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Daily Forex Outlook

 
3 June 2006

By Easy-Forex – The Dollar continued its volatile trading in the overnight session strengthening against the major currencies before falling again after weaker than expected ISM manufacturing numbers… … were released.

The ISM index fell more than expected in May to 54.4 from 57.3 in April, which was below expectation of 55.6. Movement in the dollar was made further erratic by comments from the ECB stating that global imbalances may place significant downward pressure on the US dollar. In other markets, the Dow Jones index rose by 92pts and the NASDAQ rose by 41pts. Crude oil prices fell by US95c to US$70.34 a barrel, ahead of the OPEC meeting in Venezuela where the cartel was expected to leave production at full capacity. Looking ahead, Non-Farm Payrolls/Manufacturing, and unemployment figures are due out today.

The Euro traded in a range of 1.2725 to 1.2823, before closing at 1.2803 in the New York session. On the data front, the PMI manufacturing index increased to 57.0 from 56.7. GDP growth was left unrevised for the March quarter and unemployment for the Eurozone was revised down to 8.0% from 8.1% for the month of March. Looking ahead, PPI is due out today.

The Japanese yen traded in a range of 112.40 to 113.36 versus the dollar, before closing at 112.70 in the New York session.
The Sterling traded in a range of 1.8569 to 1.8711, before closing at 1.8661 in the New York session. On the data front, the UK PMI dropped to 53.2 from a revised 54.0 in April.

The Aussie traded in a range of 0.7465 to 0.7490, before closing near its lows in the New York session.

Gold fell by US$15.50 to US$633.50 an ounce. Weakness was seen across all the base metals markets with a weaker than expected factory survey from the ISM, and expectation of a possible rate hike this month by the Federal Reserve.

By Easy-Forex

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