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Thursday, March 16, 2006

FX Closing Comments

The Dollar continued soft today in the face of rising jobless claims and tame inflation numbers. Today's consumer price data, at .1% for both top-line and core inflation, does not bode well for additional Fed moves, which are predicted to peak near 5% (currently 4.5%). On the other side of the equation, euro-zone inflation was significantly higher than expected, which increases the likelihood of additional higher moves from the ECB. In Britain, their key retail sales data was surprisingly firm, which helped prop-op Sterling and take advantage of this week's stumbling Dollar.