Tuesday January 4, 2005 - 11:21:15 GMT
Share This Story
INVESTICA Ltd - www.investica.co.uk
Euro buying on dips
The increase in long Euro positions will make it more difficult for the Euro to revive gains and there will be caution ahead of the Friday US employment figures. Underlying dollar sentiment is likely to remain weak due to current account concerns, but there will be 2-way interest on dollar losses beyond 1.35. There is likely to be strong Euro buying interest on more substantial dips to below 1.33.
The dollar maintained a generally firmer tone during Monday and the US currency remained stronger than 1.35 in New York. The US currency also edged slightly stronger to 1.3450 in early Europe on Tuesday before strengthening further to 1.3360.
The headline US ISM index was close to expectations with a reading of 58.6 in December from 57.6 in November. The employment component, however, was weaker than expected with a decline to a 14-month low of 52.7 from 57.5. Following the weak Chicago employment report last week, there will be concerns that the December payroll report on Friday will be weaker than expected.
There is likely to be a further increase in Euro reserves during 2005 following an increase in Euro weightings in 2004 to around 20% of reserves. The rate of Euro buying will, however, probably be lower than last year. This may reduce the risk of sharp dollar losses, but the underlying buying will still make it difficult for the dollar to secure a significant rally as gains will be met with underlying dollar selling pressure.
Forex Trading News
Daily Forex Market News
Forex news reports can be found on the forex research
headlines page below. Here you will find real-time forex market news reports
provided by respected contributors of currency trading information. Daily forex
market news, weekly forex research and monthly forex news features can be found
Real-time forex market news reports and features providing
other currency trading information can be accessed by clicking on any of the
headlines below. At the top of the forex blog page you will find the latest
forex trading information. Scroll down the page if you are looking for less
recent currency trading information. Scroll to the bottom of fx blog headlines
and click on the link for past reports on forex. Currency world news reports
from previous years can be found on the left sidebar under "FX Archives."