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FX Trend Trader -The Day ahead

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16 May 2008 @ 02:10 am EST
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Friday 16th May

Further weak economic data yesterday out of the US has again raised concerns over US growth prospects whilst Euro Zone data (strong Q1 growth in Germany and France) boosted the Euro. ECB Trichet has warned that the surprisingly good growth levels will not last but fellow policy makers said that this did not mean the ECB would relax its guard on inflation. Thursday's US data showed factory activity in the mid Atlantic region shrinking for the sixth straight month in May whilst manufacturing in New York state also declined .

So major currencies are likely to continue to be confined to narrow trading ranges as traders/investors remain unsure about what to focus on and decide to adjust positions back to a neutral stance. Overnight the Aussie and Kiwi have rallied well as firmer stock markets trigger a move back in to the risky 'carry trades'.

Not easy out there so be disciplined!

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