*Last Updated January 26, 2006, 1:09 am

Daily report by CMC Markets

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FOREX ANALYSIS

Dollar regains some lost ground as equity markets begin to stabilise.

January 26th - The dollar has continued to plot a recovery course through the overnight session, helped by a number of factors including a degree of stability emerging in global equity markets and falling oil prices despite yesterday’s somewhat mixed inventory readings. Weekly jobless claims data due later in the session will be closely watched again as the market looks to judge the current strength of the economy, and with this set to be followed by the Q4 GDP reading tomorrow then the FOMC meeting next Tuesday, there’s going to be no real shortage of further directional information for the greenback in the days ahead. The Yen has moved well above the key 115 level against the dollar – a point that it has been trading around for the last few weeks – and although reports overnight showing a robust growth in both imports and exports for the country has seen the JPY regain a little ground, unless we see some surprises out of the US ahead of the weekend break and ahead of next week’s companying comments from the Fed regarding monetary policy further into 2006, a sharp recovery would seem unlikely in the short term.

Stuart Scrase and Enis Mehmet



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