Wednesday, January 18, 2006


Market 'Comes To Terms' With Dollar Sell-Off

Forex News has the latest on the US dollar. "The dollar came off earlier highs as investors braced for a raft of US data this week and as a degree of caution prevailed, keeping the currency from breaking new ground. The big picture continues to suggest the market is gradually coming to terms with the idea that early 2006 dollar selling on the premise the Fed will essentially be done with rate hikes on 31."

"'January, may not be right,' said Gavin Friend at Commerzbank Corporates and Markets."

"The dollar was buoyed through most of 2005, following a three-year downturn, by a growing focus on interest rate developments around the world, and finished the year nearly 15 pct up against its chief rivals, the euro and the yen. However, the growing market view that the US rate hiking cycle is nearing its end weighed on the dollar at the start of 2006."

"Still, market perceptions rely heavily on economic data and any sign of a pick up in the numbers will re-ignite rate hike expectations and in turn help the dollar move higher. Today, the focus will be on US inflation figures for December due out at 1.30 pm GMT, data on portfolio flows into the US in November at 2.00 pm GMT and the Fed's assessment of the economy after market close at 7.00 pm GMT."

"Friend at Commerzbank Corporates and Markets said the portfolio flows data my pose a risk for the dollar."

Check out the yield curve. The dollar is selling off this AM. Gold is off almost $7.
Post a Comment

<< Home

This page is powered by Blogger. Isn't yours?