Friday July 15, 2005 - 04:34:46 GMT
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Tricom Futures and Foreign Exchange -
Forex: Today could be choppier than a Wood-Choppers competition!!
The dollar drifted mostly higher on Thursday after a strong U.S. retail sales report suggested the U.S. economy remains on a solid footing and cemented the view that interest rates will continue to rise.
A surprisingly strong 1.7 percent surge in retail sales last month points to an economy supported by strong consumer spending and suggests the Federal Reserve will stick to its policy of steady rate increases. The June reading of consumer price inflation, however, was a bit below economists' forecasts, which dealers might have thought would ease pressure on the Fed to accelerate its campaign of interest rate rises. After a period of choppy trading, it was the strong cyclical U.S. growth story that won out and helped bid up the greenback.
U.S. stocks rose on Thursday, as better-than-expected earnings from companies such as Apple Computer Inc. and tame inflation data lifted the S&P 500 to close at a 4-year high.
Both the Nasdaq and the Standard & Poor's 500 rallied for the sixth day in a row.
The market remains rangebound heading into the weekend. Today, we have another bag of economic data in the US: PPI, Industrial Production, Michigan Consumer Sentiment, and Empire State Manufacturing Index. I think there is enough here to suggest it would be advisable to stand aside for today. Additionally, it's Friday, and we all know what can happen on Fridays.
Looking ahead, and the European summer break may see the EUR/USD trade a range of 1.2320-1.1820 in coming months. Similarly, the USD/CHF could be looking at a range of 1.3050-1.2550. Based on these ranges, you can see that the current market levels are roughly in the middle, offering little in the way of opportunity.
So far today, we've seen the EUR firm up slightly, testing the 1.2110-20 area, while the USD/CHF has again slipped under 1.2900. The newswires reported an article in today's UK Financial Times suggesting the Bush administration has been told that China will revalue the Yuan in August. However, the market's reaction was muted, as i think we've seen these stories before, and in any case, the revaluation has been priced in.
Today’s Economic Releases:
US: Michigan Consumer Sentiment
Today’s Top Trades
· Buy AUD/NZD around 1.1100-10
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