Trichet's remarks failed to give a clear indication of a near term rate hike...
Despite stating that the ECB was "ready to move at any time necessary" on interest rates, Trichet's remarks failed to give a clear indication of a near term rate hike, and the Euro took an immediate hammering as a result.
Alan Greenspan's testimony before the Joint Economic Committee of the US Congress also helped the dollar's bullish tone after he reiterated earlier comments that the US economy remains firm, and that the recent hirricanes will not have a lasting effect.
The non-farm productivity report was the icing on the cake for dollar bulls, showing a gain of 4.1% versus expectations of 2.5%.
Interest rate futures markets are now pricing in three consecutive rate rises for Dec, Jan and Feb, lifting the Fed' funds rate to 4.75%. This will give the US a positive differential against sterling for the first time in several years.
GBP EUR - Support 1.4780 then 1.4740
Resistance 1.4830 then 1.4900
GBP USD - Support 1.7650 then 1.7575
Resistance 1.7725 then 1.7795
DATA:
10:00: EMU Enemployment and Producer Prices (this could provide evidence of inflation)
2:30: US "Employment Situation", which now includes Non-Farm Payrolls. Consensus is +110,000, and unemplyment at 5.1%
Posted at: 09:15
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