http://www.ac-markets.com/Foreign Exchange Market (FOREX) daily information and analyst comment(c) 2005, Advanced Currency Markets SA. All rights reserved.5The Euro rebounded on Thursday from a two-month low against the Dollar after European Central Bank President Jean-Claude Trichet said inflation remains his top concern, signaling the bank won't cut interest rates anytime soon. After the ECB left the benchmark refinancing rate at 4% on Thursday, Trichet told reporters that high energy and food costs mean the euro-zone still faces "a protracted period" of high inflation. The ECB's continued focus on inflation at a time when global growth appears to be slowing prompted investors to reduce exposure to risk, and that boosted the low-yielding Yen that's typically used to finance risky trades. The Bank of England left interest rates on hold at 5%. Economic data in Britain has reflected a weakening economy, with house prices sliding rapidly, and analysts said they expected the BoE to cut rates when it meets again in June. http://www.ac-markets.com/forex-news/forex-2008-5-9.aspxFri, 09 May 2008 00:00:00 GMTrss@ac-markets.comThe Dollar rose on Wednesday as a surprise advance in US productivity added to gains booked after a Federal Reserve official said the central bank must stand ready to raise interest rates to combat inflation. The Dollar also got a boost from data showing higher-than-expected productivity gains in the first quarter and a lower-than-expected rise in unit labor costs, which reassured investors that inflation, while rising, is not yet spiraling out of control. Economists expect the Bank of England to hold interest rates steady at 5% when it meets on Thursday. Inflation has been a top concern in the 15-country euro zone, and markets widely expect the ECB to keep rates at 4% when it meets on Thursday.http://www.ac-markets.com/forex-news/forex-2008-5-8.aspxThu, 08 May 2008 00:00:00 GMTrss@ac-markets.comThe Dollar edged lower against Euro and Yen on Tuesday, its second straight daily decline, after a bigger-than-expected quarterly loss at Fannie Mae suggested more financial market turmoil ahead. Analysts said that was worrisome for the Dollar because it suggested problems in the troubled US housing sector have yet to work their way through the economy. Record high oil prices were seen reinforcing the European Central Bank's focus on inflation, which bank President Jean-Claude Trichet on Monday termed a "significant" risk. This underlined expectations that the ECB would keep rates at 4% when it meets on Thursday. http://www.ac-markets.com/forex-news/forex-2008-5-7.aspxWed, 07 May 2008 00:00:00 GMTrss@ac-markets.comThe Dollar fell on Monday for the first time in three sessions as oil prices hit a record high, sparking debate about the strength of the US economy. Federal Reserve survey showing the banking sector remained in the grips of a credit crunch. After trimming interest rates to 2% last week, the Federal Reserve hinted it may move to the sidelines and pause its aggressive seven-month easing campaign that has reduced the Dollar's appeal to global investors. The Fed next meets on June 24-25 and federal funds futures contracts were on Monday pricing in just a 12% chance of another 25bp rate cut to 1.75%. ECB President Jean-Claude Trichet warned again on Monday of "significant" inflation risks, suggesting benchmark rates would likely stay fixed at 4% when the central bank meets on Thursday.http://www.ac-markets.com/forex-news/forex-2008-5-6.aspxTue, 06 May 2008 00:00:00 GMTrss@ac-markets.comThe Dollar rose against a basket of currencies on Friday after an unexpectedly small drop in US non-farm payrolls left investors hoping any US recession would prove a shallow one. Labor Department data showed US employers cut 20k jobs in April, marking the fourth straight month of contraction in employment. Analysts have been looking for payrolls to decline by 80k after an upwardly revised loss of 81k jobs in March. The unemployment rate also eased to 5 from 5.1% in March. Latest data supported views that the Federal Reserve would refrain from cutting interest rates again, provided financial markets did not deteriorate further. http://www.ac-markets.com/forex-news/forex-2008-5-5.aspxMon, 05 May 2008 00:00:00 GMTrss@ac-markets.comThe dollar held