percent. Indeed, the resumption of economic growth in the United States is likely to trigger a change in expectations for inflation and possibly influence the Federal Reserve monetary policy. Eventually, a widening of the interest rate differential between the United States and Japan will help the US dollar, in particular against lower yielding currencies like the yen and Swiss franc. I bought USDJPY at 86 and I plan to hold the position open for quite some time. Please make an intelligent use of leverage and always use stop-loss orders to protect your capital.
