Wednesday May 25, 2005 - 22:33:33 GMT
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Tricom Futures and Foreign Exchange -
Is it only me, or does this week feel like Groundhog Day in the FX market
The USD continues to trade in what seems like a holding pattern - unable to move higher, but also not giving back all its gains of the previous couple of weeks.
The USD softened slightly further overnight, allowing Gold and Silver to regain further lost ground. Tonight’s US GDP second revision should make for interesting viewing as traders look for any evidence, or lack there of, of the suspected “soft patch” in the US economy. The Yen weakened across the board overnight in response to comments by a Chinese official saying: “the time has not come to appreciate the value of the Chinese currency”. But then again, what else do we expect them to say. A revaluation would allow most Asian currencies to rise.
U.S. Treasury debt prices turned lower on Wednesday after a three-week rally failed to push benchmark yields below the 4 percent technical barrier, flipping the market's momentum.
Solid demand for a $22 billion auction of two-year notes proved largely unable to stem the selling, as the many traders who had long expected bond prices to fall seized the opportunity to shed their bond holdings.
Comments from a top central bank official offered little help to Treasuries. Atlanta Federal Reserve President Jack Guynn said policy-makers were not yet done raising interest rates, adding that inflation had a distinct upward tilt.
U.S. stock indexes were off in late Wednesday afternoon trading with oil prices topping $50 a barrel and tech stocks cooling as the Nasdaq's eight-day rally appears headed for an end.
Today’s Economic Releases:
· US: GDP Revision
· US: Weekly Jobless Claims
Today’s Top Trades
· Buy EUR/GBP around .6875, with stop and reverse at .6855
· Buy AUD/NZD on dips to 1.0665-55
For more ideas send me an email, Abdul.Khan@tricom.com.au
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