Wednesday February 6, 2008 - 11:04:17 GMT
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FX Blog: Market Snapshot Europe Mid-Session
GVI Market Snapshot-- Europe Mid-Session
- Despite the devastatingly weak U.S. economomic data over the past several sessions, the USD has continued to advance against the EUR and GBP. The carry trade funding currencies (JPY and CHF) are roughly steady to better from late in NYC.
- The market seems to have already priced in the worst for the U.S. and for now is ignoring its significant negative carry vs. the EUR because many fear the ECB is in the process of repeating the recent policy errors of the Fed.
- Most are expecting a -25 bp (to 5.25%) rate cut from the BOE on Thursday. Such a move would be seen as positive for that economy. The ECB is seen likely to keep policy on hold. The tenor of the comments by ECB President Trichet will be closely scrutinized. Many feel that Trichet is out of touch with the current global economic environment.
- The commodity currencies (AUD, CAD and NZD) are trading mixed. Gold and oil are mixed as well.
- Several Far East equity markets closed down sharply today. Some had half-day sessions ahead of the lunar new year observances starting tomorrow. The Shanghai exchange has been closed all week. European bourses are weaker as well. The early call for the U.S. is for a rebound following Tuesday's sell-off. Bond prices are mixed.
- The economic calendar from the U.S. this week remains light.
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