firm ground overnight trading between 1.5446 and 1.5482. Yesterday’s data came out slightly better than expectations. Australian retail sales came out better than expected at 0.5%m/m versus a consensus of 0.3%m/m. Non-Farm Payrolls announcement is the highlight of the day. http://www.ac-markets.com/forex-news/forex-2008-5-2.aspxFri, 02 May 2008 00:00:00 GMTrss@ac-markets.comThe Dollar rose to an almost one-month high versus the Euro on Tuesday, buoyed by growing views the Federal Reserve is ready to signal a pause in its interest rate cutting-campaign and by weak European economic data. Analysts expect the FOMC to cut the benchmark lending rate by 25bp to 2% and indicate a pause for now, after an aggressive exercise that has cut rates by 300bp since mid-September. While markets are expecting a slightly hawkish tone in the FOMC's statement accompanying the rate decision, poor economic data from the euro zone raised doubts on the ECB's ability too maintain its tough stance on inflation and interest rates. The Sterling was hurt by a warning from policy-maker David Blanchflower that Britain faced a real risk of recession unless the Bank of England took "aggressive" action. http://www.ac-markets.com/forex-news/forex-2008-4-30.aspxWed, 30 Apr 2008 00:00:00 GMTrss@ac-markets.comThe Dollar rose to an almost one-month high versus the Euro on Tuesday, buoyed by growing views the Federal Reserve is ready to signal a pause in its interest rate cutting-campaign and by weak European economic data. Analysts expect the FOMC to cut the benchmark lending rate by 25bp to 2% and indicate a pause for now, after an aggressive exercise that has cut rates by 300bp since mid-September. While markets are expecting a slightly hawkish tone in the FOMC's statement accompanying the rate decision, poor economic data from the euro zone raised doubts on the ECB's ability too maintain its tough stance on inflation and interest rates. The Sterling was hurt by a warning from policy-maker David Blanchflower that Britain faced a real risk of recession unless the Bank of England took "aggressive" action. http://www.ac-markets.com/forex-news/forex-2008-4-30.aspxWed, 30 Apr 2008 00:00:00 GMTrss@ac-markets.comThe Dollar fell against a basket of currencies on Monday, breaking a three-day rally, as buyers retreated to the sidelines ahead of key economic data and awaiting the Federal Open Market Committee (FOMC) statement and rate decision. The policy-setting FOMC is widely expected to cut the benchmark overnight lending rate by only 25bp to 2%. ECB President Jean-Claude Trichet and Governing Council member Yves Mersch both said risks to price stability remained on the upside, with Trichet adding that there were no grounds for complacency. Their comments suggested the ECB is not ready to start cutting interest rates from 4% soon, even with regional data pointing to an inflation slowdown in four German states for April. http://www.ac-markets.com/forex-news/forex-2008-4-29.aspxTue, 29 Apr 2008 00:00:00 GMTrss@ac-markets.comLast week's rally in the Dollar may have also led some investors to sell the currency ahead of the weekend to cash in profits, traders said. On Friday, Dollar had limited reaction to a report showing US consumer confidence fell for a third straight month, touching its weakest in more than 25 years. In Europe, the Ifo German business sentiment index showed the biggest monthly fall since September 2001 on Thursday, taking the April headline number to a two-year low. The percentage chance the Fed will keep its benchmark interest rate unchanged at 2.25% at this week meeting rose to about 26%. Just a week ago, futures markets were pricing between a 25 to 50bp cut. Meanwhile, FX participants were paring bets that the ECB's next move will be a hike in benchmark interest rates. http://www.ac-markets.com/forex-news/forex-2008-4-28.aspxMon, 28 Apr 2008 00:00:00 GMTrss@ac-markets.comThe Dollar rose across the board on Thursday after US government data showed resilience in the labor market, while a key measure of business sentiment in Germany plunged undermining the Euro. The Euro's fall followed an early week rally to a record 1.6019 on Tuesday, the highest level since the Euro’s inception in 1999, as investors bet the ECB would raise interest rates to restrain inflation. The