Main influence on Forex market during october 2006 and on forex strategy will come from interest rates policy.

Forex forecast and most expected story:

US Federal Reserve Board most probably will not change interest rates until end of the year and more likely even reduce interest rates in the beginning of the next year. Will it help Euro against US dollar?

European Central Bank and Bank of England expected to rise interest rates for national currencies. But it could be slow down by latest reports about Inflation rates in the Eurozone and UK. Also latest data from Germany about Consumer Confidence index will act as a buffer for future increasing of interest rates in the UK and Europe.

All latest factors could lead us to conclusion for short term buying opportunity for US dollar against Euro and British pound. If central banks will not act on foreign currency market we can prognose for a pair Euro/US dollar even as low as 1.245.

If short term prognosis will fall lower than 1.245 it could lead to further gains for US dollar.