Friday, December 08, 2006

Forex News: Speculatively tuned investors will set the tone

Forex News

“The week was characterised with absolute silence at the Forex market”, Artem Enshin, NorthFinance financial analyst says. “Maximum fluctuation was 100 points in the corridor of 1.3250-1.3350.

After rash rally, the investors have taken the pause and started waiting for one of the most important economic indicators in the USA - nonfarm payrolls.

Yesterday the interest rates in England and in the euro area were announced. Though the Bank of England maintained its rate at the same level and the European Central Bank increased its rate by 0/25%, the events were expected at the market. The market took into account these changes and dynamics was not observed.

As for nonfarm payrolls, which are published today, the index is expected to rise to 115K. During three months, the reaction for this indicator was insignificant, but we expect strong reaction because the market was too volatile and traded-out.

We may expect the level of 1.3500 for EUR/USD before the end of the year, because during the pre-New Year period many institutional investors leave the Forex market or slow down their activity, while speculatively tuned investors set the tone. As usual, during the period the market is characterised as “thin””.


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