Very busy day ahead: rate decisions in Britain and Europe are the highlights in a crowded calendar, one day before the Non-Farm Payrolls.
Things are shaky in the forex market. The dollar weakened during the week but then erased the losses after the ADP Non-Farm Payrolls was good. The major pair, EUR/USD is currently holding steady. Read Casey Stubbs’ latest analysis for this pair.
Australia starts the day with two major releases: Retail Sales are predicted to rise by 0.3%, much less than last month’s rise. Building Permits are predicted to drop after making a sharp rise last time.
The Australian dollar is still struggling after the disappointing rate decision, which left the cash rate unchanged and the Aussie lower. Carry trades are not fashionable now…
For more on the Aussie, read the AUD/USD forecast.
In Switzerland, Trade Balance shows a surplus, and will probably continue to do so. It’s predicted to rise to 2.33 billion, helping the Swissy.
In Britain, the Halifax HPI is an important indicator for the Pound, even though it’s released close to the rate decision. House prices are predicted to rise by 0.9%, similar to last month’s rise.
Mervyn King will probably finish the Quantitative Easing program, and not spill any more pounds on the markets. The Asset Purchase Facility is running out of the 200 billion pounds allocated to it, and probably won’t be renewed. Interest rate hike? No news is expected soon. The Official Bank Rate will probably remain unchanged at 0.5%.
We might get hints for future moves in the MPC Rate Statement. Employment and prices are better in Britain, so maybe there’s some rate hike far in the horizon. For more on GBP/USD, including technical levels, check out the British Pound forecast.
Also the Euro will receive a rate hike. Jean-Claude Trichet, president of the ECB, isn’t expected to move the European Minimum Bid Rate from 1%. There’s too much trouble in Europe, especially on the eastern front – Greece. In the accompanying ECB Press Conference, the focus will be on the resolution of this crisis.
Before the rate decision, German Factory Orders are released, and are expected to show a smaller rise than last month – only 0.2%.
For more on the Euro, read the EUR/USD forecast.
American Unemployment Claims are the last hint before the Non-Farm Payrolls, after the ADP NFP made a nice surprise. Jobless claims are expected to rise to 470K, not a big change from last week.
Factory Orders are predicted to rise by 0.7%, also similar to last month. Also note the quarterly Prelim Nonfarm Productivity (a rise is expected) and the Prelim Unit Labor Costs which is expected to drop once again.
Later in the day, Thomas Hoenig, a known “hawk will make a public appearance. He’s mentioned as a possible heir to Timothy Geithner’s seat as Treasury Secretary.
In Canada, Building Permits are expected to rise by 2.7% after a drop last month. This will shake the loonie before tomorrow’s employment figures. Another important figure in Canada is the Ivey PMI, an important gauge of the economy that fell below 50 points last month, and is now expected to rise back above it. Mark Carney, head of the BOC will be speaking, and might also move USD/CAD.
Check out the Canadian dollar forecast for more.
That’s it for today. Happy forex trading!
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