Forex EUR/$

Forex GBP/$

Sterling EMAs guiding the pair higher in a relatively quiet London session. If the 1.9900 handle stays, it could continue to get paid.

Forex $/CHF

$/CHF getting offered here as it failed on its previously mentioned level (1.0935). $ has a generally weak tone to it this evening, though the moves have been proportionately small.

Indicative: 1.0896

FOREX NEWS AND COMMENTS: BOE APPOINTMENT, FORMER FED CHAIR GREENSPAN

Bank of England reappoints Mervyn King as Govenor, will serve another 5 year term

Former Fed Chairman Greenspan on wires, says:

-  at last 50 % chance of recession in US, 

- ’Few signs’ that we’re in a recession yet. says Policy makers probably can’t prevent downturn

-Demand ,not Fed policy , pushed up asset prices 

FOREX ECONOMIC DATA: UK MORTGAGE APPROVALS, CONSUMER CREDIT

Dec UK Mortgage approvals 73,000 vs expectations of 79,000 as previous was revised to 81,000 from 83,000

UK Consumer Credit slowed in Dec to GBP 0.557 bln  down from Nov GBP 1.221 bln – Well below expectations

GBPUSD dropped to 1.9885 from 1.9905 before the release

Forex Ranging Currencies

Not much is going on as most pairs look range bound.

FOREX AND THE FOMC DECISION

The Forex  markets are somewhat muted today, and will likely remain so ahead of this afternoon’s FOMC rate decision.

With dealers not wanting to establish new positions before the FED, expect ranges in the major currencies and crosses until the announcement.(more)

Most markets are expecting (or hoping) for a 50bps rate reduction.  The FX market will react in accordance with the reaction of the stock markets.  If Fed dissapoints (no rate change, or even a 25 bps) expect the stock market to plunge ,in turn the carry trades will be trashed, and EUR, USDJPY will also head lower.  If Fed eases by 50, the stock markets will probably initially rally, thus dragging the high yielders higher as well.  Watch for the reaction of the stocks in the minutes after the headline reaction , to gauge which way the Forex markets will head.  Either way, it will be an interesting afternoon in the US markets and into the Asian openinig tomorrow.

Forex $/CHF

$/CHF may catch a bid here as stochastics are looking healthy on an hourly. If it can get above present level ~1.0935, there is room to run. Next topside levels are 1.0960 and 1.0985.

Indicative: 1.0935