Will Big Ben Lift The Dollar?
On Wednesday, Ben Bernanke will preside over the Federal Reserve's first press conference ever, which will give him the perfect opportunity to quell any potential market volatility arising from the monetary policy statement that is to be released that morning. Some analysts feel that that timing is not coincidental, that Fed Chairman Bernanke believes that he can direct or redirect market sentiment to where he wants it to go.
Some analysts believe that the Fed's press conference, similar in scope to those held by Jean-Claude Trichet following the European Central Bank's monetary policy releases, will provide markets with more clarity and focus on the Fed's actual thinking.
The main focus is the Federal Reserve's controversial quantitative easing scheme is scheduled to conclude in June, and most analysts are in agreement that the Fed is unlikely to renew it. What will be more acceptable to markets, say some analysts, is the Fed chief's explanation as to why it is no longer perceived as necessary. While there are some concerns that the Fed Chief could be rattled by rapid fire questioning, potentially contradicting policy, most analysts agree that Chairman Bernanke will conduct the press conference with his typical cool reserve.
FX traders and Gold investors are eager to hear whether Ben Bernanke or as market participates like to call him Big Ben will become more hawkish then before on inflation and hint on folding QE , why?
Because this will mean US monetary policy is closing the gap between the US and the rest of the world and could lead to a Dollar gain and significant profit taking on Gold and Silver.However if Big Ben will reiterate the necessity for QE and low rates in the future then Dollar bears will continue to clamp down on the Green's back while Gold bulls will continue to charge forward.