*Last Updated August 28, 2006, 2:03 am

Daily report by CMC Markets

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FOREX ANALYSIS

Quiet start to week but dollar already under pressure

August 28th - It has been another quiet start to the week on the economic calendars although the pace should pick up as we move towards the month-end. A raft of US indicators are scheduled for release in the coming days so this should offer some additional direction although central to this is going to be how consensus continues to build regarding interest rate policy ahead of the next FOMC meeting. Geopolitical factors such as the ongoing situation in Iran and the threat of hurricanes disrupting US manufacturing cannot be overlooked and essentially these elements look set to hang around in the medium term too. The dollar has however already found itself trading weaker in early European trade, although there is mounting speculation that we may see the ECB tighten its monetary policy on Thursday after this week’s meeting. London markets are closed today for a public holiday and although cable has been following the EUR/USD trend higher in recent hours, there’s going to be no fundamental direction for the Pound essentially ahead of Wednesday’s consumer credit numbers. Lower volumes with London being closed may also lead to some added volatility in the short term but in summary, once again the dollar looks to be on the back foot.

Paul Jackson



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