Tuesday April 19, 2005 - 07:32:00 GMT
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CMC Markets - www.cmcmarkets.com
Corporate woes weigh on dollar as traders await PPI data.
April 19th - Disappointing earnings news amongst US corporates and a depressed stock market have combined to weigh on the dollar in recent trade. Concern that PPI data may fall short of expectations is also dragging on the greenback as any undershoot here would once again add pressure on the FOMC not to hike interest rates too aggressively in the coming months. As a result of this, the greenback has now passed through some key levels and finished last night’s session against the Yen below the 20 day moving average for the first time in around four weeks. This is despite news that the Japanese leading indicator data released overnight has been revised downward, underlining the fact that the country’s economy remains firmly in a state of contraction and also the release of a survey showing a further – albeit gradual - decline in confidence amongst small businesses in Japan. Obviously today’s US PPI number – and the CPI data due for release tomorrow – will both be closely watched as any upturn here could result in another wave of dollar appreciation, but in the short term further exposure on the downside would seem to present few surprises.
Paul Jackson and Enis Mehmet
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