*Last Updated June 23, 2006, 12:18 am

Daily report by CMC Markets

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FOREX ANALYSIS

Dollar holds gains, traders sidelined ahead of FOMC

June 23rd - After yesterday’s solid gains by the dollar there’s been little around to provide any additional direction through the overnight session as many traders sit on the sidelines ahead of next week’s FOMC meeting. Speculation over activities at the central banks in the UK and Japan – the MPC now being down to 7 members and Governor Fukui’s tenure being called into question - had without doubt taken the dollar higher in yesterday’s session. However, this discounting of the Yen does seem to have minimised the impact of some downbeat Japanese retail sales data that was released overnight – USD/JPY barely fluctuating as a result – whilst with cable having lost almost 200 points from yesterday’s highs on news of the death of MPC member David Walton, there’s undoubtedly some real scope for at least a partial reversion here. US durable goods orders are the only vaguely significant economic item on the calendar today so expect this reading to come under close scrutiny – any further signs of weakness in the US economy could lead the dollar lower once again but overall expectations seem to be for more churning ahead of the next messages from the Fed.

Wayne Roworth and Enis Mehmet



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