The week began with a strong start, especially for the British Pound, which was knocked down. Today, more important events are awaiting us with rate decisions in Australia and Canada being in the limelight. Let’s see what’s up for today.
Australian action starts the day. Retail Sales jumped another 1.2% following a nice leap of 2.2% of last month. In the housing sector, a disappointment came from last month’s dropping Building Approvals. Unfortunately, we are seeing more disappointment with another 7% drop in January. The Australian central bank raised the interest rate to 4%. This is the fourth rate hike since the financial crisis broke out. Australia is the first and only Western country to raise the rates. After a surprising pause last month, Glenn Stevens resumed the moves. Also note the tone of the RBA Rate Statement regarding future moves. For more on the strong Australian dollar, read the AUD/USD forecast.
In Switzerland, the GDP is expected to rise by 0.4%, more than 0.3% in Q3. This might stop the Swissy’s retreat.
In Britain, Construction PMI dipped to 48.5 from 48.6 points, still under the critical 50 point mark. Yesterday’s British figures were OK, but the news hurt the Pound. For more on the Pound’s (low) technical levels, read the GBP/USD forecast.
The Euro is weaker, but hanging on to the critical 1.3423 level, helped by a drop of the unemployment rate below 10%. Today the CPI Flash Estimate ticked down to 0.9% in February from 1.0%. Also note the European producer prices continued to drop in January. For more technical levels, read Casey Stubbs’ latest analysis and for events, check out my EUR/USD forecast.
The Canadian dollar enjoyed an excellent GDP result yesterday: the economy grew by 0.6% in December 2009, and at an annual rate of 5% in Q4. This helped the loonie. And today there’s another test. The Bank of Canada will probably leave the Overnight Rate unchanged at 0.25%. The focus will be (as usual) on the BOC Rate Statement. Mark Carney has clearly stated that the timing for raising the rates is June 2010, which is now only three months away. Will he talk about an earlier schedule? It didn’t happen before. Check out the USD/CAD forecast for technical levels.
That’s it for today. Happy forex trading!
Yohay Elam is the owner of Forex Crunch, a blog about the foreign exchange market. It includes tutorials, basics of the forex market, daily and weekly forex analysis, technical analysis, forex software posts, and whatever is related to Forex.
Article copyrighted by Yohay Elam. Content published with author's permission.
