Forex Daily Outlook – February 5th 2010

The busy week comes to a climax with the monthly circus around the Non-Farm Payrolls. A gain in jobs is expected in this major release. And there’s more on the menu. Let’s see what’s awaiting us:

Australia left the interest rate unchanged at 3.75%, disappointing the markets. The RBA Monetary Policy Statement will give a further explanation to this decision at the start of the day.

Japanese Leading Indicators will give a general glimpse of the economy. The Yen is enjoying some risk aversive trading.

Britain’s PPI Input is predicted to rise by 0.7%, after a small rise of 0.1% last month. A bigger rise will force policymakers to rethink their policy. The accompanying figure, PPI Output, is predicted to rise by 0.3%.

For more on GBP/USD, which is heading down, read the British Pound forecast.

In the Eurozone, also suffering from trouble, German Industrial Production are predicted to rise by 0.6%, but it might be lower after yesterday’s German factory orders were disappointing. Check out the technical levels at the EUR/USD forecast.

Moving across the Atlantic, Canadian employment figures are expected to be OK: a rise of 15,200 jobs and an unchanged Unemployment Rate of 8.5%. Canada had a few months of strong movements in jobs, but it seems to stabilize now. Currently, the Canadian dollar is doing well against its American counterpart.

For more on USD/CAD, read the Canadian dollar forecast. 90 minutes later, the big event is due.

Non-Farm Payrolls are expected to show job gains. For the first time in over two years, the initial fresh read of NFP is predicted to be positive. November saw a rise in jobs, but this positive number was only seen in the revised version. Last month saw a disappointing drop in jobs. Yesterday’s weekly Employment Claims disappointed with a rise in claims, but the ADP NFP was better than expected.

In addition to these regular numbers, we have a revision of figures from April 2008 to March 2009 this time. According to this report, a big downwards revision is predicted. Although this will be negative, the market focuses on fresh data, and I believe that we won’t see a big impact.

The American unemployment rate isn’t expected to move from 10%. If the figure return to a single digit, this will sure help the dollar.

For more, read my Non-Farm Payrolls preview.

That’s it for the day and the week. Happy forex trading!