*Last Updated February 21, 2006, 11:52 pm

Daily report by CMC Markets

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FOREX ANALYSIS

Dollar weakens slightly after in-line FOMC minutes; CPI data awaited

February 22nd - Last night’s much-awaited release of the FOMC meeting minutes did little to direct currency markets although the dollar found itself under a degree of pressure as it became clear that the hawkish stance over interest rates was abating with monetary policy now deemed as being close to what was needed. Another couple of rate hikes in the coming months remain likely but it’s the US CPI data due for release later in today’s session that may well prove to be the next significant item of directional information available. At a lower level, the Bank of England will also release its latest monetary policy meeting minutes during the session and this could provide some direction as to where the Pound goes next – inflation is below target but robust property prices may lend a degree of caution against any quick attempt to boost economic growth with cheaper credit. The Yen has also posted some incremental gains after yesterday’s failed attempt at 119 for USD/JPY, but various trade figures due for release later tonight could again offer additional momentum in the short term. Overall however, the outlook may well remain somewhat quiet and further churning of currencies would likely be of little surprise…

Paul Jackson and Enis Mehmet



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