Wednesday February 15, 2006 - 08:00:47 GMT
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Tricom Futures and Foreign Exchange -
Forex: Regardless of Bernanke's comments, the USD remains in favour
The dollar inched up against the yen on Wednesday in quiet trading dominated by investor caution before Federal Reserve Chairman Ben Bernanke's much-anticipated testimony on the U.S. economy.
Bernanke is expected to offer a solid assessment of the economy when he appears before the House Financial Services Committee later in the day, followed by testimony at the Senate Banking Committee on Thursday.
Such an assessment would bode well for the dollar's interest rate advantage to keep widening against the yen and the euro
Recent comments from Fed officials and solid economic data have reinforced a market view that the new central bank chief will take up the baton of his predecessor, Alan Greenspan, and keep fighting inflation
Steady as she goes today, ahead of Bernanke's testimony. USD/CHF range to be 1.3065-95, and EUR/USD range: 1.1930-1.1900.
The only thing to watch ahead of NY is the BOE Inflation report at 10.30GMT. After yesterday's soft CPI, we may see the BOE downgrade its inflation expectations, and as such signal no rate hike in the near-term, and maybe even a cut in rates, but i doubt it. Overall, the GBP will remain under pressure, as long as we maintain trade under 1.7375.
Today's Economic Release:
UK: BOE inflation report
US: Empire State Index
US: Industrial Prodn
US: Bernanke Testimony
Today's Top Trades
- Sell GBP/USd around 1.7360, with a stop above 1.7410
- Buy USD/CHF around 1.3060, with a stop under 1.3020
For more ideas send me an email, [email protected]
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