*Last Updated April 3, 2006, 11:59 pm

Daily report by CMC Markets

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FOREX ANALYSIS

Dollar gives up gains as economic data fails to impress

April 4th - Yesterday’s mixed economic data left the dollar to give back most of Friday’s gains as traders once again became nervous over the economic outlook for the U.S. A slowdown in manufacturing seems to have triggered the run of dollar selling, but with key economic announcements due later in the week – including rate verdicts from the Bank of England and European Central Bank on Thursday, plus US non-farm payroll data on Friday – there could be a degree of reluctance to now move back into the market in any significant manner until this potentially directional information has been released. There’s certainly little of note scheduled for release today although Eurozone PPI and unemployment data may provide the Euro with a little more support, especially if there are any solid suggestions that emerging inflationary pressures will lead to pressures at the ECB to hike rates further. Consensus is that no change will be seen at this week’s meeting but at least two further increases are expected this year and any further suggestion that the first hike will be as soon as May could again provide additional support for the common currency in the short term.

Andrew Cottrill and Enis Mehmet



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