headline Ifo index fell to a much lower-than-expected 102.4 in April, its lowest since January 2006. The Ifo, coupled with a slump in the euro zone manufacturing PMI to levels nearly implying an economic-contraction on Wednesday, suggested that the euro zone may not be immune to a US economic slowdown. ECB President Jean-Claude Trichet said on Thursday that there is concern about the impact of currency fluctuations on financial stability. The Dollar's gains come as investors look closely at whether the Federal Reserve might be ready to pause in its aggressive run of interest rate cuts aftehttp://www.ac-markets.com/forex-news/forex-2008-4-25.aspxFri, 25 Apr 2008 00:00:00 GMTrss@ac-markets.comThe Euro made its biggest drop against the Dollar in the past three weeks on Wednesday as Euro zone PMI dropped to an almost three-year low in April. Another report showed German manufacturing activity also declined. Demand for the European currency slid further after comments by a member of European Central Bank Governing Council, Christian Noyer, put down speculation of further interest rate increases by the bank. The ECB is expected to keep its key interest rate on hold at 4%, while the US Federal Reserve is expected to lower its benchmark from 2.25% later this month. The Euro’s record high on Tuesday was boosted by hawkish remarks from ECB's Noyer's that the central bank will do what is needed to being inflation back to target. A slide in British mortgage approvals to a record low in March underlined serious weakness in the housing market and suggested the Bank of England may continue cutting rates. The data wiped out initial sterling gains made on BoE minutes showing there was dhttp://www.ac-markets.com/forex-news/forex-2008-4-24.aspxThu, 24 Apr 2008 00:00:00 GMTrss@ac-markets.comEuro rose against the Dollar on Tuesday trading above 1.6000 for the first time since its 1999 inception amid growing expectations that the European Central Bank's next move may be an interest rate hike. ECB Governing Council Member Christian Noyer said the bank would do what is needed to bring inflation back to its target of just below 2%, adding that the central bank would move rates if needed. That followed comments from Governing Council member Yves Mersch, who said the ECB has to ask itself each month whether a rate rise is needed to control inflation. ECB is seen keeping rates at least at a six-year high of 4% for a while. In contrast, markets expect the Federal Reserve to lower benchmark US rates further from the current 2.25% at a policy meeting on April 29-30. US economic data on Tuesday showed the housing market remains soft, with existing home sales falling 2% last month to 4930k. The Bank of Canada cut its benchmark interest rate by 50bp as expected. http://www.ac-markets.com/forex-news/forex-2008-4-23.aspxWed, 23 Apr 2008 00:00:00 GMTrss@ac-markets.comUS Existing Home Sales and the House Price Index will be released today; the market hoping to see some stability in those numbers. The Bank of England announced a robust mortgage rescue plan. The Bank of Canada is widely expected to cut rates.http://www.ac-markets.com/forex-news/forex-2008-4-22.aspxTue, 22 Apr 2008 00:00:00 GMTrss@ac-markets.comThe Dollar climbed to a seven-week peak against the Yen and moved further away from a record low versus the Euro on Friday after Citigroup's results sparked hope that the worst of the credit crisis has passed. Citigroup, the largest US bank, posted a quarterly loss of $5.1bio and pretax write-downs of $6bio. Shares in the company rose as investors were appeased by efforts being made to get past its credit problems and drive down costs. Despite the Dollar's gains, analysts cautioned that although US bank earnings this quarter have not been as good as some had expected, there are still indications the credit crisis is far from over. European Central Bank Governing Council member Klaus Liebscher said no room exists to cut euro zone interest rates, adding that he is not ruling out tightening in the region. European interest rates would stay put at 4% until later this year. The Federal Reserve, on the other hand, is seen cutting rates further from the current 2.25%. http://www.ac-markets.com/forex-news/forex-2008-4-21.aspxMon, 21 Apr 2008 00:00:00 GMTrss@ac-markets.com