Forex Daily Outlook – January 8th 2010

Tension comes to a climax today with the Non-Farm Payrolls. Are we finally going to witness a rise in jobs? It’s not the only event for today. Let’s review the events:

Japan’s Leading Indicators are predicted to rise once again. Swiss Unemployment Rate is expected to tick up to 4.2% after a similar rise to 4.1% last month.

EUR/USD is still in a range. German and French Trade Balance reports start the events in Europe. Later, more important figures are released: the All-European Unemployment Rate is predicted to edge up to 9.9%. A rise to 10% will hurt the Euro, as this psychological level will be echoed strongly in the media.

Later, German Industrial Production is predicted to turn positive and rise by 1.1%, following a disappointing drop of 1.8% last month. German Factory Orders disappointed yesterday.

Third quarter GDP is expected to be confirmed at a 0.4% growth rate.  For more on the Euro/Dollar, read the EUR/USD forecast.

In Britain, PPI Input is expected to drop by 0.2%. PPI Output is predicted to rise by 0.2%. The Pound shrugged off yesterday’s rate decision, that turned into a non-event. GBP/USD is trading lower this week, but didn’t breach the most important barriers. Not yet.

Read more about cable in the British Pound forecast.

Moving to the other side of the Atlantic, Canadian employment figures are expected to be good, though not as strong as last month’s superb numbers. Canadian Employment Change is predicted to rise by 20,000 jobs. The Unemployment Rate is expected to remain unchanged at 8.5%.

For a technical look into USD/CAD, read the Canadian dollar forecast.

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Non-Farm Payrolls are expected to drop by 3,000 jobs. This small number is the latest official prediction. Some economists expect to see growth in jobs, for the first time in two years. A positive number will boost the dollar. A negative number will send the dollar bulls downhill.

The accompanying figure, Unemployment Rate, is expected to edge back up to 10.1%. After dropping to 10% last month, it could also drop below 10%. After the rise above 10% was worrying two months ago, a drop to a single digit figure will also boost the dollar.

Also note the Average Hourly Earnings which are expected to drop by 0.2% after a rise of 0.3% last month. Later, the new FOMC member, Eric Rosengren will make a public appearance. When the markets are about to close, American Consumer Credit is released. All these events will be overshadowed by the NFP.

That’s it for today. Happy forex trading!

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