Going on the assumption readers are still in the learning stage whether beginner or intermediate, forex training below is about the Fed stimulus talks. In March 2013 Bernanke started talking about how the year should progress with little hints towards stimulus cutbacks. In May he took a bigger stand stating that there would be cutbacks. Just on the eve of these cutbacks Syrian trouble spurs concern and a possible military air strike. USA concerns turn away from stimulus changes required to focus mostly on whether an air strike should happen to stop issues in Syria. After waiting over half a month for talks to resume, tapering talks have occurred and the latest move is announced.
Forex Training for the Previous Months
Due to USA reports, Syrian issues, and tapering talks the USA has hit its lowest point in seven months. It had started to gain a little in August on better July data only to lose it and more due to August issues. The Euro, Yen, Swiss Franc, and New Zealand Dollar all hit new highs on the release of Fed information for their most recent meeting. For forex training it is important to understand how the first nine months of the year have affected the market.
On talks that bond buying would be cut back the USD started to gain a little back. Better numbers in labour and growth also helped the dollar gain some of what it lost in previous years. Sadly, Syria and talks of an air strike created a big issue to the point that investors took their forex training seriously and ran quickly into safe havens like the Yen and Swiss Franc. Commodities like gold and crude oil also saw increases as the dollar was forsaken.
Expectation was still high from many experts that by the time September talks rolled around for monetary policy and the taper, the Fed would be hawkish. Yet the beginning of the week for the talks was met with high amounts of concern. Lawrence Summers, the favourite for the new Fed chair position, bowed out leaving the dovish Janet Yellen in play. Speculation turned from high expectations of stimulus cuts to worry it would not happen for yet another month.
Forex Training Lesson on Tapering
There is much to learn from forex training on this important fundamental period. One is that the taper was decided against, but that did not affect all markets as one would believe. The stock market actually gained. The USD went low for a bit, but then it bounced back due to better risk appetite. The Fed was dovish in their move by not committing to any tapering for the rest of 2013 or early 2014. The determining factor was worldwide growth reports. These reports showed that the global economy was not going to gain in growth as experts hoped. With slowed growth cutbacks would be foolish and more damaging. For those in forex training if you read the report on global economic growth you would have picked up on the results of the tapering being a no go and able to comfortably get out of the yen for USD and other major currency gains, despite the initial USD low.
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