With its announcement this week that it will keep interest rates near zero until at least late 2014, the Federal Reserve has put another large crack into the foundations underlying the US dollar. In a misguided attempt to provide clarity and transparency, Ben Bernanke has instead laid out a simple road map for economists and investors to follow.

The Fed has indicated that quantitative easing part three has commenced. As a part of the Fed's own version of glasnost, Bernanke has sought to lift the veil on the sausage making behind the decisions reached by the FOMC. To that end, our central bank has disclosed they now have an inflation goal of at least two percent.

This helps explain the weaker than expected 2.0% rise in personal consumption expenditure (PCE), following 1.7% and 0.7% in Q3 and Q2 respectively. The PCE chart (red graph) shows a potential dead-cat bounce, which may fail to regain the 3.6% high attained in Q4 2010. Finding the growth will be challenging, especially as stalled US budget negotiations risk forcing $1.

v US Q4 '11 GDP misses forecasts, registering +2.8% versus+ 3.0% expected; v EUR higher as Greek debt talks progress; Portuguese debt comes into question with yields spiking to a fresh all-time high; v JPY bounces back from losses earlier this week, nearing an all-time high against the GBP as foreign purchases of short-term Japanese assets surpassed Japanese investor outflows.

The Thompson Reuters/University of Michigan gauge of consumer confidence climbed to 75.0 in January, the highest levels since February 2011, from 74.0 registered earlier this month and 69.9 at the end of December. Economists suggest the gauge will stay at 74.0 in January.The Michigan's survey's inde.

Fitch Ratings said Friday that it has downgraded the long-term Issuer Default Ratings of Spain, Italy, Belgium, Cyprus and Slovenia, and affirmed the long-term Issuer Default Ratings of Ireland.

Fitch downgraded Spain's long-term Issuer Default Rating to 'A' from 'AA-', Italy's to 'A-' from 'A+', Belgium's to 'AA' from 'AA+', Cyprus' to 'BBB-' from 'BBB' and Slovenia's to 'A' from 'AA-'.

The rating agency affirmed Ireland' long-term Issuer Default Rating at 'BBB+'.

All the ratings have been removed from Rating Watch Negative, with the Negative Outlook on all six countries indicating a slightly greater than 50% chance of a downgrade over a two-year time horizon, Fitch said.

"Overall, today's rating actions balance the marked deterioration in the economic outlook with both the substantive policy initiatives at the national level to address macro-financial and fiscal imbalances, and the initial success of the ECB's three-year Long-Term Refinancing Operation in easing near-term sovereign and bank funding pressures," Fitch said in a statement.

"Nonetheless, the intensification of the eurozone crisis in the latter half of last year undermined the effectiveness of ECB monetary policy and highlighted the financing risks faced by eurozone sovereign governments in the absence of a credible financial firewall against contagion and self-fulfilling liquidity crises," the rating agency added.

Fitch had placed the sovereign ratings of the six Euro Area Member States on Rating Watch Negative on December 16. The rating agency had also lowered the outlook on France's AAA rating at the same time, though the company said in January that France's rating probably would not be cut this year.

The material has been provided by Instaforex Company - instaforex.com

The European common currency edged up further against its US and British counterparts in New York afternoon deals on Friday. The euro is presently trading near a 6-week high of 1.3221 against the greenback and a 4-week high of 0.8406 versus the sterling, compared to Thursday's closing values of 1.3109 and 0.8357, respectively.

The material has been provided by Instaforex Company - instaforex.com

FITCH : ITALY'S NEGATIVE OUTLOOK REFLECTS RISK EURO ZONE CRISIS INTENSIFIES, SLIPPAGE IN REALISATION OF 2013 BALANCED BUDGET TARGET The material has been provided by Instaforex Company - instaforex.com

FITCH : ONE NOTCH OF DOWNGRADE DUE TO ITALY'S PUBLIC DEBT DYNAMICS; OTHER DUE TO SYSTEMIC WEAKNESS IN WIDER EURO ZONE The material has been provided by Instaforex Company - instaforex.com

The Swiss franc advanced further against major rivals during New York afternoon deals on Friday. As of now, the franc is worth 1.4356 against the British pound and 0.9126 versus the US dollar, highest values since December 2, 2011 from yesterday's close of 1.4447 and 0.9207, respectively;.

Against its Japanese counterpart, the franc showed strength in today's afternoon deals and currently trading at 84.11 from previous session's 3-day low of 83.41.

The Swiss currency also traded higher versus the euro during New York afternoon trading and hit high of 1.2061 as of 1:35 pm ET.

The material has been provided by Instaforex Company - instaforex.com