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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Crimson Ghost who wrote (26976)	4/6/2005 10:17:19 AM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Forex - Major currencies little changed; Yen drops on weak economic outlook [I am sorry but I just do not see everyone's facination with the YEN - Mish] Wednesday, April 6, 2005 12:43:10 PM afxpress.com LONDON (AFX) - Major currencies were little changed in a very thin day for news, with the market awaiting another speech by Federal Reserve chief Alan Greenspan tonight and interest rate decisions in the euro zone and UK tomorrow The dollar dropped overnight after Greenspan's speech on energy late yesterday failed to issue the warning the market had been expecting on the threat to inflation posed by high oil prices. Instead, the Fed chairman maintained that the recent spike in oil prices was likely to be short-lived and that inventories were likely to build again, causing oil futures to drop A dirth of newsflow today has caused most currencies to stabilise at current levels for the time being, however, with investors remaining sidelined ahead of Greenspan's testimony later this afternoon "The dollar is modestly weaker overnight and with data very light today we could see the market trade sideways," said HSBC currency analyst Clyde Wardle Elsewhere, the yen continued to drop on the back of a series of weak Japanese data and concerns over the impact of high oil prices on an economy which is a 100 pct importer of oil There was more bad news earlier today, with Japan's index of leading economic indicators reported at 20.0 for February, below the 50 mark for the fifth time in six months. A reading above 50 indicates economic expansion over the next three to six months, while a reading below 50 suggests contraction "The economy is clearly still struggling in its soft patch and the increasingly weak Japanese fundamentals are weighing on the yen," Wardle said The other major events on the radar screen will be interest rate decisions by the Bank of England and the European Central Bank Both are fully expected to result in rates being left unchanged and the BoE is not expected to issue an accompanying statement. The market will, however, be keeping an eye on ECB president Jean-Claude Trichet's subsequent press conference for his reaction to recent weak euro zone data Late this morning, there was more evidence of the beleagured state of Europe's largest economy, with German manufacturing orders falling 2.6 pct in February from January. This is the second consecutive monthly decline and was well below analysts' expectations for a small rise of 0.2 pct The Australian dollar stabilised meanwhile after sharp falls overnight in the wake of a no-change interest rate decision from the Reserve Bank of Australia, disappointing a market which had broadly expected a quarter point hike