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Forex Daily Analysis – Januray 20th 2009

Today is a historic day in the USA: Barack Obama, the first black president, will be inaugurated as the president.

I’ve already written about how Obama’s inauguration is affecting Forex trading. It seems that wheels are already in motion: the USD strengthens against most of the currencies. EUR/USD fell below 1.30, to 1.2967. GBP/USD broke a major resistance line, and is now at 1.3952. USD/CHF also broke upwards, and is now at 1.1403.  

Only the Japanese Yen is strong against the dollar, and USD/JPY is now trading now at 90.34. In Japan, the monthly  Tertiary Industry Activity  fell by 0.9%, within expectations, though the  Household Confidence was weaker than predictions, at 26.2.

In Britain, a better than expected yearly CPI, at 3.1% didn’t help the pound recover from a big fall. It could be due to the Core CPI data, that was only 1.1%, less than 1.4% that was predicted.

In Europe, better than expected data didn’t help the European common currency.  German ZEW Economic Sentiment fell by only 31 points, less than a drop of 43.5 that was expected. The European figure from ZEW was  also relatively good, at -30.8.

In the country north of Obama, Canada, there is major news coming later on: the BOC will call a new  Overnight Rate, and will also issue a Rate Statement. Interest rate in Canada is expected to drop by 0.5%, to 1%. This is due at 14:00 GMT, and will shake the USD/CAD, which has also been pushed by Obama optimism: the greenback went up, and the loonie is now at 1.2643.

An important speech is expected from Mervyn King towards the end of the day. He will probably elaborate on the British bailout plan.

For those of you trading on the kiwi, watch out for the monthly  Core Retail Sales and  Retail Sales in New Zealand. NZD/USD is now at 0.5283. Also NZD has fallen against the dollar.

So, Obama’s inauguration send the dollar up on this special day. His speech, will also impact the markets.

Happy Forex Trading!

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.