Wednesday, November 15, 2006

Dollar Climbed on Strong Manufacturing Data, Awaits CPI

The dollar edged higher earlier across the board after a survey showed manufacturing activity in New York area expanded. New York Fed Empire manufacturing index surprisingly rose from 22.9 a month earlier to 26.66 in November, exceeding the consensus forecast of 15. After climbing slightly on the strong figure, the dollar is mainly trading in the range ahead of the release of U.S. CPI.

The market will focus on U.S. CPI report due tomorrow at 8:30 EST. CPI, a key inflation gauge, is expected to be slightly improved from ¨C0.5% to -0.3% in October. Excluding food and energy costs, core CPI, is forecasted to keep growing at a monthly rate of 0.2%. Recall yesterday PPI, a less important inflation measure, came in weaker than expected and triggered a dollar tumble. If we see a soft number tomorrow, it will be interpreted that the inflation is tame and lead to a dollar sell off.

EURUSD will face interim resistance at 1.2830, followed by 1.2850 and 1.2870. Additional ceilings will emerge at 1.29, backed by 1.2950. Support starts at 1.28, backed by 1.2770, 1.2750 and 1.27. Subsequent floors are eyed at 1.2650.

0 Comments:

Post a Comment

<< Home