Monday February 6, 2006 - 06:37:14 GMT
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Tricom Futures and Foreign Exchange -
Forex: The US is working again, therefore the USD reigns supreme
The dollar rallied on Friday, bolstered by upwardly revised U.S. jobs numbers and a fall in the unemployment rate, which reinforced expectations for continued increases in U.S. interest rates.
Huge shifts in interest rate futures and bond markets after the data showed investors pricing in a much higher chance of the Federal Reserve pressing ahead with its campaign of raising interest rates through the middle of the year.
The U.S. Labor Department reported nonfarm payrolls rose 193,000 in January, below economists' forecasts for a rise of 240,000. But the government also revised up the numbers for the previous five months, while the jobless rate fell to 4.7 percent, a 4-1/2-year low.
Once again, it appears the only country likely be raising rates in the near-future is the US. As such, the only currency in demand is the USD. This is seen no clearer than in the case of the GBP, which got hit the hardest following Friday's US employment data. The market is starting to specualte that while EU data maybe soft, the UK data is showing an even softer picture, and as such the BOE maybe forced to cut rates again in coming months.
Today's Economic Release:
Today's Top Trades
- Sell EUR/USD around 1.2070-80, with a 50 pip stop
- Sell GBP/USD around 1.7680, with a 50 pip stop
For more ideas send me an email, [email protected]
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