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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: 2.5% 0.15% 3.7= 5% 4.5% 1.75-2.75% [IMAGE] =09 [IMAGE] Dollar Edges Higher Ahead o= f ECB Rate Announcement October 25, 7:00 AM: EUR/$..0.89111 $/JPY..123.20 = GBP/$..1.4257 $/CHF..1.6595 Dollar Edges Higher Ahead of ECB Rate Announce= ment by Jes Black ECB rate announcement at 7:45 AM At 8:30:00 AM US Sept D= urable Goods orders m/m (exp -1.4%, prev 0.0%) US Q3 Employ. Cost Index (ex= p 0.9%, prev 0.9%) US Sept Ex Defense m/m (exp n/f, prev 0.4%) US Jobless C= laims (exp 480k, prev 490k) At 10:00:00 AM US Sept Existing Home Sales (exp= 5.2 mln, prev 5.5mln) US Sept Help Wanted Index (exp n/a, prev 53) The do= llar gained an upper hand in European trade, muscling its way to a fresh 2-= month high of 123.36 yen, but failed to break technical resistance around 1= 23.30. A growing sense of dismay with the Japanese outlook prompted traders= to poor back into USD/JPY after it fell back to support around 122.40 over= night. The dollar's ability to maintain above 122.00 gave off a strong buy = signal, and a break of 123.30 would open the way for a further rally toward= s 123.70 before 124.30, dealers say. EUR/USD also fell from session highs a= round 89.40 against the broadly stronger dollar. However, major currencies = traded in tight ranges ahead of the key European Central Bank meeting at 7:= 45 AM. Whether or not they do cut rates today is uncertain and the ECB is w= ell know for wrong-footing the market. The euro showed little reaction to = today's data from the Eurozone as most dealers took to the sidelines ahead = of today's ECB meeting. EUR/USD was unchanged after Italian consumer confid= ence rose in October because the raw data also pointed to a worsening in se= ntiment following the U.S.-led attacks on Afghanistan. ISAE said in its mon= thly report that the adjusted index rose to 124.3 this month from 121.2 in = September, with confidence particularly strong on prospects for saving. How= ever, ISAE said in a statement that "unfavourable expectations are emerging= on the general economic situation, on unemployment and on intentions to pu= rchase durables". In the week following the start of the U.S. retaliatory s= trikes against Afghanistan, which began on October 7, the unadjusted index = fell to 118.3. "That contraction seems to mirror even greater pessimism tha= n that registered immediately after the World Trade Centre attack," ISAE sa= id. Meanwhile, benign German inflation data and dismal business confidenc= e surveys in Italy and Germany raised hopes of a rate cut this week, but un= certainty still prevails. Preliminary data from Germany showed the national= inflation rate drawing near to the ECB's 2.0% target. This confirms the do= wntrend, but it was also expected and may not be enough for the ECB to lowe= r rates since Eurozone inflation for September stood at 2.4%. The central = bank last lowered its benchmark minimum bid rate by 50 basis points to 3.75= percent on September 17, its third easing of monetary policy this year. Th= e rate cut was an effort to restore confidence following the September 11 a= ttacks. A poll conducted by Reuters this week showed that out of 50 economi= sts questioned, 27 now favor a rate cut. Last week, 21 of the same 50 backe= d a cut. The number expecting no change has also dropped to 18 from 27 last= week, putting the chance of a rate cut at 52 percent, up from 48 percent l= ast week. The euro would likely rally from current levels around 89 cents= if the ECB were to cut by 25 basis points. But because a 25 bp cut has alr= eady been priced into the market, the prospect for a sustained euro rally i= s not great. However, a more surprising 50 bp cut would trigger a substanti= al rise in the euro, possibly above the 90-cent figure. But given the curre= nt optimism surrounding the US economy, any gains are likely to be limited = unless today's US data disappoints markets. Euro remains in position to tes= t against support at the 50% Fibonacci retracement of 88.40. Current resist= ance holds at 89.40 if the ECB does not cut rates. Following this mornings= rate announcement by the ECB will be key US economic data which will give = a markets a feel for the effect of the September 11 attacks on durable good= s orders as well as this week's jobless claims figures. Durable goods order= s are expected to show a sharp 1.4% decline in September from last month, b= ringing the yearly rate down to around 16% after stabilizing in July and A= ugust. Further declines are expected in the coming months as consumer and b= usiness investment remains poor. Meanwhile, jobless claims are expected to = hover around 480 k for the October 20 work week. Home sales are expected to= ease back in September after soaring in August and the effects from te att= acks are not likely to be felt until later, housing analysts say. GBP/USD= further retrenched in European trade, falling to a session low of 1.4249 f= rom overnight highs around 1.4300. Losses in EUR/USD as well as weakness ag= ainst the euro weighed on the pound. On Wednesday, Sterling seesawed on a c= ombination of weak economic data followed by supportive comments by UK Mini= ster Peter Hain who said it would be wrong to join the euro at the present = time because the UK was better positioned to endure an economic slowdown th= an Europe. Despite the remark, markets saw little reassurance in the earlie= r data, which showed business confidence among UK manufacturers plummeted t= o its lowest in three years in October. This prompted the CBI to call for a= 50 bp cut from the Bank of England, the first time in three years the CBI = has called for such a large rate cut. GBP/USD is now hovering near support = at 1.4255 but the bearish trend is still intact after failing to regain the= 1.43 level. Dealers will also look to earnings reports for Q3. So far, ov= er 3/4 of the companies reporting matched or exceeded projected earnings ta= rgets. Today's lineup before the bell are Dow Chemical, Goodyear, and World= Com. Those reporting after the bell are Coca-Cola and JDS Uniphase. Both D= ow and Nasdaq futures are in negative territory. =09[IMAGE] Audio Mkt. A= nalysis Euro Steadies Ahead of Thursday's ECB Meeting Articles & Idea= s The US Dollar: Before and after the Crisis EURO: German IFO Will Remin= d ECB to Build Growth Articles & Ideas Forex Glossary Economic Indi= cators 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 . =09
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