As seen on chart above,the GBP/JPY have a highest spike of 219.15 and lowest spike on 204.72 and that is 443 pips in one single day!
On CNN news Dow Jones as well as many stock market (japan and India)has plunged to lowest level,it said the lowest level as the level of stock market after 911 tragedy.
Is it the 'panic' session of traders of the US reccesion that would come true?
From forexstreet news:
WASHINGTON (Thomson Financial) - The Federal Reserve cut its target Fed funds rate by 0.75 pct to 3.50 pct, "in view of a weakening of the economic outlook and increasing downside risks to growth."
The Fed also cut its discount rate for direct loans to banks by 0.75 pct to 4.00 pct.
Even with these rate cuts, the Fed statement said, "appreciable downside risks to growth remain", and it will "act in a timely manner as needed to address those risks."
Nomura Securities economist David Resler said he was "surprised that they didn't wait to see what the US market was going to do" although he had already "come to the belief that they had to do more than 0.50 pct."
In its statement, the Fed said that "while strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households."
The Federal Open Market Committee also said it saw a "deepening of the housing contraction as well as some softening in labor markets."
St. Louis Federal Reserve Bank President William Poole dissented from the inter-meeting rate cut, because he "did not believe that current conditions justified policy action before the regularly scheduled meeting next week."
Resler said he might have voted with Poole as "it does look a bit like panicking."
The Fed's monetary policy has now gotten ahead of fiscal policy in the sense of moving before the passage of any economic stimulus package.
President George W. Bush and Congressional leaders are scheduled to discuss the package later today.
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