Tuesday October 26, 2004 - 15:58:33 GMT
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CMC - www.cmcforex.com
Forex: Dollar stages minor recovery as traders book profits.
Oct. 26th The dollar staged a minor recovery off the day’s earlier lows, although this seems to be more of a result of traders booking profits than any
fundamental shift in opinion. High oil prices are going to keep the US
economy under pressure in the coming weeks and although this afternoon’s
consumer confidence data will be awaited with interest, the market is
holding out little hope of an impressive number there. Signs that inflation
is continuing to creep higher in both Germany with yesterday’s CPI number
and France with today’s PPI report, are lending support to the fact that
the ECB will soon be tightening monetary policy, although unlike we saw in
February 2004, concerns over the strength of the common currency are being
mitigated by the fact that this keeps the price of dollar-denominated
imports such as oil down. The Euro is now holding close to the 1.28 level,
but another approach on the morning’s high of 1.2840 would be of little
surprise, with any move past this point likely to meet resistance around
the 1.2870 level. On the downside, look for support at 1.2770 and 1.2710.
Cable has also backed off yesterday’s highs, although with little economic
data around to underpin the Pound, it’s likely that we could see further
churn around the 1.8375 level, at least ahead of Thursday’s UK consumer
confidence statistics. Look for resistance on the topside at 1.84 then at
yesterday’s high of 1.8450, whilst on the downside expect to find support
close to yesterday’s low at 1.8320 then 1.8220.
Provided by CMC Group New York– Wayne Roworth, Senior FX Dealer and Enis Mehmet, Head of New York Office.
For up to the moment FX market commentary, a 24 hotline is in place on 866-531-2604.
About CMC Group
CMC Group transacts over $1billion per day across its range of real-time online Foreign Exchange. It is one of the world’s leading online Foreign Exchange, Index and Equity Derivatives providers. Founded in 1989, CMC Group has operations in London, New York and Sydney. It is authorized and regulated by the Financial Services Authority in the UK, and is a member of the US NFA and ASIC in Australia. For further details on CMC Group visit www.cmcgroupplc.com.
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