If the slate of economic events is overly better than expected, Forex traders will be expected to bid up the dollar, specifically against the Japanese Yen, as positive data will decrease chances of an imminent stimulus move from the FED.
Economic Professionals Against New QE
Over the weekend, Dow Jones Published a poll from the National Association for Business Economics that surveyed economists of whether the FED should apply another round of quantitative easing. The results showed an overwhelming majority being against a third round of QE in 2012.
The Federal Reserve shouldn't undertake a new round of bond buying this year, an overwhelming majority of a group polled by the National Association for Business Economics said in a survey released Monday.As such, Forex traders can expect pressure against the FED to continue to withhold additional stimulus to strengthen if this week’s US figures continue to reveal positive economic growth.
While the majority of the 259 economics professionals polled in the semi-annual survey thought the U.S. central bank's previous two rounds of asset purchases have been a success, 81% of the group said the Fed shouldn't launch a third such program this year.
Fed officials have suggested they could be open to a third round of bond buying if the economy begins to weaken, but a recent uptick in the labor market may make that less likely. The Fed has nearly tripled its portfolio of assets since the financial crisis as part of its efforts to keep interest rates low to spur spending and investment.
The economics professionals polled by NABE didn't seem to be overwhelmingly worried about the prospect of inflation: only 27% thought higher inflation is a bigger risk than deflation over the next three years and 44% believed neither inflation nor deflation is a risk over that time period.
The Washington professional association of business economists and others who use economics at work polled a panel of its members between Feb. 15 and March 6 for the survey. Read More