could increase the pressure on the greenback driving the investors'
risk appetite up. These data have released after the closing of Wall
Street and Dow future is trading up currently at 9876.
As we have mentioned in our earlier report, the gold is still taking
advantage from the bright outlook of the Australian dollar after last
week surprising interest rate hike of the RBA by .25% to be 3.25%. The
RBA has backed its decision this week to the materialized improving in
the current economic conditions which are strongly stimulated by the
Chinese growth and demand for the Australian exports which are mainly
the raw materials such as the gold. The ties between the Chinese
economy and the very rich Australian economy of commodities were
working in this direction in the recent decades which could cap it
from the negative impacts of the credit crisis in favor of this strong
Chinese demand. The Aussie has got above .91 today again and the gold
is now trading above 1065 versus the greenback supported from another
side by the current investors' optimism which weakening the greenback
and increasing demand for commodities and energy which can increase
the inflation outlook. By god's will, there can be a rate above 1100
in the next few weeks ahead.
The recent mentioned ECB worries about the single currency strength
in Trichet's press conference after the ECB decision to leave the
interest rate unchanged at 1% could not cap its progress versus the
greenback reaching a new year high at 1.4885 today in the Asian
session. Jean Cluade Trichet has given last week a stronger evaluation
of the current conditions than the previous meeting when he was saying
that Prudence and cautions are of the essence in the present
situation. He has just referred to the need of the current easing
steps of the ECB as there is no realized inflation pressure yet
referring to the new signs of improving in the banking and the
financial sectors as the recent stress banking test said that even if
the economy took another turn for the worse there will be no major
European institutional falling. The market has seen in his talk a
chance to sell the single currency taking some profits but it has
quickly come back up after failing to break 1.4665 supporting level.
The Cable could find the same technical support with the beginning of
this week at 1.573 area and it is now heading to the intermediate
resistance at 1.5945 and in breaking this level the cable should try
for the third time to stand above 1.61 resistance level. The cable has
faced an accumulating pressure recently and a dovish interest rate
outlook which pushed the cable below 1.58 with the beginning of this
week under the pressure of the disappointing releases of UK
manufacturing productions and industrial productions of August .before
getting back with the market weakening the greenback preferring taking
risk.
Best wishes
FX Consultant
Walid Salah El Din
E-Mail: mail@fx-recommends.com
http://www.fx-recommends.com
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