Forex Daily Outlook – March 4th 2010
Tension rises in the forex market as the calendar is very busy today. The highlights are rate decisions in Europe and Britain, plus a busy American calendar. Let’s see what’s awaiting us today.
Tension also comes from a possible resolution to the Greek crisis (although fragile), and the hints towards the big event on Friday: Nonfarm Payrolls, which currently have low expectations. So, let’s start review. Take a deep breath:
After a rate hike and a strong GDP result, Australia receives the last major release today: Trade Balance. Australia’s deficit is predicted to squeeze from 2.25 billion to 1.57 billion, showing a stronger economy.
On the other side of the day, AIG Construction Index will probably remain stable. Only a big surprise will shake the Aussie. For more, read the AUD/USD forecast.
British and European rate decisions
In Europe, the revised version of GDP for Q4 is expected to confirm the very slow growth – 0.1%. This figure usually comes out as expected. So, it will merely be a prelude for the rate decision.
The president of the ECB, Jean-Claude Trichet, is expected to leave the interest rate unchanged at 1%. There’s no reason whatsoever for a surprise, but the announcement of the European Minimum Bid Rate always shakes the markets. In recent days, there are hopes for a bailout program for Greece, so this will probably be the focus of the ECB Press Conference that Trichet will hold.
For more on the Euro, check out my EUR/USD forecast, and Casey Stubbs’ latest analysis.
Also the British interest rate is expected to remain unchanged at 0.5%. But BOE governor Mervyn King can hurt sterling in another way. Along with the Official Bank Rate, also the fate of the Quantitative Easing program will be set. This program, also called Asset Purchase Facility, is meant to increase liquidity by buying bonds – spilling pounds. The program ran out of money, but King didn’t rule out renewing it. He isn’t expected to do it, but a surprise sure is possible.
It’s also important to notice the exact wording of the MPC Rate Statement, which may indicate future policy about the interest rate (probably nothing) or the QE program.
For more on the beaten British Pound, read the GBP/USD forecast.
Canadian strength to continue?
In Canada, after the growth rate was better than expected and the wording of the rate statement was OK, two major releases are due today. Building Permits are expected to rise by 1% after a 2.4% jump last time.
The second moving event for the loonie is Ivey PMI, which is predicted to rise from 50.8 to 56 points, recovering from a drop last month.
Towards the end of the day, the Canadian government will release the Annual Budget Release. This will cause lots of volatility for the Canadian dollar. Traders will check out the wording of the economic forecasts that are part of the budget.
USD/CAD made a break below the 1.04 level, and is now range-trading between 1.02 and 1.04. For more on the lonie, read the Canadian dollar forecast.
Busy American calendar
In the US, ADP Non-Farm Payrolls showed a loss of 20K jobs, within expectations. Today we have the last job indicator before the NFP – Unemployment Claims. They’re expected to drop to 472K after jumping to 496K last week.
Pending Home Sales are predicted to rise by 1.4%, following last month’s 1% rise – a continuation of the positive and steady trend. At the same time, Factory Orders are expected to make the same upwards move. Both indicators should push the dollar higher.
Apart from economic indicators, we also have two speeches from FOMC member James Bullard. He had a role in easing the effect of Bernanke’s mini-rate hike.
That’s it for today. Happy forex trading!
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GBP/USD Outlook – March 1-5 2010
The Pound lost another technical level and looks down. The upcoming week is very busy, with eight important events, with the rate decision being the climax. Here’s the weekly outlook for the British events, and an updated technical analysis for GBP/USD.
GBP/USD chart with support and resistance lines marked. Click to enlarge:
BOE governor Mervyn King is [...]
Forex Weekly Outlook – March 1-5 2010
The first week of the month is always busy in forex trading. Apart from Non-Farm Payrolls, we have 3 GDP releases and 4 rate decisions from all over the world, and many other major events. Let’s see what’s awaiting us on the crowded calendar.
The Non-Farm Payrolls will definitely attract more and more attention and cause [...]
Pound Unimpressed From Better GDP
British GDP was revised to the upside, and even better than expected. This hardly helps the Pound, that struggles under a strong resistance line.
According to the second release of British GDP (Gross Domestic Product), the economy grew by 0.3% in the fourth quarter of 2009. This is an upwards revision from the initial release that [...]
Forex Daily Outlook – February 25th 2010
Ben Bernanke will continue to cast his spells over the markets today, and we also have many important economic indicators from all over the world. Let’s see what’s awaiting us in this busy day in forex trading:
Australia’s Private Capital Expenditure provides a strong start for the day. After a drop of 3.9% in the previous [...]
Forex Daily Outlook – February 24th 2010
Ben Bernanke’s testimony will be the centerpiece of today’s events, including releases from many countries. Let’s see what’s awaiting us.
For those of you who haven’t noticed, I have a spot on Forex TV, where I talk about the markets. In these interviews I speak about currencies that I cover in the weekly outlooks, and also [...]
The King Wants and Gets a Weak Pound
Mervyn King continues to dominate the Pound’s agenda, and not in a positive way. His big hints about more QE pound the pound as it makes another attempt to break the support line.
The governor of the Bank of England, Mervyn King, hurt the Pound once again. In his appearance in parliament, the agenda was inflation [...]
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