*Last Updated June 11, 2006, 11:55 pm

Daily report by CMC Markets

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FOREX ANALYSIS

Dollar buoyant ahead of key economic data

June 12th - Mixed data out of Japan overnight has done little to support the Yen as traders remain committed to the greenback, convinced now that another 25-point hike will be forthcoming at the end of the month. Japanese GDP for Q1 may have been revised upward in the last few hours but at the same time we’ve seen a reported reduction in consumer confidence, with this measure falling back below the key 50 mark. As such, USD/JPY is continuing to trend upward and back towards levels not seen since the start of May ’06. Really the focus now seems to be on just how many further rate hikes are to be expected from the Fed. Data due in the next few days – starting with the budget numbers today, followed by inflation data and comments from Fed chief Ben Bernanke as the week progresses – may give some further indications here but without doubt if the economy continues to look robust, speculation will be for the run of rate hikes to carry on right through the summer and as a result, further gains for the greenback may well be seen in due course…

Andy Cottrill and Enis Mehmet



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