Forex Daily Outlook – July 13 2010

American and Canadian Trade Balance followed by German ZEW Economic Sentiment and UK’s CPI highlight today’s activities. Here is an outlook on the events at hand.

In the US, The trade deficit in the U.S. widened in April to $40.3 billion the highest in more than a year as exports and imports both declined. A drop to 39.4B is expected now.

More in the US, Federal Budget Balance expected to decrease deficit by 54.3B to -81.6B due to massive policy measures undertaken.

Finally in the US, IBD/TIPP Economic Optimism index predicted to rise to 47.9 points after an unexpected 46.2 point drop in May.

In Canada, Trade surplus expected to continue its growth to 0.4B from 0.2B in May.

For more on USD/CAD, read the  Canadian dollar forecast.

In Europe, German ZEW Economic Sentiment Index could provide further evidence of an economic slowdown in the largest economy in the Euro-zone with a reading of 25.2 compared with 28.7 in the previous month. The ZEW index is poorly correlated to economic growth but is often seen as an important indicator of turning points in market sentiment.

More in Europe, French CPI expected to remain 0.1% and German Wholesale Price Index predicted to rise to 0.4% from 0.3% in May.

For more on the Euro, read the  EUR/USD forecast and Casey Stubbs’  latest analysis.

In Great Britain, Consumer Price Index, Inflation is expected to pull back to 3.2% y/y from 3.4% y/y in May, but still stubbornly remaining above the Bank of England’s 3.0% ceiling as well as Core CPI expected to drop to 2.7% from 2.9% in May.

More in Great Britain, Dr Andrew Sentance an external member of the monetary policy committee of the bank of England  speaks at the Thames Valley Chamber of Commerce, in Reading. His comments may determine a short-term positive or negative trend.

Later in Great Britain, Nationwide’s consumer confidence index fell to 65 points in May, the lowest reading since June last year, from an upwardly revised reading of 75 in April. A further drop to 64 points is expected now.

Finally in Great Britain, Department for Communities and Local Government House Price Index  measuring change in the selling price of homes expected to rise to 10.3% – 0.2% more than in May. Retail Price Index predicted to drop to 4.9% from 5.1% and CB Leading Index is likely to remain 0.6%.

Read more about the Pound in the  GBP/USD forecast.

In Switzerland, producer price index, which measures the change in price of goods and raw materials purchased by manufacturers, rose 0.3% during May despite economists’ expectations for a flat index. A small drop to 0.2% is expected now.

Australia’s NAB business confidence survey fell to a reading of 5 in May from 13 in April, with the decline attributed to global financial market instability and sharp declines in the AUD and equity prices.   A further drop is expected now.

For more on the Aussie, read the  AUD/USD forecast.

In New Zealand, Retail Sales,  Following a three month disappointment, a Rise of 0.6% is now foreseen and Retail sales also predicted to gain 0.6% after 0.2% dip in the previous month.

In Japan, Revised Industrial Production a leading indicator of economic health expected to remain -0.1%. Household Confidence predicted to drop to 42.4 points, 0.4 points less than in the previous month.

That’s it for today. Happy forex trading!

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