Elliott Wave International

2006-07-06

If last week's main event was the Fed's decision to raise U.S. interest rates for the 17th consecutive time, this weeks "main attraction" has to be the meeting by the Fed's counterpart, the European Central Bank, about the same issue. Well, the ECB did meet today -- and left the rates unchanged.

OK, let's do some basic fundamental analysis now. The Fed raised the U.S. rates to 5.25% last week. The ECB kept theirs at 2.75% today. The U.S. rates remain almost twice as high as in Europe, giving the USD a clear interest rate advantage. You would think that in this situation, the USD would soar, right? Nope... Read on.

http://www.elliottwave.com/features/default.aspx?cat=fex&aid=2490&time=pm

Hit Counter