Friday February 18, 2005 - 10:51:19 GMT
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FOREX: US OPEN MARKET POINTS 02-18-05
Euro- Dollar Stalled in Ranges
A lackluster economic calendar, an upcoming bank holiday on Monday in US and series of large option expirations at the New York cut (15:00GMT 10 AM EST) have all conspired to keep the EUR/USD within a 30 pip range throughout the European session tonight. According to Action Economics, about an $1 Billion worth of options at the 1.3000 strike and several hundred million more at the 1.3090 barrier are due to expire today which will most likely keep trading muted for the rest of the session. Furthermore, the EZ Industrial Production report missed slightly to the downside (0.5% vs. 0.6% expected) as a decline in Capital Spending curbed growth in December. The weaker numbers pressured the euro as the European trading approached midday.
In UK, the news was brighter as the Public Sector Net Borrowing registered a larger than expected surplus (₤6.6 Billion vs. consensus of ₤4.6 Billion) buoyed by stronger tax receipts from corporations. Tonight’s data along with Wednesday’s strong employment results indicates that UK economy is back to firing on all cylinders as opposed to its much larger neighbor next door which remains quagmired. The end result is that EUR/GBP weakens falling through the .6900 figure.
Unless either US PPI or University of Michigan consumer confidence report produce large surprises, trading should continue to be slow as dealers square up ahead of President’s Day in US on Monday. Although the euro is up materially against the dollar for the week, we continue to believe that most of the gains are behind it for the time being. Mr. Greenspan’s reaffirmed commitment to raising short term rates along with relatively positive TICS report which showed no drastic decline in foreign capital inflows should serve as strong support for the dollar in the upcoming week.
FX Spot Overnight
- EUR trades down to 3050 as IP slightly weaker
- JPY hangs at 105.20 as dealers square up for the week-end
- GBP hits a weekly high as government funding shows a bigger than expected surplus
- CHF rallies to 1850 as greenback firms
13:30GMT – (08:30 AM EST) CAD Wholesale Sales m/m (DEC) Expected 0.3% Previous 0.5%
- 13:30GMT – (08:30 AM EST) CAD Wholesale Inventories m/m (DEC) Expected -- Previous 0.9%
- 13:30GMT – (08:30 AM EST) USD Producer Price Index m/m (JAN) Expected 0.3% Previous -0.7%
- 13:30GMT – (08:30 AM EST) USD PPI Ex Food & Energy m/m (JAN) Expected 0.2% Previous 0.1%
- 14:15GMT – (09:15 AM EST) USD Producer Price Index y/y (JAN) Expected 3.9% Previous 4.1%
- 14:15GMT – (09:15 AM EST) USD PPI Ex Food & Energy y/y (JAN) Expected 2.1% Previous 2.2%
- 15:00GMT – (10:00 AM EST) USD U. of Michigan Confidence (FEB P) Expected 95.5 Previous 95.5
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