Forex Daily Outlook – October 20th 2009

After another day of dollar weakness, we have significant American figures today, especially in the housing sector and also a rate decision in Canada. Let’s review the events that will impact trading:

Renewed dollar weakness took the kiwi above 0.75. Are the markets expecting a rate hike in New Zealand? USD/CHF also advanced downwards on the way to parity, and was just 100 pips away during the night.

Australian Monetary Policy Meeting Minutes started the day with a rather cautious notion. No more emergency steps, but no definite rate hike path soon. AUD/USD is stuck under 0.93 resistance line. For more on the Aussie, read the AUD/USD Forecast.

In Germany, prices fell again. PPI fell by 0.5%, falling short of expectations for an unchanged number. EUR/USD is just under 1.50. For more on the the Euro, read the EUR/USD Forecast.

In Britain, Public Sector Net Borrowing is expected to squeeze to 15.2 billion this time. GBP/USD managed to push higher yesterday, but is now back down under 1.64.

Later today, BoE governor Mervyn King will make a public appearance. He might clear his stand  regarding  Quantitative Easing. Different reports about this program shook the markets. For more on the Pound, read the GBP/USD Forecast.

In Canada, the Leading Index is expected to continue the positive trend, and rise by 0.9%. Wholesale Sales are expected to fall by 0.4% after rising last time by 2.8%. But these are just a prelude.

In the US, Building Permits are expected to edge up 590K signalling slow growth of the housing sector. A related release is the Housing Starts, which are expected to edge up as well, from 600K to 620K.

American Producer Price Index, PPI, is predicted to rise by 0.1%, after a big 1.7% rise last time. Core PPI is expected to show stability, rising by 0.1% after a 0.2% rise last month. Later, FOMC member Kevin Warsh will speak.

The BOC is expected to leave the interest rate unchanged at 0.25%. The Canadian Overnight Rate is at 0.25% for a long time. The accompanying BOC Rate Statement will supply hints about when a rte hike will happen – in which quarter in 2010. USD/CAD now trades at 1.0300.

For more on the loonie, read the USD/CAD Forecast.

That’s it for today. Happy forex trading!