User Name: Password:      Register - Lost password?

Forex News Blog
Back to The Headlines
Thursday June 8, 2006 - 10:46:23 GMT
Mellon Bank Foreign Exchange -

Share This Story:
| | Email

Forex: Mellon FX Daily - U.S. Edition

Key Points
• Market waits for ECB outcome.
• Close call between 50bp & 25bp – the data suggests 50bp, while current market volatility suggests 25bp. 50bp is certainly the cleaner option, but some may see this as too aggressive in current circumstances.
• At the press conference it will be difficult for Trichet to suppress current hawkish instincts.
• Global uncertainty will persist whatever the ECB does, suggesting an environment where direction for the majors will remain difficult.
• Fed’s Guynn implies that all options are open for June 29.

Market Outlook

EUR-USD is trading quietly ahead of today’s ECB outcome, although whatever happens at that meeting it is unlikely that current market uncertainties will be resolved. Comments yesterday by Atlanta Fed governor Guynn confirm that the Fed will not take any chances on inflation, implying that all options were on the table for June 29. He said “If we're on target with our present forecast for growth to moderate to a sustainable pace and for inflation to fall back within acceptable bounds, I would say that monetary policy is now close to where it should be.'' Yet, “we have to remain open to rethinking our policy setting as that outlook changes.''

For an in-depth discussion of the ECB meeting see the section below, but for the short-term market reaction there are three plausible options. 1) A 25bp move and a dovish statement, in which case EUR-USD would test and most likely fall through support at 1.2685-1.2725 as positions are liquidated. 2) 25bp and a hawkish statement, in which case there will be volatility but probably not much direction. 3) a 50bp hike, in which case upside will be tested (high 1.29s/possible 1.30 plus) but probably not sustained. The problem with 50bp is that it will spook global markets and this is likely to deter specs from pursuing EUR-USD upside. As stated yesterday, the current highly uncertain environment is not one that is conducive to big directional moves on the majors. Indeed, this in itself would suggest some overall corrective downside risk on EUR-USD.

News that al-Zarqawi had been killed in Iraq pushed EUR-CHF higher but initially this was not sustained. It was only later as news about Iran’s possible willingness to negotiate started to filter through that the CHF weakened a little further. The impression on al-Zarqawi is that while his removal is a positive step, the terrorist threat in Iraq, widespread as it is, is unlikely to suddenly disappear. It seems highly likely that Al-Qaeda and al- Zarqawi will have anticipated such an event and planned for it accordingly. More important in the short-term will be how the Iranian situation develops.

More strong data out of Australia, with employment (+56k) being supported by a 55.8k rise in the full-time component. The unemployment rate of 4.9% was the lowest recorded for thirty years. Such developments, in combination with recent strength in private sector credit and retail sales increase the prospect of the RBA raising rates as early as August, depending upon what the Q2 CPI report (released late July) reveals. Ultimately, this should be a promising environment for the AUD, although it is possibly too early to jump in given current uncertainties about global markets and commodities.

UK manufacturing output data was weaker than expected and runs counter to the more positive noises coming from PMI and CBI surveys where orders (especially export orders) have been improving impressively.

Day Ahead
Eurozone – the ECB meeting and press conference are the key events today and the outcome remains a very close one. It seems clear from the more aggressive rhetoric advanced by ECB officials in recent weeks that they would like to move more rapidly on policy tightening, given that rates are at levels considered to be well below neutrality. This is why we have been opting for a 50bp rate hike at today’s meeting, especially as the ECB has in the past not shied away from moving by larger less frequent amounts. (The ECB has changed rates seventeen times since its inception and of the nine hikes, two have been by 50bp. Of the eight cuts, five have been by 50bp – all other moves being by 25bp.) However, recent developments in equity markets, signs of growth moderation in the US and the strength of EUR-USD are all factors that could lead them into choosing the softer option of a 25bp move today. Indeed, there were suggestions on newswires yesterday (from sources cited by Market News) that a 25bp move was the most likely outcome, although even that report suggested that there would be differences of opinion on how to proceed.

