Forex Daily Outlook – March 5th 2009
Daily Look

Forex Daily Outlook – March 5th 2009

Very big day today at the forex market. Rate decisions in Europe and Britain will dominate the scene. Big swings can also be caused by US Unemployment Claims, and some serious releases from both Australai and Canada. Let’s see what’s in there…

Already at 00:30, news come from the land down under:  Australian  Building Approvals are expected to rise by 1.4%. After the disappointing GDP, this figure could also be lower. At the same, at the same place, Trade Balance will be released: it’s expected to rise to a surplus of 1.1B.

In Europe, there’s a notable figure before the interest rate call: German Retails Sales, which are expected to slightly rise by 0.3%.

Also in Britain, there’s a serious warm up – monthly  Halifax HPI is predicted to fall by 2.3%, after a rise of 1.9% last time.

At 12:00 GMT the big cannons enter the British scene: BoE is expected to lower the rate to 0.5%. Cutting the  Official Bank Rate by half is widely expected. There will be an accompanying  MPC Rate Statement.

Just 45 minutes later, Trichet will be in the focus with an expected cut of 0.5% percent in the European  Minimum Bid Rate. The ECB will later hold a press conference. Given the high unemployment rate in Europe plus the relatively high interest rate, a bigger cut is also possible.

While traders will still be digesting the news from Europe, Unemployment Claims will be released in the US. After last week’s shock of 667K, the number of jobless claims is expected to fall back to 647K. This still is a high rate though.

In the shadow of all these events, there’s news from Canada as well.  Building Permits are expected to fall by 5%, worse than last month. Later in Canada, Ivey PMI is expected to rise to 37.5, but still in the negative territory.

Note that more US figures will be published later:  Revised Nonfarm Productivity,  Revised Unit Labor Costs and  Factory Orders which are predicted to shrink, this time “only” 3.5%, contrary to last month’s -3.9%.

Speeches are due in the late afternoon by  US Treasury Secretary Timothy Geithner and by  Federal Reserve Bank of Atlanta President Dennis Lockhart.

That’s it. I stick to my statement that breakouts in both the EUR/USD and USD/JPY can happen between Thursday and Friday. Stay tuned!

Yohay Elam

Yohay Elam

Yohay Elam: Founder, Writer and Editor I have been into forex trading for over 5 years, and I share the experience that I have and the knowledge that I've accumulated. After taking a short course about forex. Like many forex traders, I've earned a significant share of my knowledge the hard way. Macroeconomics, the impact of news on the ever-moving currency markets and trading psychology have always fascinated me. Before founding Forex Crunch, I've worked as a programmer in various hi-tech companies. I have a B. Sc. in Computer Science from Ben Gurion University. Given this background, forex software has a relatively bigger share in the posts.