Tuesday November 1, 2005 - 06:19:58 GMT
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Tricom Futures and Foreign Exchange -
Forex: To be measured, or to not be. That is the question
The US dollar was rangebound against the yen, with active profit-taking capping the upside after the greenback hit its highest level in more than two years. Earlier in the day, the dollar rallied to 116.67 yen, its highest level since September 16, 2003, when the US unit stood at 117.43 yen, buoyed by a system glitch which paralysed trading on the Tokyo Stock Exchange throughout the morning.
But the dollar turned top-heavy, as short-term traders rushed to adjust their long dollar positions in the run-up to today's expected interest rate hike in the US by the Federal Open Market Committee (FOMC).
The USD surge continued overnight, as the markets resumed the recent ranges, with talk again starting about the Euro breaking under 1.1880. The USD/JPY continues to break strong resistance levels as traders look to play the yield card.
Most of today's action will occur post-FOMC, as the market looks for another 25bps hike, and pays close attention to the statement, and whether or not we see the phrase "measured" again. There is growing talk of "measured" being dropped from the statement, thereby giving rise to speculation that the Fed naybe looking to become more aggressive in its hikes, or maybe moving towards adopting a neutral stance.
Today’s Economic Releases:
Today's Top Trades
- Sell EUR/USD around 1.1980-90
- Sell GBP/USD around 1.7700-10
For more ideas send me an email, [email protected]
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