Forex: Tuesday results.[E]

On Tuesday USD remained in narrow ranges versus main currencies. The
market awaits news: U.S. Trade Balance and BoJ decision.
According to forecasts, trade balance will show deficit widening. It
may bring the US structural problems in market focus and become the
reason of USD sales.
BOJ can finally bring to an end five years zero interest rates on
Friday and bolster yen two weeks pace versus the dollar. However, yesterday
Japan officials hinted, the Bank should not hurry up with rate lift as
it may slowdown the economy growth.
Besides, the prime minister of Japan Junichiro Koizumi said today that
he wants a quick decision on sanctions against North Korea, which fired
seven missiles into the Sea of Japan on July 5.
The report showed, deficit of foreign trade of France reduced in May.
The drop was caused as imported consumer goods proceeding expand moped
up France food stuffs and the equipment export expand.
Despite Britain situation with other countries sharply worsened in May.
According to national statistics department trade deficit with other
countries rose to the most since February. Widening of deficit was
promoted by fuel trade, oil import gained because of decrease in manufacture
and strikes. The pound has sharply decreased after this report, but it
didn't leave a range.

EUR/USD after consolidation in a range $1.2735/45 has sharply decreased
in area $1.2700. Bids became the reason of recoil to $1.2750.
Stabilization in a morning range followed and pair closed trades in a given
area.
GBP/USD after Britain data dropped from $1.8450 to $1.8365. However the
rate couldn't overcome the given support and rebounded to $1.8410. Then
the sterling was stabilized in area $1.8400 then lifted to $1.8444 and
closed trades.
USD/JPY traded in a range Y113.90/114.60. Thus the day closed in a
middle on Y114.26.

Japan is still in focus. If the central bank will raise the rates, it
will support national currency. Base rate of BOJ is 0.1% since 2001. The
yen is strengthening for 2 weeks versus the dollar on speculations on
rates hike in Japan. Growing possibility of rate lift supported yen
during last 4 days when the currency rose 1.3 %.
Citigroup analytics believe the yen will move in a range Y113 - Y115
this week. They also mentioned the Federal Reserve U.S. interest rates
hike by a quarter point to 5.50% in August will be the last for this
year, while the BOJ may lift rates in July and December.