"The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions, including low rates of resource utilization, subdued inflation trends, and stable inflation expectations, are likely to warrant exceptionally low levels for the federal funds rate for an extended period."
Couple this with the rhetoric coming out of the European Union and the mid-term relationship between the Greenback and the Euro shines though. As far as investors are concerned, the Euro is the winner in terms of the real utility it offers not only in yield, but in it's safe haven status.
Curiously, the last month of unrest in the Middle East has produced a surprising lack of risk averse money flows into the dollar. At this point in time, the Dollar is a bad bet. Until the economic recovery in the US crystallizes into real confidence inspiring measurable progress, the Dollar will remain stagnant and see continued declines.
If the European Union does follow through and raise interest rates next month, and the US maintains it's low rates "for an extended period," the Euro will only continue it's appreciation against the Dollar until the relationship between the two currencies changes. At a conservative speed of the uptrend in the Euro, 1.5 by years end, and 1.60 plus within two years is quite possible.
As of the last three trading days, the market is confidently trading above the 1.40 mark, after an extended period of resistance at this level. I believe now that the market has broken the 1.40 mark, 1.40 will take the role of strong support, although it will almost certainly be tested.
My focus this week will be to increase my holding in the Euro down to the 1.40 mark as I have a comfortable cushion of floating profits from 1.35. Even if the EU fails to raise rates next month, the Euro will still be a better choice over the dollar, but the trend will obviously slow down to a degree, but remain intact.
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