Wednesday March 1, 2006 - 08:22:31 GMT
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CMC Markets - www.cmcmarkets.com
Dollar under pressure amidst mixed economic data; oil inventories eyed.
March 1st - Yesterdayâ€™s broadly mixed economic data from the US has injected a degree of doubt into currency markets as to whether the Fed will now be in a position to add another 25 basis points to interest rates at their next meeting later in the month. This has been reflected through the Asian session with the dollar losing ground against the major currencies and the impact has likely been exaggerated by traders booking end of month profits. There is however another raft of economic data scheduled to come out of the U.S. today so expect this to be under close scrutiny as the market looks for any further indication as to where rates will go next. Oil inventory data is also due for release later in the session â€“ the fact weâ€™ve spent the last three weeks with US Light crude trading under the $65/barrel mark should in the longer term provide some support for the February trade balance (due in early April) and in turn the dollar too, but ahead of this any suggestion that supplies are under pressure stands to push prices higher once again. Geopolitical tensions continue in both Iran and Nigeria and although winter should soon be drawing to a close, another cold snap could easily leave heating oil reserves under pressure too.
Tim Wilbraham and Enis Mehmet
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