Thursday June 9, 2005 - 04:34:41 GMT
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Tricom Futures and Foreign Exchange -
Forex: All Hail, the Great Greenspan will speak tonight
The Asian session has been fairly uneventful thus far, ahead of Greenspan's testimony at 1400GMT. Aussie employment data came out stronger than expected (+14k, versus -5k expected).
The USD rallied broadly on Wednesday, reversing losses against the euro in choppy and technically-driven trade that spurred investors to make fresh bets on the U.S. currency. The euro dipped slightly to new session lows around $1.2207 shortly after the White House raised its forecast for inflation, saying it expected the consumer price index to increase 2.9 percent, fourth quarter over fourth quarter, versus its December outlook for 2 percent. It blamed the higher forecast on volatile energy prices. If rising inflation spurred the Federal Reserve to hike interest rates more steeply than previously expected, that could increase the attraction of dollar-denominated deposits to global investors. The White House also trimmed its U.S. 2005 real gross domestic product growth forecast to 3.4 percent from a previous 3.5 percent. But economic activity in the euro zone remains lacklustre by comparison.
U.S. Treasury debt prices eased on Wednesday as fears of a looming speech from Fed Chairman Alan Greenspan overshadowed solid results for a five-year note auction.
Bonds kicked off the session lower as investors second-guessed their excitement earlier this week after the Federal Reserve chief stopped short of ruling out a pause in interest rate hikes.
With another Greenspan appearance coming on Thursday, this one before the Joint Economic Committee of Congress, at 10 a.m. EDT (1400 GMT), traders were paring down their Treasury holdings just in case the chairman decided to burst their bubble.
U.S. stocks were little changed on Wednesday, as investors were reluctant to wade into the market ahead of remarks on the economy by Federal Reserve Chairman Alan Greenspan, while declines in Biogen Idec and Internet stocks like Yahoo Inc. hit Nasdaq.
Today’s Economic Releases:
· JPN: Current Account
· AUS: Employment
· UK: BOE meeting
· UK: Industrial Production
· US: Greenspan Testifies about the US economy
Today’s Top Trades
· USD/CHF: Buy on dips to 1.2470-80
. GBP/USD: Sell strength towards 1.8280-90
. EUR/USD: Sell strength towards 1.2280-1.2300
. GBP/JPY: Sell strength towards 195.90-00
. EUR/JPY: Sell strength towards 131.30-40
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