The problem with just a 25bp move is that it will fail to satisfy the tightening instincts that many ECB officials now harbour given the strength in key pieces of data. This not only relates to the strength of key surveys of economic activity growth, but also to the sustained acceleration in private sector lending growth and the headline CPI, which is now at +2.5%. The sharp rise in (interest rate sensitive) lending growth is evidence enough that interest rates are way too low.

In other words, if they do go for the softer 25bp option, equally as interesting will be how Trichet plays this at the press conference. There is every chance of him providing some suggestion that a further rate hike will follow at one of the next few meetings, otherwise it would suggest a dovishness on policy that is inconsistent with the remarks, signals and data developments of the past month. Of course, this is where the 25bp option gets difficult, as we are now entering the summer period where rate moves become slightly more problematic. For example, the August 3 meeting does not have any scheduled press conference, so if the ECB is to increase the pace of tightening it will have to follow with a 25bp move in July. Even the ‘September’ meeting actually takes place on August 31, which many in Europe would still consider to be part of the holiday period. Overall, a 50bp move remains the cleaner option, but whether they take it remains to be seen.

US – jobless claims data will be watched to see whether last week’s rise in initial claims is sustained. If it is it will add to evidence of a softening in labour demand.

Data/event EDT Consensus*

GB MPC rate announcement 07.00 4.5%
EU ECB meeting outcome 07.45, press conf 08.30 2.75%
CA Housing starts (May) 08.15 222k
CA New house prices (Apr) m/m 08.30 +0.5%
CA Productivity (Q1) q/q 08.30 +0.4%
US Initial claims (w/e Jun 3) 08.30 330k
US Continuing claims (w/e May 27) 08.30 2433k last
ZA SARB rate announcement 09.00 7.0%
GB NIESR GDP (3mths to May) q/q 19.01 +0.6% last

Latest data Actual Consensus*
US Consumer credit (Apr) +$10.6bn +$3.5bn
NZ RBNZ rate announcement 7.25% 7.25%
JP M2 plus CDs (May) y/y +1.4% +1.8%
JP Bank lending (May) y/y +1.2% +1.3%
AU Employment (May) +56k +12.5k
AU Unemployment rate (May) 4.9% 5.1%
CH Unemployment rate (May, sa) 3.4% 3.4%
GB HBOS house prices (May) m/m +0.1% +2.0% last
NO Manu output (Apr) m/m -1.5% +0.5%
GB Ind prod (Apr) m/m -0.6% +0.3%
GB Manu output (Apr) m/m -0.2% +0.3%
* Consensus unless stated

2005, Mellon Financial Corporation Note: Although obtained from sources believed by us to be reliable, Mellon Financial Corporation and its affiliates cannot guarantee the accuracy or completeness of the information upon which this report is based. This report does not purport to disclose the risks or benefits of entering into particular transactions and should not be construed as advice in any specific instance. The views in this report constitute our judgement as of this date and are subject to change without notice.
Ian Gunner 44 20 7163 5996 06.40 EDT Monday May 31 2005


Forex Trading News

Forex Research

Daily Forex Market News
Forex news reports can be found on the forex research headlines page below. Here you will find real-time forex market news reports provided by respected contributors of currency trading information. Daily forex market news, weekly forex research and monthly forex news features can be found here.

Forex News
Real-time forex market news reports and features providing other currency trading information can be accessed by clicking on any of the headlines below. At the top of the forex blog page you will find the latest forex trading information. Scroll down the page if you are looking for less recent currency trading information. Scroll to the bottom of fx blog headlines and click on the link for past reports on forex. Currency world news reports from previous years can be found on the left sidebar under "FX Archives."

Actionable trading levels delivered to YOUR charts in real-time.

