[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]  USD Quiet Ahead of Key Q4 Productivity Data  February 6, 7:00 AM: EUR/$..0.8675 $/JPY..133.41 GBP/$..1.4148 $/CHF..1.6955  USD Quiet Ahead of Key Q4 Productivity Data by Jes Black  At 8:30:00 AM US Q4 Unit Labor costs prel (exp 2.2%, prev 2.3%) US Q4 Productivity prel (exp 2.9%, prev 1.5%)  There was little action in the foreign exchange market on Wednesday ahead of today's key US productivity data for the fourth quarter due at 8:30 AM. Consensus forecasts have been revised higher this week as confidence in the US  productivity miracle  grew. The currenct estimate is for Q4 productivity to rise 2.9% from the 1.5% gain in Q3 of last year.  That is close to the average annual rate of 3.07% per annum from 1995-2002 estimated by White House economists in the Bush administration's first annual Economic Report of the President, released on Wednesday.  The productivity figure is key to the dollar because its strong performance against other currencies is a reflection of higher productivity growth than other industrialized nations. This also explains why the US is a net beneficiary of capital flows as investors believe that productivity growth in the US will be a better investment.  The dollar was little changed against the euro from its US close after a sharp rebound on Tuesday allowed it to recover most of this week's losses. The euro held onto half of Monday's gains after a large rise against the yen helped it back above the psychological 87-cent mark. However, that brief rally soon ran out of steam and EUR/USD is now trading in a range of 86.50 to 86.80.  Failure to regain resistance at 86.80 is seen calling upon support at 86.35 and 86.00, before another attempt at 86.60. Resistance is seen at 87.10, which marks the 38.2% retracement of the .8953-.8560 move. A rise above that level would target the key 87.50 mark and a breach of this level would be bullish for the EUR/USD. However, only a move above past resistance at 88.60 would really damage the bear trend.  The euro was unchanged by data showing unemployment in Germany rose sharply in January, sending the jobless total above 4m. The seasonally unadjusted number of unemployed soared to 4.29m from 3.96m in December, carrying the unemployment rate to 10.4% from 9.6%. German Labor office's Jagoda says economic weakness continues to impact on labor market and as long as weakness persists he cannot rule out a marginal rise in unemployment next month as well. The data is likely to give Chancellor Gerhard Schroder's centre-left government trouble as it is restrained from doing much due to the fiscal restraints of the Masstricht treaty.  Meanwhile, all eyes are on this week's central bank meetings from the Eurozone, UK and Japan. Both the ECB and BoE are expected to hold rates unchanged, but given the resurging pessimism surrounding the Japanese economy, there is a chance the Bank of Japan will take additional easing steps to stop the deflationary trend that menaces the economy.  In order to curb the sharp rise in Japanese Government Bonds, the Bank of Japan might surprise markets and increase the outright purchases of JGBs at Friday's policy meeting. Currently they purchase 800 billion worth of JGBs per month and may decide to increase this by 10-25% to around 1 trillion in an effort to increase liquidity and stabilize bond yields. The move would likely weaken the yen.  However, the yen has found support from Japan's top financial diplomat, Kuroda, who said that rapid foreign exchange movements are undesirable and that he saw no risk of further yen weakness, thereby hinting to dealers that Japan was comfortable with a range of 130-135, for now.  USD/JPY broke below support at 133.60 after failing to break 134.20 earlier. The pair fell to a session low of 133.38. Support is seen at 132.80 and this week's low of 131.90. Resistance is seen at 134.40 and 135.20.  GBP/USD fell to a day's low of 1.4125, near yesterday's support at 1.4115 after peaking at a 1-week high of 1.4247 in European trade on Tuesday. A break below 1.4110 would call upon key support at 1.4180, which marks the 38.2% retracement of the 1.4418-1.4038 move. Follow up support is seen at last week's 6-month lows of 1.4045. Upside capped at 1.4235, 1.4270 and 1.4300.  Sterling was supported by data showing the average value of a UK house has risen above 100,000 GBP for the first time following another strong price increase in January. The rise in home prices is likely to be a boost to consumer confidence and spending in the UK.  The dollar will continue to follow moves on Wall Street after another down day on Tuesday highlighted investors' concerns as the mood again turned to cautious for the US. With the economic rebound already priced into the dollar at last week's highs, Monday's US equity sell-off was all it took to bring about a strong correction in USD from its recent six-month highs against the euro and three-year highs against the yen.  Today's earnings reports will focus on such key companies as Anheuser-Busch, Cisco Systems, Metro-Goldwyn-Mayer, and Pepsico.  	[IMAGE] Audio Mkt. 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