Euro rate hike 2007

I wasn't surprise when i saw this article, FOREX-Buoyant euro scores lifetime high vs yen which indicate that German business sentiment firmed expectations for further euro zone rate hikes. ECB Trichet even testify that rate hike in early 2007. Sounded very strong and positive to me. U.S. Treasuries up slightly. The dollar is down against the euro after yesterday's upbeat survey of German business sentiment firmed expectations for an interest-rate hike from the European Central Bank. Stocks rally on Thai turnaround, euro strong.

On the other side of the globe, Home loan demand slumps as refinancing plunges. Ouch, this is going to hurt the USD. Guess, we won't be seeing USD strengthening any sooner due to the ECB interest rate hike in 2007. It would be pretty interesting to wait for the Blair resignation which is due next year too. If USD do not regain strength during Blair resignation, only miracle could strengthen USD then.

Other interesting news
Sweden's Ericsson AB is buying Redback Networks for $2.1 billion in cash, while steelmaker Arcelor Mittal is acquiring Mexico's Sicartsa for $1.44 billion.

Oil prices are nearing $64 a barrel ahead of data that experts expect to show a fall in U.S. crude stocks after dense fog disrupted imports.