*Last Updated August 22, 2006, 11:55 pm

Daily report by CMC Markets

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FOREX ANALYSIS

Markets looking quiet as traders await key data next week

August 23rd - Without doubt there’s a general shortage of news around to direct currency markets just now. Speculation as to the future direction of interest rate policy at the Fed continues to pull on the dollar, whilst the Euro is still looking somewhat pressured after yesterday’s disappointing ZEW survey but otherwise it’s just a case of waiting for the numbers to emerge and beyond that Ben Bernanke’s speech this coming Friday. US existing home sales data is due for release later in the session and many will be looking for this to reflect the inflationary pressures that are repeatedly being mentioned by the Fed, although failure to show anything of substance could easily see the dollar unwind some of its recent gains here. Elsewhere there are some second tier numbers due for release out of the Eurozone but overall unless we see any significance in the housing data the theme for today seems set to be one of posturing. Essentially with the Fed’s latest meeting minutes and the next ECB rate verdict both due for release next week, numbers released ahead of this may give some ideas but many traders will doubtless be happy to remain sidelined until there are some fundamental facts to support the market.

Andy Cottrill



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