Thursday September 7, 2006 - 10:45:11 GMT
Share This Story
INVESTICA Ltd - www.investica.co.uk
Inflation fears underpin dollar
The Euro was unable to strengthen back above the 1.2835 level in Europe during Wednesday and retreated to lows around 1.2770 in New York before recovering to 1.2805 after the Fed Beige Book. The Euro was again unable to push above 1.2830 in early Europe on Thursday and retreated to 1.28.
The US unit labour costs data was stronger than expected for the second quarter with a revised 4.9% annual increase compared with the previous estimate of 4.1% and the annual increase rose to 5.0%. Earlier data was distorted by big revisions and changes in the definitions of compensation with a 9.0% annual increase for the first quarter and there is the risk that labour cost increases are being overstated.
Fed Governor Lacker stated on Wednesday that the Federal Reserve must maintain credibility on inflation and the markets will have to consider the possibility that interest rates will need to increase again. The net evidence continues to suggest that the Fed should be comfortable with leaving rates on hold in the short term which will limit the scope for dollar buying, but there will be greater caution over dollar selling.
Forex Trading News
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
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."