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Wednesday, June 14, 2006

Forex Online Trading June 14 - Another Rate Hike in June

Forex Online Trading June 14 - Another Rate Hike in June seems almost certain after today's stronger than expected Consumer Price Index reports.

Data released earlier on Wednesday showed consumer inflation running at a faster-than-expected pace of 0.4 percent in May, pushed up by a steep increase in energy. Core inflation, which strips out volatile energy and food prices, advanced 0.3 percent in the month and stands 2.4 percent higher year-on-year. Source: Reuters.

The dollar gained a little after the reports but erased all gains immediately after and closed the day at a loss against all majors. The dollar closed at 1.8432 losing 90 pips against the pound, and at 1.2605 against the euro losing 61 pips.

``The foreign-exchange markets focus is now not simply on interest-rate differentials, which have supported the dollar,'' said Masashi Kurabe, senior manager of foreign exchange at Bank of Tokyo-Mitsubishi UFJ Ltd., a unit of the world's biggest lender by assets. ``The markets have already fully factored in a June rate hike, and are beginning to worry about the U.S. economic setback. The dollar looks weak.''

The dollar could fall for a second day before U.S. reports on manufacturing and factory production that will probably intensify concern that interest-rate increases are cutting growth.

That's all. Thanks for reading Forex Online Trading June 14.


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