*Last Updated April 27, 2006, 12:34 am

Daily report by CMC Markets

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FOREX ANALYSIS

Beige book leaves dollar uninspired; Bernanke testimony awaited

April 27th - Yesterday’s beige book continued the run of upbeat economic news out of the US but there’s ongoing speculation as to just how good the outlook remains and today’s testimony by Ben Bernanke to Congress will be closely watched for any suggestion that the hawkish mood at the FOMC will soon be on the way out. Having reacted sharply on a couple of occasions earlier yesterday, the greenback was left in a somewhat muted mood after these most recent numbers, although with weekly jobless claims also due later today and the Michigan sentiment reading scheduled for tomorrow, there’s certainly scope for further volatility ahead of the impending month-end. The Asian session has delivered little in the way of direction although tonight there’s a host of Japanese economic numbers expected including CPI and household spending. Any suggestion that inflation is on the increase could again raise speculation as to when the Bank of Japan will move ahead with further tightening of monetary policy, in turn potentially lifting the Yen again but USD JPY is already sitting in the 114.50-75 range so the scope for some profit taking off the week’s gains cannot be ignored.

David Hutchings and Enis Mehmet



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