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Daily Forex Commentary

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FX without a clear winner

Mon, Nov 20 2006, 08:35 GMT
by Rikke Ledager

Jyske Bank  |  View company's profile


Today’s comment

This week starts up rather mixed with the USD weaker against EUR but gaining a bit against the JPY. The weekend’s G20 statement contained nothing new - only talking about the benefits of flexibility instead of calling on immediately action on FX. Many had hoped for a specific reference to China regarding flexibility.


On the G10 meeting running parallel with the G20, Trichet signalled confidence in global economic outlook but stated that inflation can be a threat to growth and he once again called for vigilance on inflation and said that ECB interest rate may be raised to 3.5% in December.


The Japanese vice Finance Minister, Watanabe, stated that they have no reason on the domestic side to further the JPY’s depreciation. “But exchange rate isn’t decided by one country alone.” BoJ’s Fukui seized the opportunity to play down the chance of a December hike and said that the G20 statement on “the normalisation of monetary policy underway in many G20 countries will need to continue," did not refer directly to Japan.


The JPY took a knock when a central banker from UAE said that they had no intentions to diversify their FX reserves into JPY.

Today’s market

The US leading indicators from October published this afternoon is one of the only numbers coming out of the US this week. Watch comments from Feds Fisher and ECB’s Liebscher on German economy. The final communiqué from the G20 will be released later today and may be interesting reading after all.

This week’s scenario

This week’s looks rather soft regarding key figures out of the US and they will be able to take a needed rest following the rather weak data lately and enjoy Thanksgiving.


A quick glance at the calendar shows that BoJ releases Minutes from their meeting in October on Tuesday whereas BoE releases Minutes from their meeting in November this Wednesday. From the EU we have Ifo out of Germany on Thursday and during the week CPI from the German Federal States will be published.

Published on  Mon, Nov 20 2006, 08:40 GMT


Jyske Bank | Vestergade 8-16, DK-8600 Silkeborg
http://www.jyskebank.com | jyskebank@jyskebank.dk

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The analysis is based on information which Jyske Bank finds reliable, but Jyske Bank does not assume any responsibility for the correctness of the material nor for transactions made on the basis of the information or the estimates of the analysis. The estimates and recommendations of the analysis may be changed without notice. The analysis is for the personal use of Jyske Bank's customers and may not be copied.
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