Register To Test Your Amazing Trader

GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium

Mon 10 Sep 2018
AA 08:30 GB- GDP, Trade, Output
Tue 11 Sep 2018
AA 08:30 GB- Employment Decision
A 09:00 DE- ZEW Survey
Wed 12 Sep 2018
A 12:30 US- PPI
A 14:30 US- EIA Crude
A 18:00 US- Beige Book
Thu 13 Sep 2018
A 1:30 AU- Employment
AA 11:00 GB- Bank of England Decision
AA 11:45 EZ- European Central Bank Decision
A 12:30 US- Weekly Jobless
AA 12:30 US- CPI
Fri 14 Sep 2018
A 08:30 GB- GDP
AA 12:30 US- Retail Sales
A 13:15 US- Industrial Production
AA 14:00 US- prelim University of Michigan

John M. Bland, MBA
co-founding Partner,

Global-View Affiliate Program

We are starting an affiliate program to market some of our products.

Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.

Put the word "affiliate" in the email subject line.

Contact us

Start trading with forex broker Markets Cube

Max McKegg's Daily Forex Trading Forecasts

Veteran FX Trader, Max McKegg, forecasts all the Major currencies and the Australasians; providing Daily and Medium Term Trading forecasts to subscribers, who include large Banks the world over, as well as individual traders in more than 30 different countries.

Request a TRIAL of Max's Forex Service.


Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map

Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Open Forum
Futures Forum
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Online Forex Trading
Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
Forex Products
GVI Forex
Free Trials
FX Bookstore
FX Jobs and Careers
Jobs USA
Jobs UK
Jobs Canada

Forex Forum

The Global-View Forex Forum is the hub for currency trading on the web. Founded in 1996, it was the original forex forum and is still the place where forex traders around the globe come 24/7 looking for currency trading ideas, breaking forex news, fx trading rumors, fx flows and more. This is where you can find a full suite of forex trading tools, including a complete fx database, forex chart points, live currency rates, and live fx charts. In addition, there is a forex brokers directory where you can compare forex brokers. There is also a forex brokers hotline where you can ask for help choosing a forex broker that meets your individual fx trading needs. Interact on the same venue to discuss forex trading.

Forex News

The forex forum is where traders come to discuss the forex market. It is one of the few places where forex traders of all levels of experience, from novice to professionals, interact on the same venue to discuss forex trading. There is also the GVI Forex, which is a private subscription service where professional and experienced currency traders meet in a private forex forum. it is like a virtual forex trading room. This is open to forex traders of all levels of experience to view but only experienced currency tradingprofessionals can post.

Currency Trading

Currency trading charts are updated daily using the forex trading ranges posted in the Global-View forex database. You will also find technical indicators on the fx trading charts, e.g. moving averages for currencies such as the EURUSD. This is another forex trading tool provided by

Forex Brokers

The forex database can be used to access high, low, close daily forex ranges for key currency pairs, such as the EURUSD, USDJPY, USDCHF, GBPUSD, USDCAD, AUD, NZD and major crosses, including EURJPY, EURGBP, EURCHF, GBPJPY, GBPCHF and CHFJPY. Data for these currency trading pairs dating back to January 1, 1999 can be downloaded to an Excel spreadsheet.

Forex Trading

Forex chart points are in a currency trading table that includes; latest fx tradinghigh-low-close range, Bollinger Bands, Fibonacci retracement levels, daily forex pivot points support and resistance levels, average daily forex range, MACD for the different currency trading pairs. You can look on the forex forum for updates when one of the fx trading tools is updated.

FX Trading

Global-View also offers a full fx trading chart gallery that includes fx pairs, such as the EURUSD, commodities, stocks and bonds. In a fx trading world where markets are integrated, the chart gallery is a valuable trading tool. Look for updates on the Forex Forum when the chart gallery is updated.

Forex Blog also offers a forex blog, where articles of interest for currency trading are posted throughout the day. The forex blog articles come from outside sources, including forex brokers research as well as from the professionals at This forex blog includes the Daily Forex View, Market Chatter and technical forex blog updates. In additional to its real time forex forum, there are also Member Forums available for more in depth forex trading discussions.



By using this website, you are agreeing to our Privacy Policy and Terms of Use, and Cookie Policy

Copyright ©1996-2014 Global-View. All Rights Reserved.
Hosting and Development by Blue 105