4/1/2010 - The current market sentiment

[fxreco...@gmail.com]

The greenback could begin the week strongly but it has come under
pressure again with the market risk appetite rising weighing on the
low yielding currencies such as The greenback and the Japanese yen
which carries the investors' risks as the interest rate outlook of the
greenback has improved with the last year ending while the market is
waiting to have further rising of the ISM Manufacturing index of
December from US today after the strong rising of Chicago December PMI
to 60 which was waiting to be just 55.

By god's will, it looks that this new year should have changes of the
central banks current monetary easing policies after reaching these
current massive low interest rate levels with the credit crisis impact
on the economy in the recent 2 years which can make changes in the
currencies market by exchanging the lead of tightening between them.
We have seen the unexpected labor data of November which have shown
falling of the unemployment rate to 10% from 10.2% in October and
losing of just 11k in US out of the farming sector and by the end of
this week the market is focusing on the report of December to have a
confirm of this improvement to add to the current growing speculations
of a near coming tightening action in US as it is widely concluded
that the Fed's governors will not change of their current quantitive
easing policy without a crucial change in the labor market.

The British pound could get above 1.62 in very volatile market
conditions in thin trading sessions by the year end after failing to
break 1.58 and it is now still trying to break above 1.625 supported
by UK December PMI which rose to 54.1 from 51.8 in November while the
market was just waiting for 52. The cable has been hit recently by the
surprising falling of November UK retail sales by 0.3% monthly which
was opposing the market waiting for rising by .6% and yearly by 3.7%
but they have risen yearly by just 3.1% which pushed it down breaking
its major support versus the greenback at 1.61 before finding footing
above 1.58 getting use of the current market optimism and the market
believing in UK governmental promises of a close recovery this year as
UK economy was the only economy in recession in the western Europe in
the third quarter of last year.

Best wishes

FX Consultant
Walid Salah El Din
E-Mail: ma...@fx-recommends.com
http://www.fx-recommends.com