*Last Updated December 30, 2005, 2:03 am

Daily report by CMC Markets

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FOREX ANALYSIS

Thin holiday trading conditions remain as economic data proves hard to find.

December 30th - As thin trading conditions continue to prevail in currency markets, there’s been little information around to provide traders with any meaningful direction. Yesterday’s US weekly jobless claims came in only slightly higher so this was insufficient to illicit any kind of reaction, whilst the fact that crude has edged up through the $60 mark also seems to be of little concern – at least for the time being. Yesterday’s oil inventory data showed some sharp declines in reserves of refined products, but the fact remains that crude stocks are looking robust, although next month’s OPEC meeting will be closely watched to see if there’s any reduction in production quotas – something that would likely have a damaging effect on the US trade deficit and in turn see the greenback fall from favour with a number of investors. Elsewhere there has only been lower level economic data released and this theme is set to continue right through today’s session. Come the New Year however, a flurry of readings are lined up and this – combined with the fact we’ll see a return to more normal levels of liquidity – can be expected to result in something of a shake-out in prices over the early part of next week.

Paul Jackson and Enis Mehmet



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