*Last Updated April 11, 2006, 12:18 am

Daily report by CMC Markets

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FOREX ANALYSIS

Euro one to watch as Italian election verdict emerges

April 11th - Once again there’s little around to drive currencies ahead of the European market open and as a result a degree of attention is focusing on vote counting in the Italian election. There seems to be a consensus that a change of administration will certainly not be a bad thing for the Euro and suggestions that Prodi’s coalition may have won do appear to be lending some support to the common currency, but with winning margins looking to be incredibly slim, just how easy it would be to govern the country going forward remains open to debate. However, similar upside was also seen in the latter part of yesterday’s European session as exit polls started to offer the same verdict but in summary with lacklustre growth in recent years and the world’s third largest national debt, it would seem difficult for the situation in Italy to get much worse. Final counting may now prove to be a somewhat drawn out affair with the race being so close. Further volatility may well be seen if the verdict starts to look more decisive and there’s also the ZEW survey due for release later this morning – again something that may offer a degree of direction for EUR/USD. In what may otherwise prove to be a quiet session, this could be the currency pair to watch…

Paul Jackson and Enis Mehmet



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