*Last Updated July 28, 2006, 12:30 am

Daily report by CMC Markets

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FOREX ANALYSIS

Mixed mood prevails ahead of US growth data

July 28th - Yet again there’s been a degree of hesitation amongst traders overnight in trying to decide what the outlook is for the major currencies as we approach the weekend break. Japanese CPI posted an arguably impressive 0.6% growth for June although this was entirely in line with market expectations and when combined with a surprise jump in unemployment, it’s perhaps of little surprise that the Yen fell from favour. However, losses proved to be short lived as there’s clearly heightened speculation as to what the US GDP readings will be when released later in the day, just hours ahead of the weekend break. Other than this number and the Michigan sentiment readings there’s not too much of consequence on the economic calendar today but further posturing should probably be expected in the next few hours as both Cable and EUR/USD have given back some of yesterday’s gains despite suggestions that any slowdown in the US economy may happen a little faster than had been previously thought. With these fundamental factors due at 8.30EST then again at 9.45EST, arguably any direction established ahead of this will be somewhat meaningless, but at the same time it could make for a rather hectic market in the closing hours if today’s data holds any real surprises…

David Hutchings and Enis Mehmet



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