Thursday March 16, 2006 - 07:03:05 GMT
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Tricom Futures and Foreign Exchange -
Forex: The tooing and frowing continues, but I favour the downside for the USD today
The stronger than expected New York Fed Empire Manufacturing Survey reported at 31.2 from an expected 18.9 gave the USD a bost initially however this was shortlived
As the January TIC data showed an inflow of USD 66 bio falling short of the latest Trade Balance Deficit of 68.5 bio. Whilst the data showed an increase of flows form Oil producing nations and non Japanese Asian countries the shortfall raised questions about the US economy s structural problems re, record twin deficits and concerns that demand for US assests may be waning.
The Jpy also received a boost on talk that 2 US senators are about to visit China in an effort to increase pressure for China to revalue it Yuan.
Market looks a little trapped right here. EUR/USD was unable to get close to 1.2100 overnight, but found keen buyers whenever it edged towards 1.2010. Similarly, USD/CHF was unable to get back above 1.3040, but was able to avoid a major slide by holding ground around 1.2950.
The market will be looking towards tonight's US CPI data for the next clue as to the Fed's next move. If it's anything like last night's data, sentiment will remain mixed.
Today's Economic Release:
UK: Retail Sales
US: Housing Starts
US: Philly Fed
Today's Top Trades
- Buy EUR/JPY around 141.50, with stops under 141.00
- Buy EUR/USD on a break above 1.2080
For more ideas send me an email, [email protected]
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