What is Qauntitative Easing

After its last monetary policy meeting the US federal reserve started talking about a possibility of quantitative easing driving the market high to heaven. Now let us explain what quantitative easing is and find out whether it is good or bad for the US economy and currency market. Quantitative easing is not a complex transaction. The FED exchanges overnight deposits for treasury bonds extending liquidity by pushing private sector savings to the financial markets, i.e. quantitative easing is not just printing money or throwing from a helicopter, it is just an asset exchange transaction, just a swap. It means that when implementing quantitative easing policy, the Federal Reserve pumps money into economy (increasing supply of money) in order to prevent from inflation. Risks include the policy being more effective than expected. That is it, so there is no panic for the market.

August NFP Dropped by 54,000

According to the US Labor Department, nonfarm payrolls dropped by 54,000 in August, however, analysts anticipated sharper decline. The US jobless rate remains steady at 9.6%. The US dollar sharply dropped shortly after Bureau of Labor Statistics released a report. Employment in private-sector payroll surged by 67,000, - official figures show. For instance, in July 2010 overall payrolls declined by 131,000 and payrolls in private sector rose 71,000.

Average earnings per hour rose by 0.2% or 3 cents to $19.08 while experts had expected 0.1% surge. The average workweek remained unchanged at 34.2 hours.

Yesterday the market moved up as ECB raised economic forecast in Euro-zone for 2010 and 2011. However, the European refinancing rate remained unchanged at a record low of 1%.

Euro-zone GDP up 1% in Q2

The euro-zone GDP rose 1 per cent in the second quarter, at a pace exceeding the pace of US economic recovery। This pace is the fastest in last four years। On the annual basis euro-zone`s GDP rose 1,7%। Besides GDP of Germany, Europe`s first economy, rose 2,2% - the fastest pace in last 20 years. On the currency market the Euro halted its drop versus the Dollar. The EUR/USD currency pair is now traded at 1,28.

Germany in 'record' 2.2% growth

Germany in 'record' 2,2% growth: Germany's economy grew at its fastest rate for more than 20 years from April to June, outpacing eurozone neighbours and the UK.

DuPont boosts 2010 forecast

DuPont boosts 2010 forecast: "NEW YORK (Reuters) - DuPont forecast 2010 earnings well above expectations on Tuesday, sending its shares up 4.1 percent, as the rebounding global economy continued to fuel the company's recovery.

Profits rise 98% at British Gas

Profits rise 98% at British Gas: "British Gas profits almost double as the company, which supplies half of households' energy, benefits from the cold weather"

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BP shares rise on asset sale talk

BP shares rise on asset sale talk: BP shares rise 6.9% on speculation it may have buyers for asset sales needed to fund the Gulf of Mexico clean-up