*Last Updated May 4, 2006, 1:20 am

Daily report by CMC Markets

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FOREX ANALYSIS

ECB, BoE rate verdicts in focus, non-farm payrolls to keep momentum going until weekend break

May 4th - It may well be that it’s still all about the rates but with both the ECB and BoE scheduled to release their latest verdicts today, expectations are finally coming into line that both central banks will again leave monetary policy unchanged this time around. There’s going to be little else to provide insight as to what the Bank of England is thinking until we see the meeting minutes released in two weeks time – rising house prices and a pick up in industrial output may make a cut in the latter part of the year less likely - but volatility can be expected to follow the Eurozone announcement on the back of the regular press conference. The next ECB meeting takes place in Madrid at the start of June and assuming we see no move today, it’s really going to take some strong words from Trichet to convince the market not to fully price in the 25 point hike at that time. Ahead of this news we’ve seen the dollar generally consolidate recent gains and although there’s the weekly jobless claims reading due later in the session, it may well be tomorrow’s non-farm payrolls that really stands to deliver the most direction for the greenback in the short term.

Stuart Scrase and Enis Mehmet



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