Forex Daily Outlook – March 18th 2009

Big day today in Forex: Both Japan and the US announce new interest rates, which aren’t expected to change. The statements from both central banks will be interesting to watch. There are lots more major economic indicators. Let’s review them.

Japan starts the day with the aforementioned new  Overnight Call Rate. This will accompanied by an official written  Monetary Policy Statement, and afterwards a live Press Conference by the BOJ. It’ll be interesting to see if the BOJ will anounce new measures to stimulate the stagnating economy. Do I hear Quantitative Easing?

In the morning, Retail Sales will be published in Switzerland. They are expected to fall by 0.6%.  

In Britain, there are two major releases:  Claimant Count Change is expected to stand at 84.5K, and this will give a good indication about the British job market. At the same time, the BoE will release the  MPC Meeting Minutes from the decision that cut rates to another historic low. It’s interesting to see what they were thinking, and where they see the British economy.

Also in Britain, the  Average Earnings Index will be of interest, and so will the  Unemployment Rate (late figure) which is expected to rise from 6.3% to 6.5%.

In the US, CPI takes the focus before the Fed announcement. CPI is expected to rise slightly by 0.1%, and the Core CPI by 0.3%. Also the Current Account will be published in America, expected to show a deficit of 137 billion, less than 174 billion last time.

And at 18:15 GMT, the highlight of the week is here: Ben Bernanke will issue a new  Federal Funds Rate and will publish the FOMX Statement. Since the rate is going to remain unchanged (maximum 0.25%), the FOMC Statement will get attention. Is the the Federal Reserve about to buy more treasuries? How about Britain’s move to Quantitative Easing? The text and the tone of the statement will set the course for the dollar in the next few days.

That’s it for today. Happy Forex Trading!