Federal Reserve Chair nominee Janet Yellen was confirmed yesterday 6 December 2014 to take over the post from Ben S. Bernake. It has been noted that Yellen passed the vote by a count of 56-26, which has been cited as the lowest number in history.
Analysts assess that this shocking development of only 56 votes for her confirmation highlights the polarization that appears to be gripping the Congress`s relationship with the Federal Reserve. While analysts cite the fact that the Senate has blocked many of President Barack Obama`s nominees for various government positions, traditionally the role of Fed Chairman has been above the party politics. However due to the recent decision by the Democrats to not allow for filibusters in an effort to keep the Republicans from halting the confirmation process, some additional pushback can be expected. Additionally, it should be noted that the Republicans have been exceptionally obstanent in their pursuit of opposing the president`s policies.
That said, there is additional attention paid to the Federal Reserve due to its massive stimulus package that now stands at $75 billion after recent cuts of $10 billion that were decided in December 2013. Analysts believe that the exceptionally low support for Yellen may stem from both a lack of confidence by the Republicans in the direction that she may take the Fed in, as well as their general approval of the policy that has been in effect over the past few years.
Traders are advised to watch for fluctuations on the USD in the coming days as the markets react to both the positive fact that the confirmation has passed, along with the negative that Yellen is coming into the job with such a low margin.
Pound Rises on Strengthened Economy
It was reported on 7 January 2014 that the British pound is trading against the US dollar at the highest rate in over two years. Many experts have pointed to the improvement in the manufacturing and service sectors as being significant factors behind the positive outlook.
Analysts note that there have been a string of positive reports concerning the pound in recent months, with rising housing prices and employment figures. Moreover, analysts cite the fact that the pound is excelling against the dollar while the American currency has also been on the rise makes this achievement all the more impressive.
Traders are advised to watch for additional rises in the coming days against both the dollar as well as the neighboring euro.
Aussie Takes a Fall on Bearish Bets
The Australian currency appears to have taken a significant beating according to reports from 7 January 2014 as traders turned on it. Losses were reported against all of its rival currencies in the 16 member group.
Analysts note that the Aussie has been a favorite of traders looking to short sell it against its rivals. While some recent gains have been noted, it is still appear to be fairly weakened. Analysts point to the fact that the Australian government has been making efforts in recent months to spur growth, for which a lower exchange rate is advantageous.since it can sell its exports at a lower and more attractive price to foreign buyers.
Traders are advised to watch for further drops in the value of the Aussie in the coming days as the direction does not appear to be likely to shift at this time.