[IMAGE] Forums Discuss these points in the Forums:  Forexnews Forum       Technicals Live Charts Analysis available from: Cornelius Luca   J.P. Chorek   Technical Research Ltd.   Charts & News featuring Standard & Poor's       Interest Rates   US: Japan: Eurozone: UK: Switzerland:   1.75%  0.15%  3.25%  4.0%  1.25-2.25%       [IMAGE] 	 [IMAGE]  Dollar Steady But Market Still Weary About Wall Street  February 20, 7:00 AM: EUR/$..0.8748 $/JPY..133.64 GBP/$..1.4309 $/CHF..1.6918  Dollar Steady But Market Still Weary About Wall Street by Jes Black  At 8:30:00 AM US Jan CPI y/y ex food, energy (exp 2.7%, prev 2.7%) US Jan CPI m/m (exp 0.2%, prev -0.2%) AM US Jan CPI y/y (exp 1.4%, prev 1.6%) US Jan CPI m/m ex food, energy (exp 0.2%, prev 0.1%) US Jan Real Earnings (exp n/f, prev 0.1%)  The dollar was little changed this morning as dealers felt uneasy about a further retreat on Wall Street amid more accounting concerns. EUR/USD bounced between support and resistance at 87.50 and 87.80 and also held onto overnight gains against the yen, which helped propel the single currency higher on Tuesday. JPY remains weak against the dollar as well, after the Bush / Koizumi meeting left dealers feeling Japan would continue to drag its feet on reforms.  Today's data from Europe had little effect on the FX market as dealers looked ahead to Wall Street for direction. Fears a prolonged stock retreat and a liquidity crunch kept investors away from US assets, which hurts the dollar. Investors also ignored the good news that housing starts rose at the fastest pace in two years by climbing 6.3% in January. This is seen as still giving the dollar underlying strength because of the rising home asset prices are also giving consumers more confidence.   Worries about the US equity market will dominate dollar movements as fears that stricter accounting rules might force some companies to revise down past earnings, and push up P/E values which are already high for recovery periods. This could cause more domestic and international fund managers to shy away from US equities and depress the dollar.  Earnings news today will focus on Allied Capital and Allied Irish Banks, and DaimlerChrysler.   Meanwhile, German GDP fell 0.25% in the last quarter of 2001 the Bundesbank reported today. This put Germany in an official recession after Q301 fell by 0.1%. EUR/USD fell to a day's low of 87.47 after the release, but markets had discounted the news and were instead looking ahead to signs of a possible recovery in the later half of this year. Therefore, as with previous euro rallies, yesterday's one-cent surge was seen as more a reflection of dollar and yen weakness than Eurozone strength.  Yesterday's European data had more of an impact after the rise in Eurozone industrial production to 0.8% in December from the previous month's -0.8% suggested a turnaround in the sector was immanent. The German economic institute ZEW also stated that over half of those surveyed anticipate a Germany economic recovery in the next six months, raising the possibility of a rise in next week's release of the German Ifo business climate index, which would be bullish for the euro.  EUR/USD gains were again capped near overnight resistance at 87.80 and yesterday's surge left dealers perplexed over the dominant trend in the pair. Most see this as a further correction from its bear trend since September. But despite falling towards key support at 86.50/60 on Tuesday, the euro rebounded to a high of 87.79 and is favored for the moment given Japan's economic woes and Wall Street's accounting concerns. While some traders expect a pullback towards 87.00, others see the possibility of a run towards 88.00, 88.60 and 88.80.  Sterling fell to day's low against dollar at $1.4290 following the Bank of England's February 7 Monetary Policy Committee meeting minutes. Dealers unwound more of their cable longs as today's comments corroborated yesterday's remarks from BoE Governor George that expectations of a rate hike were overdone. Trade data also showed a record high deficit of 33.6 billion pounds last year as exports struggled in world markets. Against the euro, the pound bounced off of support at 61.30 pence and rose to a day's high of 61.12 pence.  GBP/USD fell to a day's low of 1.4290, after testing resistance again at yesterday's high of 1.4330, which also marks its 200-day moving average. Like the euro, sterling rebounded against the dollar from an overnight one-week low of 1.4228 but is still below Monday's high of 1.4330 and still yet below key resistance around1.4340/50, the 61.8% retracement of the move from 1.4515-1.4040, which is still providing tough resistance. Without a break of that level, the pair remains heavy, dealers say.  Meanwhile, JPY remained weak across the board, troubled by investor disappointment that Japan did not present tangible evidence that it was proceeding with structural reforms.   USD/JPY rose to a day's high of 133.77 but maintained below yesterday's one-week high of 134.01. USD/JPY rose as traders reacted to Japan's inability to tackle key reforms pledges. Markets grew weary with Japanese rhetoric on Tuesday after listening intently last week to a number of assurances to shore up the financial system and tackle deflation. The market was also disappointed by Japan's shying away on the injection of public funds into the troubled banking sector. USD/JPY support is seen at 132.65 and 132.35. Resistance is seen at 133.70, 134.00 and 135.00.  JPY losses are still seen constrained by repatriation flows back to Japan ahead of the March 31 book closing. Precisely because of troubled banks and indebted companies are forced to shore up their books ahead of the fiscal year end. Afterwards, the yen is likely to come back under pressure as Japan begins to tackle deflation and prevent a financial crisis. But how they plan to do this remains unclear.   Today's data from the US is expected to show a rise in January CPI but nothing that should concern the markets over rate hikes coming soon. More important might be weekly chain store sales which are expected to rise 2.1% after a brief fall the week before. This should carry over to the Redbook retail average to show a 0.9% increase in the first two weeks of February.   	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