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[IMAGE] Forums Discuss these points in the Forums: Forexnews Forum T= echnicals Live Charts Analysis available from: Cornelius Luca J.P. Chorek= Technical Research Ltd. Charts & News featuring Standard & Poor's = Interest Rates US: Japan: Eurozone: UK: Switzerland: 1.75% 0.15% 3.= 25% 4.0% 1.25-2.25% [IMAGE] =09 [IMAGE] Sterling Steady After BoE,= Markets Now Await ECB February 7, 7:00 AM: EUR/$..0.8665 $/JPY..133.71 GB= P/$..1.4108 $/CHF..1.6991 Sterling Steady After BoE, Markets Now Await ECB= by Jes Black At 7:00 AM Bank of England Monetary Policy Meeting At 7:45 A= M European Central Bank Monetary Policy Meeting At 8:30:00 AM US Jobless Cl= aims (exp 380k, prev 390k) At 3:00:00 PM US Dec Consumer Credit (exp 7.3 bl= n, prev 19.9 bln) The euro and pound held to a tight range against the maj= ors ahead of today's key central bank meetings. Both the European Central B= ank and the Bank of England are expected to hold rates unchanged at 3.25% a= nd 4.0% respectively. Meanwhile, traders will continue to look to Wall Stre= et for direction in the dollar as caution has again taken hold. Market expe= ctations for a rebound in earnings are still seen by many as too optimistic= . Therefore, the upside in the dollar is dependant on real economic growth = while there is always a risk of a downward surprise. Notably, the dollar f= ailed to capitalize on stronger than expected productivity data on Wednesda= y as Wall Street came under increasing pressure in the face of investor cau= tion. US stocks finished down after accounting worries, jitters over earnin= gs warnings, and a murky outlook offset a 3.5% rise in Q4 US productivity. = The Dow slid 32 points to 9653 and NASDAQ fell 25 points to 1812. Today's f= utures are unchanged. Company earnings reports include ALLIANZ AG, British = Telecommunications PLC, MCI Group, Novartis AG, PepsiAmericas, Royal Dutch = Petroleum and WorldCom Inc.-WorldCom Group. The euro was little changed on= the day except for a half cent spike higher after ECB President Duisenberg= announced that he would retire in July 2003. Traders reacted favorably for= the euro because there has been criticism on how the ECB sets its policy a= s well as the ECB President himself. Other ECB officials were quick to give= their support for Duisenberg's decision and Italy's Tremonti says he think= s highly of BoF Governor Trichet as a person. His comment is seen solidifyi= ng the unity the ECB has for Trichet as a successor to Duisenberg. The ECB= is likely to cite inflationary concerns in January as preventing it from l= owering rates this month. But markets are unlikely to react favorably to th= e ECB's decision due to the subdued outlook for growth this year. The Euro= pean Commission today said it forecast eurozone GDP will accelerate by anyt= hing between 0.1 and 0.4 percent in the first quarter of 2002 compared with= the previous quarter. For the last quarter of 2001, today's data confirmed= a small 0.1% rise q/q. It would imply that the trough of the recent slowd= own is situated in the last quarter of 2001, but also that activity will on= ly moderately accelerate at the beginning of this year," the European Commi= ssion said in a statement. As expected, the Bank of England held rates unc= hanged at 4.0%. Strong consumer spending and a boom in the housing market a= re offsetting the recession prone manufacturing industry. The net effect is= for a relatively healthy economy. But markets may question why the Bank of= England today decided to keep rates unchanged. With low inflation and the = highest interest rates of either the US or the ECB, manufacturers are likel= y voice their discontent. However, the BoE is seen wanting to curb domestic= demand to avoid a boom/bust cycle in consumer spending. EUR/USD was litt= le changed from its US close after a sharp rebound from a low of 86.45 to a= day's high of 86.92 after Duisenberg's announcement. But the euro failed t= o rise above the psychological 87-cent mark and is again trading in a range= of 86.50 to 86.80. Failure to regain resistance at 86.80 is seen calling u= pon support at 86.35 and 86.00, before another attempt at 86.60. Resistance= is seen at 87.10, which marks the 38.2% retracement of the .8953-.8560 mov= e. A rise above that level would target the key 87.50 mark and a breach of = this level would be bullish for the EUR/USD. However, only a move above pas= t resistance at 88.60 would really damage the bear trend. GBP/USD fell to = a day's low of 1.4085 after breaking support at 1.4115. Cable peaked at a 1= -week high of 1.4247 in European trade on Tuesday. But failure to maintain = above 1.4110 would call upon key support at 1.4180, which marks the 38.2% r= etracement of the 1.4418-1.4038 move. Follow up support is seen at last wee= k's 6-month lows of 1.4045. Upside capped at 1.4235, 1.4270 and 1.4300. Me= anwhile, the Swiss franc is likely to remain under pressure against the dol= lar and euro after the Swiss KoF institute said today that their Q401 surve= y shows the economy will continue to slow in Q102 and not reach bottom unti= l the end of H1. Today's data from the US is expected to show another fal= l in jobless claims to 380k this week from 390k the previous. This will lik= ely keep the 4-week average below 400k for a second week which is a clear s= ign of improving labor market conditions. USD/JPY rose to a session high o= f 134.15 but dealers are likely to remain weary about pushing it beyond the= 135 mark give recent comments from Japan's top financial diplomat, Kuroda,= that Japan was comfortable with a range of 130-135, for now. Kuroda also s= aid that rapid foreign exchange movements are undesirable. Therefore, given= this weekend's G7 meeting, the yen is likely to remain in a tight range ag= ainst the dollar. Meanwhile, all eyes are on Friday's monetary policy mee= ting in Japan. Given the resurging pessimism surrounding the Japanese econo= my, there is a chance the Bank of Japan will take additional easing steps t= o stop the deflationary trend that menaces the economy. In order to curb t= he sharp rise in Japanese Government Bonds, the Bank of Japan might surpris= e markets and increase the outright purchases of JGBs at Friday's policy me= eting. Currently they purchase 800 billion worth of JGBs per month and may = decide to increase this by 10-25% to around 1 trillion in an effort to incr= ease liquidity and stabilize bond yields. The move would likely weaken the = yen. =09[IMAGE] Audio Mkt. Analysis USD Gives Up Productivity Gains = Articles & Ideas Even Koizumi Drags Down the Yen Dollar Does Davos In Ne= w York Articles & Ideas Forex Glossary Economic Indicators Forex = Guides Link Library [IMAGE] =09 =09=09[IMAGE][IMAGE] [IMAGE][IMAGE]=09 =09=09 This e-mail is never sent unsolicited. If you wish to unsubscribe f= rom this or any other Forexnews.com newsletters, please click here . Any = opinions expressed by representatives of Forexnews.com or its affiliates as= to the commentary, market information, and future direction of prices of s= pecific currencies reflect the views of the individual analyst, and do not = necessarily represent the views of Forexnews.com or its affiliates in any w= ay. In no event shall Forexnews.com or its affiliates have any liability fo= r any losses incurred in connection with any decision made, action or inact= ion taken by any party in reliance upon the information provided in this ma= terial; or in any delays, inaccuracies, errors in, or omissions of informat= ion. =09
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