A rather choppy overnight session has now led to a standstill as traders in all markets, including the FX world, carefully await a decision from the US Senate. Following the defeat of the TARP (aptly noted as Troubled Asset Relief Program) on Monday, senators will reconvene in order to vote on a reconstructed bill that will feature a bump up in insurance by the FDIC. With a current insured amount of $100,000, the FDIC will now back accounts with as much as $250,000. Although newsworthy, a likely victory for the plan will hardly provide any real support for a directional move in the market as all eyes are now turning to the US Employment report. Current expectations are for a decline of 100,000 in the month. This would more than be viewed as pessimistic with the world’s largest economy set to sport a ninth consecutive month of payroll declines.

On a technical note, the Euro bounced back from an intraday low of 1.3975, breaking though interim resistance at the 1.4000 figure in the New York morning. The single currency, however, looks to stall just below the 1.4100 handle without any further catalyst as we head into lunch time. A similar situation hovers over the pound sterling. Although rocking back from the 1.7632 low of the session, the GBP is encountering impressive resistance under the 1.7800 handle with eyes set for a short move to 1.7850 on a break.

Tags: FX Trading, Senate Vote, US Dollar

This entry was posted on Wednesday, October 1st, 2008 at 3:26 pm and is filed under Currency Trading. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.