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This was definitely not a surprise but the markets appreciated the affirmation from the Fed which removes any potential near term surprises from the Fed. Equities picked up on the news but risk appetitie is far from returning. Europe came back to the fore and this morning the markets are in a tailspin of fear again as the threat of a sovereign downgrade looms over Greece. This opens up th epossibilty of Grrek bonds being illegible with the ECB, making it more difficult to borrow.

On top of this the war of words will not be helping the euro…hot topics have included the war and Italian book fixing- not good PR for the euro. The Yen is flying in the markets today and has pushed below 89.50 against the USD and pushed GBP down to 136.82 as we stand. The Yen is being favoured as a safe haven after recent strong economic data; the USD has also experienced gains again today with EUR/USD dropping as low as 1.3449 and GBP/USD to 1.5270 a new 9 month. Big day tomorrow for sterling in the revision of the Q4 2009 GDP- it is expected that it will be revised up to 0.2% from 0.1%- we need as expected or better to stave off further sterling selling.

Today’s important world event is Obama’s meeting with both Democrat and Republican law-makers in the US to try and find a way to move forward on the introduction of legislation of the US healthcare system - the most expensive by a long way, in terms of % of GDP, in the world. Very important that the US move forward on this project and politically vital for Obama.

Discuss on this on the Currency Exchange Forum