Forex Daily Outlook – November 16th 2009

The dollar started the week lower on more world recovery, this time from Japan. Today’s American retail sales, a speech by Bernanke and European inflation (or deflation)  numbers are the highlights of the day. Let’s see what’s awaiting us today:

Japan’s preliminary release of third quarter GDP was excellent: Gross Domestic Product rose by 1.2%, much better than 0.8% that was estimated. Also the Prelim GDP Price Index rose more than expected – by 0.2%. USD/JPY is at 89.60, recovering from the initial shake.

A video from a partner:

In Britain, Rightmove HPI disappointed and fell by 1.6% after nice rises in previous months. Later today,  MPC members Paul Tucker and Andrew Sentance will be speaking. Their approach toward quantitative easing has a strong impact on the Pound.

GBP/USD now trades at 1.6727, enjoying the dollar’s weakness. For more on the Pound, read the GBP/USD Forecast.

In Europe, consumer price index is predicted to drop by 0.1%. CPI shows the European deflation in the best way. Core CPI is predicted to rise by 1.2%. The figures are annualized. This event will sure shake the Euro, after it started the week by making nice gains, now at 1.4974.  Also note a speech by ECB member Axel Weber, the first and not the last this week.

I recommend reading a piece by Casey Stubbs, that notices a head-and-shoulders pattern in EUR/USD.  For more on the Euro’s week, read the EUR/USD Forecast.

In Canada, Manufacturing Sales are expected to rise by 1% after falling last month. This is quite a volatile indicator. USD/CAD opened the week lower, at 1.0466 at the moment. For more on the loonie, read the USD/CAD Forecast.

American Retail Sales are expected to rise again. After a disappointing 1.5% drop last month, this major indicator is expected to rise by 1% this time. Core Retail Sales, no less important, are predicted to post a 0.4% rise, similar to last month’s 0.5% move.

Also in the US at around the same time, 13:30 GMT, the Empire State Manufacturing Index is predicted to drop to 29.9 points after months of climbing. Business Inventories are predicted to drop by 0.7%, after a fall of 1.5% last month. A continued drop in inventories is good for the economy – showing demand.

Ben Bernanke will speak at 17:15 GMT in a conference in New York. He might make some interesting statements regarding future policy. Concerns about the low interest rate in the US are heard all over the world. AlsoDonald Kohn, another FOMC member will speak near the end of the day.

Near the end of the day, Japan’s Tertiary Industry Activity is expected to rise by 0.1%, less than last month’s rise.

That’s it for a rather busy Monday. There are more interesting events on the road ahead. Check out the forex weekly forecast for more.