Forex online trading – Operation twist extended, markets disappointed

Forex online tradingForex online trading markets received the Federal Reserve`s extension of the so called “Operation Twist” program with a disappointing fall.
“Operation Twist”, under which the Fed swaps short-term bonds for longer-term ones in an effort to keep interest rates low and further stimulate the economy will be expanded through the end of the year, selling $267 billion of short-term debt securities to buy the same amount in longer-term debt .
But market analysts are not convinced the program`s continuation will provide the expected benefits. “Right now businesses and consumers are not borrowing money, and they won`t start to do so just because the interest rates dropped a little more”, said a forex online trading analyst.
“The Fed`s initiative will help some, but not much”, explains a Businessweek article. “Low mortgages rates (the 30-year fixed rate average is currently 3.71%) have already made houses the most affordable they have been in decades. The problem for many potential buyers is not the cost, but their inability to get a loan because of damaged credit. The Fed`s initiative won`t do much regarding that.
The Federal Reserve also opted not to implement further Quantitative Easing, which also yielded disappointment in forex online trading investors.
“Such bond purchases would lower rates even further” says Stan Shamu, of IG Markets in Melbourne. “Investors are clearly disappointed, a sentiment also dampened after the Fed cut estimates for economic growth on the back of a slowing jobs and tough credit markets”, added Shamu.
Indeed, “the Federal Reserve is now looking for 2012 economic growth of just 1.9 to 2.4 percent” says a forex online trading expert. “In April the range was of 2.4 to 2.9, and the new unemployment prediction is for a fourth quarter 2012 average of 8 to 8.2 percent, up from 7.8 to 8 percent.”
Regarding the forex online trading market, the U.S dollar is maintaining its gains, as economic news reduces risk appetite. This is opposed to the very obvious concerns about the Eurozone, where the Spanish ongoing crisis and the three-year-low PMI figures are fueling recession fears, even though a coalition government in Greece has been established.
Additionally, worries about the Chinese economy are rising as the latest monthly HSBC manufacturing survey data coming out from the biggest emerging market in the world is disappointing, showing signs of contraction.
They acted despite worries inside and outside the Fed that the central bank already has done all it can do to invigorate the disappointing economic recovery.