*Last Updated February 6, 2006, 12:20 am

Daily report by CMC Markets

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FOREX ANALYSIS

Currency markets start week on quiet note; focus on Oil, Iran

February 6th - A rather mixed bag of economic data from the U.S. on Friday was sufficient to lead the dollar higher across the board just ahead of the weekend break although the trend to continue moving higher proved to be short lived. The geopolitical situation remains complex and oil prices are edging up and although there’s no prospect of any quick action in Iran, the longer term outlook doesn’t look too great just now leaving crude prices exposed to further rises whilst there’s also the prospect that any US-driven military action would quickly push the dollar further out of favour. Without these issues, the prospect of additional rate hikes from the FOMC in the not too distant future may have been sufficient to see the greenback extend last week’s gains but with a relatively quiet few days ahead on the U.S. economic calendar, the next direction may well be difficult to call. Friday’s trade balance data for December will as always be closely watched and any notable movement here may elicit a reaction amongst traders but again with little change forecast over the November figure, the number is unlikely to be causing much excitement in the market…

Wayne Roworth and Enis Mehmet



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