Will Fed Strike Positive Tone on Jobs?

Cautious optimism appears to be the trend for today, as forex traders and other investors consider the possibilities for tomorrow's Fed policy statement. The FOMC began its two day meeting today, and speculation is that a more positive tone could be coming.

This comes as the U.S. stock market moves slightly higher, and as the sterling and the euro gain in forex trading against the U.S. dollar. However, movements are mostly small as investors tread water, waiting for tomorrow.

GFT's Kathy Lien believes there is a good chance that the Fed will express some optimism about the economy. She makes her case in FX360:

The primary reason why we believe that the Fed could grow more optimistic is the prospect of strong job growth in March. Non-farm payrolls fell much less than the market had anticipated in February and with jobs affected by the snowstorms set to be added back this month, there is a strong possibility of positive job growth in March. The improvement in the labor market should also encourage consumer demand, particularly given the rise in retail sales for everything except for autos. There have been many areas of improvement since the January monetary policy meeting and if the Fed doesn’t want to fall behind the curve, they could choose to acknowledge the improvements tomorrow.