Forex Daily Outlook – January 4th 2010

The first trading day of 2010 begins with a rather busy calendar. American ISM Manufacturing PMI will stand out today as well as echoes from Ben Bernanke’s speech late on Sunday. Let’s see what’s up for today.

Ben Bernanke said that low rates aren’t to blame for the house bubble – bad regulation and bad execution of regulation are to blame. Looking to the future, Bernanke mentioned that if regulations won’t stop bubbles, the central bank will step in with the rate tool. Is this a hint for rate hikes?

Moving into Monday, Australia’s AIG Manufacturing Index provides an early indicator for the Aussie. This will be followed by a more important figure: Commodity Prices, which are expected to show a lower year-over-year drop.

For more on the Aussie, check out the AUD USD forecast.

In Switzerland, the SVME PMI is expected to edge up to 57.1 pushing USD/CHF lower.

In Europe, Final Manufacturing PMI is expected to confirm the read at 51.6 points. Sentix Investor  Confidence is predicted to edge up, but still remain in the negative zone. The EUR/USD forecast has more, including a technical analysis for this pair.

In Britain,  Manufacturing PMI is expected to tick up from 51.8 to 52.1 points. British Net Lending to Individuals is expected to double to 0.6 billion.

Also in Britain, Mortgage Approvals are expected to remain almost unchanged, ticking up to 58,000 this time. For more on the Pound, read the GBP USD forecast.

In the US, the ISM Manufacturing PMI is expected to rise by 53.6 to 54.1 points, something that will put a smile on dollar bulls’ faces. This index has been above the 50 point mark, meaning economic expansion, for the past 4 months.

Also in the US, Construction Spending is expected to drop by 0.4% and a speech from FOMC member Elizabeth Duke could also move the markets.

That’s it for today. Happy forex trading!

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