Thursday, December 07, 2006

ECB Rate hike expected.

The ECB is unamimously expected to raise rates today to 3.5% from 3.25%. The move has been well flagged by the ECB Governing council and as a result the market should focus on Trichet's comments afterward. These I would expect to be on the hawkish side leaving the door open for further rate raises throughout 2007. This widening interest rate differential between the States and Europe will further pressure the dollar in the coming months. The Euro is little changed overnight as the market waits on the announcements.

FXTRADINGIDEAS@AOL.COM

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