Monday November 21, 2005 - 06:04:43 GMT
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Tricom Futures and Foreign Exchange -
Forex: Trichet gives the EUR reason to rally
The US dollar was trading weaker early today against the euro and yen, while the currency is likely to drift even lower after hawkish comments from ECB officials on Friday and little fresh data this week.
The euro rallied to 1.1789 usd from 1.1664 in overnight trading on Friday, following comments from European Central Bank president Jean-Claude Trichet signalling that the central bank will raise rates on Dec 1.
Trichet said the ECB is ready "to moderately augment the present level of interest rates in order to take into account the level of risks to price stability". He added the ECB will "withdraw some of the accommodation which is in the present monetary policy stance," leading traders to price in a 25 percentage basis points in December.
The highlight for the week will be tomorrow's Fed minutes, followed by various Fed speakers throughout the week. It appears the comments by Trichet will offer some support to the EUR/USD for today atleast, which inturn will pull the GBP higher.
With Thanksgiving on Thursday, we can expect a shortened week in terms of action and volume. Maybe the time when we get a dead-cat bounce in the EUR.
Today's Economic Release:
US: leading Indicators
Today's Top Trades
- Buy EUR/USD around 1.1765, or on a break above 1.1810
- Sell USD/CHF on a break under 1.3130
For more ideas send me an email, [email protected]
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