Tuesday February 14, 2006 - 07:14:42 GMT
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Tricom Futures and Foreign Exchange -
Forex: The market yawns in waiting for Bernanke.
The dollar eased on Tuesday ahead of testimony by Federal Reserve Chairman Ben Bernanke later in the week that could offer a clearer idea about how much higher U.S. interest rates will climb.
The dollar stayed in sight of a six-week high against the euro but slipped half a percent versus the yen in thin, technical trading as traders looked ahead to the new Fed chief's appearance before the U.S. Congress on Wednesday and Thursday.
The yen was stronger across the board, supported by a growing view that the Bank of Japan is close to ending its ultra-loose monetary policy and that overnight interest rates in Japan will eventually start to climb from virtually zero at present.
At the same time, expectations are fairly high that Bernanke may signal the Fed will keep raising rates to 5 percent by mid-year after lifting overnight rates by 25 basis points to 4.5 percent last month, the 14th straight rise since mid-2004.
Today brings two big data releases from Germany -- fourth quarter growth figures at 0700 GMT and the ZEW centre's indicator of economic sentiment for February, due at 1000 GMT.
In the United States, January retail sales data are due at 1330 GMT, and Dallas Fed President Richard Fisher will speak on globalisation and the U.S. economy at 1745 GMT.
Otherwise, the market will remain tightly bound ahead of Bernanke's testimony tomorrow. Keep an eye on Gold and silver as the correction continues. Another 20 cents lower in Silver (US$8.90), and another $15 lower in Gold (US$522), and we're in buy territory again.
Today's Economic Release:
EU: 4th Qtr GDP
US: Retail Sales
Today's Top Trades
- Sell EUR/JPY around 139.80, with stops above 140.30
For more ideas send me an email, [email protected]
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