Wednesday January 4, 2006 - 06:04:57 GMT
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Tricom Futures and Foreign Exchange -
Forex: Lookout, the USD tide is turning
The dollar eased back against other major currencies as minutes from the last US FOMC meeting in December suggested that it was close to ending the cycle of rate hikes that have largely driven the greenback's resurgence over the past year.
A weak US ISM manufacturing report for December also weighed on the US unit. The ISM index fell to 54.2 points from 58.1 in November, well below market expectations.
The minutes from the Fed meeting on Dec 13 noted that "the number of additional (monetary policy) firming steps required probably would not be large." Those comments reinforced talk that an expected rate hike at the Fed's January policy meeting may be the last for awhile.
The euro gained as the market expects it to benefit from likely hikes in the European Central Bank's key rate at the same time as the Fed moves to end its own long cycle of increases.
The USD has continued to lose ground during the Asian session today, and going into the European session, the same market sentiment should remain as we approach 1.2090 in the EUR/USD and 1.2830 in USD/CHF.
Today's Economic Release:
Today's Top Trades
- Buy EUR/USD 1.2020, with stops under 1.1970
- Sell USD/CHF around 1.2910, with stops above 1.2950
For more ideas send me an email, [email protected]
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