Last week Trichet's comments that the inflation upside risk is still
existing indicating that the ECB is still looking for a chance to
tight further and also his tries to downplay the sub-prime mortgage
risk impact on the European solid growth in his press conference after
the ECB decision to keep rate unchanged recently could contain the
market sentiment specially after the Fed's surprising .5% cut
underpinning the EURO to keep recording new all times high versus the
greenback.
The Fed has shown growing worries about the US growth pace, credit
market and stock market after the crisis and the recent negative non-
farm payroll data of last month. Also this month inflation data came a
bit lower than expected cooling the fear of inflation for a while on
the decline of gasoline prices.
By God's Will, the current oil rates above 80$ per a barrel can not
be ignored and its potential upside risk on inflation which can
underpin the gold ability to be above 700 and may be 800 by the end of
this year on the weaker Fed's ability stance to tackle inflation
indicating a new step to the stagflation awaited case in US. So, the
commodities currencies can find higher places versus the greenback
this year especially the Canadian dollar which is expected to surpass
the US one this week and also the single currency on the current
interest rate outlook till a change of this current market sentiment
or a clear sign that Europe growth pace will follow the US one
dramatically.
Best wishes
FX Consultant
Walid Salah El Din
Mob: +20 12 465 9143
E-Mail: mail@[EMAIL PROTECTED]
