*Last Updated March 2, 2006, 1:11 am

Daily report by CMC Markets

Website: http://www.cmcmarkets.com

Email: info@cmcmarkets.com

FOREX ANALYSIS

Euro rangebound against dollar after sell-off as traders await ECB verdict

March 2nd - The ECB rate decision and accompanying statement is set to remain squarely in focus through today’s session as traders look for and suggestions as to where Eurozone monetary policy will now go in the longer term. A 25 basis point hike at today’s meeting has been fully priced into the market and previous expectations had been that rates would edge towards 3% by the end of 2006, but there’s some concern building that a series of rate hikes may now follow in relatively quick succession. In isolation, yesterday’s data from the Eurozone certainly didn’t seem to suggest that inflationary pressures were going to build to a level where successive rate hikes would prove necessary, although with inflation outstripping interest rates, there’s certainly little incentive for consumers to save. Elsewhere there’s little else around that stands to provide much direction – the dollar regained some lost ground yesterday off better than expected factory orders and the reactive mood amongst traders looks set to continue whilst there’s still debate as to whether or not the Fed will hike rates again later in the month. US weekly jobless claims stand to deliver their own momentum later in the session, but unless we see a surprise from the ECB consolidation may well continue on EUR USD in the short term.

Tim Wilbraham 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.