Tuesday March 14, 2006 - 08:30:04 GMT
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Tricom Futures and Foreign Exchange -
Forex: It must be time for the Euro to firm up again today
The dollar drifted lower on Monday and traded within tight ranges as investors, hesitant to add new positions ahead of a heavy batch of economic data this week, took some profits after last week's gains.
Analysts say U.S. economic reports this week could have an impact on the U.S. interest rate outlook, starting with fourth-quarter current account data and February retail sales, due on Tuesday morning. January capital flows data come on Wednesday, followed by February consumer prices on Thursday.
San Francisco Federal Reserve Bank President Janet Yellen sounded a bit dovish on Monday, saying the Fed has moved interest rates into a range it had to be sensitive to the possibility of raising rates too far. The euro trended slightly higher against the dollar on Yellen's remarks.
The euro also drew some support from news that the United Arab Emirates' central bank is considering putting more of its reserves into euros, analysts said. On Sunday, the UAE central bank said it was looking to convert up to 10 percent of its foreign exchange reserves from dollars into euros -- double the target it had previously set. The reserves are estimated at $23 billion in December and are held almost entirely in dollars.
US Retail Sales and Current Account take centre stage today. Ahead of their release, the market will stick to a tight range as traders remain hesitant to place bets ahead of these and other numbers later in the week.
USD/CAD is showing signs of a pullback, which may prove to be a leading indicator for the USD in the whole. USD/CHF will remain range bound in the wide: 1.3070-1.3160, a break of either level will set the trend for the rest of the week. Meanwhile, the EUR/USD's range is 1.1910-1.2010 in the wide.
Today's Economic Release:
US: Current Account
US: Retail Sales
US: Business Inventories
Today's Top Trades
- Sell USD/JPY around 118.70, with stops above 119.20
- Sell USD/CHF around 1.3110, with stops above 1.3160
For more ideas send me an email, [email protected]
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