By God's will, after 1.25%fed's cut in less than 2 weeks the market eye should turn to Trichet's press conference tomorrow. The ECB member Mersch's comments recently have shown that there were just 2 options discussed in the last meeting which were the hike or the keeping but now, there is a growing probability of cutting following the fed on slowing growth signs and stock markets weakness which can cause a single currency depreciation by the meeting as it was not discounted yet this degree.
As The UK
the Japanese yen can keep gaining from this current interest rate outlook differential tightening, the mistrust in the stock market amid the current crediting problems sentiment and the increased expectations of a US recession which can spread out especially, If the US growth could not get uses of the easing package of 150 Bln Bush's plan and the fed monetary easing.
From the other side the Japanese yen could
find some difficulties of appreciation, if the BOJ repeated that there is a need for further flexibility as this opens the door for a probability of an interest rate cut back again to .25%. The market has translated the comments into yen weakness at the beginning of this week pushing it above 107 versus the greenback.
Best wishes
FX Consultant
Walid Salah El Din
Mob: +20 12 465 9143
E-Mail: mail@...
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