Currency comment 3/13

Another very dull trading session in currencies on Monday.  Many traders are squaring positions ahead of the Feb announcement on short term interest rates on Wednesday.

As was seen on Friday when the employment report was released with higher than expected growth in jobs it was the market reaction rather than the news that was the news.  It may be the same reaction when the Fed, as expected, raises the short term interest rates on Wednesday.

Fundamentally, rising interest rates in the U.S. will encourage dollar buying.  However, there is a lag effect in the fundamentals of the market and the actual buying. Stay tuned.