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11:12 2006/08/22
Euro Technicals still pointing higher
By Marc Spaelti - ACM Senior Trader |
Yesterdays News and Events:
After a strong start on Monday morning, the Euro spiked to a new August high of 1.2940, just a little short of the 1.2980 high seen in May. The move was helped by the surprise Euroland Trade Surplus of ?‚¬2Bln, more help came in form of EURJPY buying, as the cross continues to make fresh 7-year highs, the psychological 150 EURJPY level is just a wink away. While the Swiss Franc also managed to push the Dollar to a new August low of 1.2185, Cable faltered at the 1.90 resistance and ended the day underneath of key resistance 1.8960. The German Bundesbank in its monthly report supported the ECB??™s recent rate hikes as a measure to contain inflation, adding that monetary policy remained expansionary. With the EU economy currently growing at its fastest pace in six years, it can absorb up to another two rate hikes from the present 3% interest in view of many analysts. The ECB is to meet again on 31 August, but we doubt the next move would be scheduled this early. In comparison, forecasts for US interest rates have now peaked. A majority of analysts do not expect the FED to increase interest rates again this year and early forecasts indicate a rate cut in late 2007.
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Todays Key Issues:
German IFO Economic Conditions Survey for August is due at 9amGMT. Last months large fall to 15.1 stands in contrast with good data we have had in Euroland recently. No forecast is available, but a strong bounce would surely benefit the Euro. Swiss July Trade Balance is due at 12.15GMT, no forecast available, in June a surplus of CHF 935mio was achieved. At 2pmGMT the Richmond FED Manufacturing Survey for August will be released, it stood at 12 in July.
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