Today’s forex market action was event filled with major news coming out of Switzerland, Australia and the United States. First up, Australia’s unemployment rate increased more than expected in February at 5.2 percent versus the expectation of 5.0 percent according to a report by the Australian Bureau of Statistics. Despite the bump up in rate, Australian employment increased by 1,800 jobs in February and surpassed market forecasts that were expecting jobs would fall by 20,000 workers.
Swiss cut interest rate, makes currency intervention in forex market.
Switzerland today decided to reduce its interest rate by 25 basis points as expected to bring the rate down from 0.50 percent to 0.25 percent. The rate cut sets a new all-time low for the Swiss National Bank interest rate level. The SNB also announced that it would intervene in the forex market to keep the Swiss franc from appreciating to help prevent the effects of deflation. The SNB statement explained that the bank will be “acting to prevent any further appreciation of the Swiss franc against the euro. To 
this end, it will increase liquidity substantially by engaging in additional repo operations, buying Swiss franc bonds issued by private sector borrowers and purchasing foreign currency on the foreign exchange markets.”
The Swiss franc fell sharply following the bank announcement and trading substantially lower all day versus the major currencies.
US News – Stocks rise, Retail Sales fall, Bernie Madoff pleads guilty.
Out of the United States today, the Dow Jones Industrial Average gained for the third consecutive day with an increase of 239 points(+3.46%) to creep back over the 7,000 barrier. The Nasdaq increased by 54 points(+3.97%) while the S&P500 gained almost 30 points(+4.07%).
US retail sales fell less than expected in February with a decline of 0.1 percent for the month compared to an expected 0.5 percent fall according to a report by the US Commerce Department. January’s retail sales were revised upwards from a 1.0 percent rise to a 1.8 percent increase. Core sales or retail sales minus automobiles registered an increase of 0.6 percent in February following January’s revised 1.6 percent core sales. Forecasts expected core retail sales to decline by 0.1 percent.
The US dollar has fallen in forex trading today versus the other major currencies with the exceptions of the Japanese yen and Swiss franc. The euro gained versus the dollar to reach a high today a 1.2945 dollars per euro in US afternoon trading while the British pound today reached a high of 1.3984 before giving back some of its gains. The Australian, New Zealand and Canadian dollars also made considerable gains versus the American currency.
Also of note, Bernie Madoff pleaded guilty today to 11 criminal counts of defrauding investors in the largest Ponzi scam in history. Madoff had his bail revoked and now is jailed as the judge now deemed him a flight risk.
