The foreign exchange (forex) market spends a considerable amount of time deciphering Group of 10 central banks’ thoughts. It tries to anticipate policymakers’ next moves so individuals can adjust their portfolios accordingly. It's like a game of chess, and this week is not an exception. Central bankers took time out to give a rundown of their respective economies and answer public questions about their policies. It’s usually "meat and potatoes" for the forex market, however the new forex norm seems to be contained price ranges until there is a break in the interest rate cycle. Janet Yellen, the new Federal Reserve chair, sat through her first testimony before the House Financial Services Committee on Tuesday (today's meet is canceled due to poor weather). The market was looking for anything that might suggest trouble in the handover from Yellen’s predecessor, Ben Bernanke. But the new Fed chief handled herself exceptionally well before Congress, deftly answering a barrage of questions while making no verbal gaffes that might unsettle the market. In short, the U.S. economy will remain faithful to the Bernanke way – for the time being at least.
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