*Last Updated June 30, 2006, 1:05 am

Daily report by CMC Markets

Website: http://www.cmcmarkets.com

Email: info@cmcmarkets.com

FOREX ANALYSIS

Dollar under sustained pressure after FOMC looks dovish in H2 2006.

June 30th - There’s one theme dominating currency markets right now and that’s still last night’s FOMC rate verdict. The marginal speculation that we might see 50 basis points added came to nothing but it would be difficult to say that the fact the Fed only added 25 points to rates is the reason why the dollar has come under so much pressure over the last 12hrs or so. More attention is being put on the fact that the tone of the accompanying comments last night was undoubtedly dovish and the cycle of rate hikes does seem to be nearing an end. As these comments are digested further through the day some stability should start to emerge but with the onus being that further rate adjustments are “data dependent”, expect readings starting with this afternoon’s Michigan consumer sentiment data to come under some intense scrutiny. Japanese numbers released overnight were undoubtedly mixed – construction orders down and housing starts up - but once again this hasn’t detracted from the Yen’s rally against the dollar. Eurozone business sentiment data due ahead of the US market open will also be watched – as always after a run of strong gains traders will be looking for opportunities to start booking profits. Any weakness here could initiate a small reversion but the dollar’s recent grind higher may now be coming to an end…

Wayne Roworth and Enis Mehmet



Phone USA: + 1 212 644 4220
Phone UK: + 44 207 170 8201
Fax USA: +1 212 644 4222
Website: http://www.cmcmarkets.com

Disclaimer: Although obtained from sources believed by us to be reliable, CMC Markets and its affiliates cannot guarantee the accuracy or completeness of the information upon which this commentary is based. This commentary does not purport to disclose the risks or benefits or entering into particular transactions and should not be construed as advice in any specific instance. The views in this report constitute our judgement as of this date and are subject to change without notice.



Fx-charts.com Disclaimer: The information contained on this website is subject to change without notice, views and opinions expressed on fx-charts.com may be those of individual authors and may not necessarily be the views of fx-charts.com or its officers and employees, we make no claim to the accuracy or timeliness of any information contained herein. We recommend obtaining advice from a suitably qualified financial advisor before entering into any financial transactions or agreements. The use of this website constitutes acceptance of our privacy policy, disclaimer and terms of use. This website is available for information and educational purposes only.