Wednesday December 7, 2005 - 08:43:14 GMT
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CMC Markets - www.cmcmarkets.com
Yen remains vulnerable despite upbeat economic data; Bank of England meets to discuss interest rates.
December 7th - The Yen continues to look vulnerable against the dollar and remains well beyond the key 120 level. Oil data due for release today may provide some direction as the fact crude is sitting around the $60 mark is doubtless hampering the country’s economic recovery, although data released overnight – Japan’s coincident index and leading economic index – were in line with expectations, showing solid signs of expansion over the next 6 months. Uncertainty over the impact of Yuan revaluation and the prospect of the ultra-lax stance over monetary policy being maintained by the BoJ may however prevent any significant move higher by the JPY in the near term. Elsewhere, there’s little on the economic calendar during the day although the Bank of England’s final Monetary Policy Committee meeting for 2005 gets underway. Expectations are that rates will be left on hold again – inflationary pressures are starting to build with retail sales picking up ahead of Christmas but with overall economic growth in the UK looking somewhat modest for 2005, industry would doubtless balk at any suggestion that rates return to the higher levels seen earlier in the year.
Paul Jackson and Enis Mehmet
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