Monday November 15, 2004 - 13:27:18 GMT
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CMC - www.cmcforex.com
Forex: Structural worries continue to beset Dollar.
The Dollar attempted to rally Friday after another set of Dollar friendly
economic numbers were posted. Retail sales excluding autos rose by a
stronger than expected 0.9%m/m and the November University of Michigan
consumer sentiment survey rose to 95.5 from 91.7 as consumers reacted
favourably to lower oil prices. However, rally attempts quickly evaporated
and the Dollar slid back to the range lows against many currencies.
Structural worries continue to beset the Dollar with a benign approach to a
sliding currency by US policy makers only reinforcing downward pressure. US
Treasury secretary Snow reaffirmed the strong dollar policy Monday, which
the markets dismiss as just a political statement. He went on to say that
currency rates are best set by the market with fundamentals determining
currency values. Today sees the release of the Empire State Manufacturing
for November with the market expecting a rebound to 20.6 from 17.4.
Overshadowing forex trading Monday with be the Euro Finance Ministers
meeting which is expected to throw up the usual protestations over the
1.2900/30 currently acts as support and shields the key swing low of 1.2845
/50. Resistance is located at 1.3000/10 with stop loss buyers cited above.
Sterling suffered again last week on the crosses although technicals are
overstretched against a range of currencies. With much of the negative news
factored into the market, the currency should at least stabilise this week.
Key events for the pound will be CPI/RPI due on the 16th with average
earnings and the claiment count unemployment on the 17th. Resistance lies
at 1.8615/20 with stop buyers above. Support lies at 1.8500/20 ahead of
Dollar Yen remains under pressure due to the structural weak Dollar story,
weight of exporter interest and Asian revalue pressures. The rally in the
Nikkei has only added to downside pressure. Talk of repratriation of large
coupon receipts is also weighing. On the flip side, as we approach 105.00
zone the Ministry of Finance are likely to be increasingly concerned over
further Yen strength, especially as recent economic data is very soft.
104.90/107.30 is seen as the current range.
Provided by CMC Group New York– Steve Hatton, Senior FX Dealer and Enis Mehmet, Head of Operations New York. 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 a member of the US NFA and ASIC in Australia. For further details on CMC Group visit www.cmcgroupplc.com.
DISCLAIMER: This forum and the information is provided as opinion and may prove to be inaccurate. CMC will not be responsible for any losses incurred on investments made by readers and clients as a result of any information contained herein. CMC Group do not provide investment, legal, accounting, tax, or other professional advice. If investment, legal, tax, or other expert assistance is required, the services of a professional advisor is recommended.
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