Traders awaited Federal Reserve Board Chairman Bernanke's speech yesterday in which he urged a sweeping overhaul of U.S. financial regulations in an effort to smooth out the boom-and-bust cycles in financial markets.
Bernanke recommended that lawmakers and supervisors rethink everything from the amounts firms set aside against potential trading losses and deposit-insurance fees to protections for money-market funds. His remarks reflected a judgment that the U.S., just like emerging-market nations in the past, failed to properly manage a flood of capital over the past decade and a half.
Optimism in global markets was fueled by a memo from Citigroup's Chief Executive which said the troubled banking giant was profitable in the first two months of 2009 and he is confident about its capital strength after tough internal stress tests. The investors took the comments as a sign of improvement for the overall economy.
US will announce Federal Budget Balance today and should also have an impact on the market because if it delivers unfavorable figures it will validate a problematic U.S. market, and the USD is likely to weaken as a result.
USDCHF is currently floating near the upper border of the Bollinger Bands on the hourly and 4-hour charts, signaling moderate downward pressure. But I am hesitating to short USDCHF as the overall trend is still up.
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