Wednesday May 31, 2006 - 23:19:07 GMT
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Tricom Futures and Foreign Exchange -
Forex: Rangebound trading continues amid all the confusion
The dollar was higher late Wednesday in New York, advancing on solid data and the minutes from the Federal Reserve's May policy meeting.
The minutes of the Federal Open Market Committee initially befuddled markets as investors tried to decipher the content, but the dollar soon climbed to intraday peaks, adding to gains won earlier in the New York session. While some analysts said that the minutes exemplified the uncertainty surrounding the Fed's direction, they noted that July fed funds futures contracts are pricing in roughly a 64% chance of a rate hike in June. That helped the dollar lift to fresh highs for the day versus the euro, yen, Swiss franc, and U.K. pound. Also, the minutes from the Federal Reserve's latest policy meeting suggested that the central bank was still concerned about inflation. Although the minutes from the May 10 meeting showed that policy makers were not certain how much more monetary tightening, if any, was needed, a mention that inflationary pressures were rising helped reinforce expectations for more rate rises.
The USD has further upside to go, and in the wide, the market remains trapped in a 200 pip range. EUR/USD could easily get back down to 1.2710, while USD/CHF could trade back up towards 1.2250.
Today's Economic Release:
US: Weekly Jobless
Today's Top Trades
- Buy EUR/USD arund 1.2730, with stops under 1.2680
For more ideas send me an email, firstname.lastname@example.org
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