Thursday February 16, 2006 - 07:03:19 GMT
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Tricom Futures and Foreign Exchange -
Forex: Bernanke succeeds in Predictability
The dollar held near a six-week high against the euro on Thursday after Federal Reserve chief Ben Bernanke suggested the central bank would keep raising interest rates to combat inflation, bolstering the U.S. currency's rate advantage.
In his debut before Congress as Fed chairman, Bernanke said the U.S. economy was running near capacity but warned that it faced heightened inflation if there was not a proper monetary policy response.
As suggested throughout the week, Bernanke succeeded in predictability, and the market remains keen on the USD. Part-2 of his testimony will hold little further surprise, and will be a case of re-asserting last night's comments.
Watch tomorrow's Japanese growth data for signs of life, and a hint of when the BOJ may look to move away from its zero-interest rate policy.
The GBP rallied strongly overnight, on the back of a surprisingly upbeat BOE inflation report, but was unable to get above 1.7440 against the USD.
Today's Economic Release:
UK: Retail Sales
US: Housing Starts
US: Bernanke Testimony to Senate
Today's Top Trades
- Sell EUR/USD on a break under 1.1850, with a 40 pip stop
For more ideas send me an email, firstname.lastname@example.org
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