Dollar downbeat amidst quiet economic calendar, EUR/USD eyeing 1.30
August 22nd - The dollar is clearly remaining under a degree of pressure right now as traders await further signals from the Fed as to the likely future direction of interest rates. These may emerge as the Federal Reserve’s annual policy retreat continues although attention is likely to be most focused on Ben Bernanke’s speech on Friday so otherwise it’s set to be another largely quiet day on the economic calendar. Data out of Japan overnight has done little to drive the Yen higher in recent trade – indeed the dollar is sitting towards the upper end of the 114-117 trading range that has been seen over the last few weeks as the prospect of another rate hike from the BoJ seems to be pushed further away. In the Eurozone however numbers including the German ZEW survey are slated for release during the session so a bullish reading here could provide the impetus needed to drive the common currency towards 1.30 against the dollar and with it to new highs for 2006, especially if it looks as if the ECB will have cause to hike interest rates at their forthcoming monetary policy meeting next week.
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