Wednesday August 10, 2005 - 04:58:55 GMT
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Tricom Futures and Foreign Exchange -
Forex: With the FOMC out of the way, lets push this USD lower
The US dollar was mixed against the major currency pairs but expected to face more downside.
The US dollar was slightly weaker overnight after the Federal Open Market Committee (FOMC) raised official cash rates by 25 basis points to 3.50 pct. Dealers said the expected 10th consecutive interest rate rise by the Federal Reserve supported the euro in a range of 1.2329-1.2389.
As most of us expected, the Fed announced a 25bps hike in rates, and stuck with its measured statement. The market's reaction to the announcement suggests a great deal of negativity towards buying the Dollar. The market will now look to Friday's Trade data, with the view of selling the USD on sort of strength.
I continue to favour buying the EUR/USD on dips to 1.2345, followed by 1.2315, and 1.2285. I think the support at 1.2260-50 will hold any negative sentiment. In the USD/CHF, I like selling around 1.2610, followed by 1.2640, and the 1.2680-1.2700 region should cap any USD advance. In the USD/JPY, i'd be selling around 111.70-80, and in EUR/JPY around 138.40-50.
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Today’s Economic Releases:
US: Monthly Budget Statement
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