*Last Updated December 15, 2005, 12:35 am

Daily report by CMC Markets

Website: http://www.cmcmarkets.com

Email: info@cmcmarkets.com

FOREX ANALYSIS

Dollar retreats against Yen in face of improving Japanese economic sentiment

December 15th - Upbeat economic data out of Japan in recent hours combined with yesterday’s surprise jump in the US trade deficit has had the inevitable consequence of pushing the Yen higher once again against the dollar. The retreat away from 120 has certainly been rapid and we’re now trading back at levels not seen since the start of November. There is however no shortage of US economic data due for release as the session progresses so further direction could well be forthcoming. After Tuesday’s suggestion of a more dovish sentiment emerging at the FOMC, today’s US inflation figures will be closely watched. Expectations are for a month-on-month fall, helped no doubt by the falling price of oil, but if inflationary fears are abating then again it’s reason for the current stance on monetary policy to perhaps be relaxed and this will leave the greenback further exposed on the downside. Weekly jobless claims and the TIC data are also expected – again key will be ensuring that the latter covers the wider trade deficit and although expectations are that it will, the margin is forecast to be somewhat slimmer this month than has been seen for some time. The stronger Yen may be hurting Japanese exporters but the US – and the worrying trend seen in the trade balance – certainly have the chance to benefit…

Tim Wilbraham and Enis Mehmet



Phone USA: + 1 212 644 4220
Phone UK: + 44 207 170 8201
Fax USA: +1 212 644 4222
Website: http://www.cmcmarkets.com

Disclaimer: Although obtained from sources believed by us to be reliable, CMC Markets and its affiliates cannot guarantee the accuracy or completeness of the information upon which this commentary is based. This commentary does not purport to disclose the risks or benefits or entering into particular transactions and should not be construed as advice in any specific instance. The views in this report constitute our judgement as of this date and are subject to change without notice.



Fx-charts.com Disclaimer: The information contained on this website is subject to change without notice, views and opinions expressed on fx-charts.com may be those of individual authors and may not necessarily be the views of fx-charts.com or its officers and employees, we make no claim to the accuracy or timeliness of any information contained herein. We recommend obtaining advice from a suitably qualified financial advisor before entering into any financial transactions or agreements. The use of this website constitutes acceptance of our privacy policy, disclaimer and terms of use. This website is available for information and educational purposes only.