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Thu, Sep. 9 - 5:32:56 GMT
  DAILY FOREX ANALYSIS BY CMC MARKETS

*Last Updated August 9, 2006, 2:54 am
Daily report by CMC Markets

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 FOREX ANALYSIS


Consensus lacking as to where next for the Fed.

August 9th - Last night’s FOMC rate verdict did little for the market with the no-change decision having already been largely factored into prices. However, the lack of any consensus as to where the Fed will take interest rates next does seem to have injected a degree of volatility into the dollar and with the message coming through that future movements will be data dependent, a little greenback support has been seen as a result. This may yet prove to be short lived though, as attention shifts to the next items on the economic calendar – oil inventory data will be closely watched as any notable draw down here could pump prices, in turn reigniting inflationary concerns whilst the Bank of England’s inflation report will also be eyed to see if there’s any call to take cable higher in the short term. The Pound did test the area below 1.90 last night but this proved to be rather short lived whilst across the Pacific, the Yen is failing to find much support as investors remain unenthusiastic about the Bank of Japan’s very gradual approach to tightening monetary policy. There’s still plenty of data to come before the weekend break including US trade data on Thursday and retail sales figures on Friday so further direction is to be expected but precisely which way markets will move remains to be seen…

Tim Wilbraham and Enis Mehmet



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Disclaimer: Although obtained from sources believed by us to be reliable, CMC Markets and its affiliates cannot guarantee the accuracy or completeness of the information upon which this commentary is based. This commentary does not purport to disclose the risks or benefits or entering into particular transactions and should not be construed as advice in any specific instance. The views in this report constitute our judgement as of this date and are subject to change without notice.



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