The USDX has broken below 80 and set a 4 month low today. Look for massive volatility in forex as well as the metals as the German Constitutional Court is set to rule on the legality of the ESM in a few hours, followed by Thursday’s FOMC statement.
Gold and silver are up during Wednesday Asian trading as the algos remain in place prior to the German announcement.
(AP:NEW YORK) The euro rose to four-month high against the dollar Tuesday as traders wait to see if the Federal Reserve will announce additional steps to help the U.S. economy later this week.
Optimism that a top German court will rule favorably on Europe’s bailout fund also helped pushed the euro higher.
Fed Chairman Ben Bernanke said in a speech last month that the bank can do more to help the U.S. economy rebound. It has already launched two rounds of bond purchases, most recently in August 2010. The Fed ends a two-day meeting Thursday.
On Wednesday, Germany’s highest court will decided whether it will decide whether or not it will allow Germany to join the European Stability Mechanism. The ESM is a new $639 billion bailout fund for the 17 countries that use the euro currency.
The euro rose to $1.2860 in late trading Tuesday from $1.2769 late Monday. The euro rose as high as $1.2870 Tuesday, its highest point against the dollar since May 14.