Friday December 16, 2005 - 09:03:41 GMT
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CMC Markets - www.cmcmarkets.com
Yen extends gains over dollar, other majors largely unchanged.
December 16th - The Yen has continued to march higher against the dollar after the Bank of Japan left its economic assessment unchanged for another month. The message is that the country’s economy continues to recover and this combined with expectations that US interest rate growth will soon slow and a general year-end unwinding of the JPY sell off that has been central to the market for the last 12 months is continuing to buoy the Yen. A temporary move by USD JPY to below 116 proved to be unsustainable towards the end of the Asian session but the overall mood has certainly changed from the attempt on 121.50 that we saw at the start of last week. Other major currencies also appear to be holding onto the majority of recent gains against the greenback, although both the Euro and Pound have lost a little ground from the week’s earlier highs. German IFO and eurozone inflation may well provide further direction for the common currency in the short term, but with little data now due from London over the next week – notable exceptions being the MPC meeting minutes and GDP data - further meaningful momentum for Sterling may prove difficult to find ahead of the Christmas break.
Tim Wilbraham and Enis Mehmet
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