Tomorrow’s trading session promises to be a busy one, as a batch of news from both the euro-zone and US get set to inject heavy volatility in the marketplace. The two most significant of these news events appear to be the European Minimum Bid Rate, which is quickly followed up by the ECB Press Conference, scheduled for 12:45 and 13:30 GMT respectively, and this week’s US Unemployment Claims Figure, which is also set to be released at 13:30.
While analysts are not forecasting a change to the European Minimum Bid Rate from its current level of 1.00%, the real volatility will likely occur during the ECB press conference. Investors will be watching out for any clues as to when euro-zone interest rates will be changed, as well as any news regarding Portugal’s current debt situation. Portugal is likely to be the next euro-zone country to suffer a debt crisis, and the manner in which the euro-zone deals with the issue will likely impact the currency for the foreseeable future.
Turning to the US, this week’s Unemployment Claims figure is forecasted to come in around the 405K level. If true, it would mark a slight improvement over last week’s figure of 409K. Following last week’s mildly disappointing Non-Farm’s report, investors will be paying particular attention to this week’s employment statistics to gauge how the US economic recovery is going.
The impact these news events will have on EUR and USD currency pairs is still unknown. On the one hand, negative news regarding Portugal will likely cause the euro to plummet in afternoon trading. On the other hand, should the ECB reveal a credible plan to help Portugal stave off a debt crisis, investors may flock to the 17-nation single currency. With regards to the dollar, the importance of tomorrow’s unemployment figure cannot be overstated. A better than expected result will likely give the greenback a considerable amount of momentum to close out the week. That being said, any figure above last week’s result of 409K will likely lead to significant doubt with regards to the US economic recovery.
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Dan Eduard is a Market Strategist with ForexYard. His addition to the ForexYard team has brought a unique new perspective to our clients. Dan's ability to compare and contrast trans-national issues with events in the market is uncanny and many clients so far have used his advice to make leaps and bounds in their trading strategies. He has been published on the ForexYard Trading Blog and affiliate websites. He carries a BA in Political Science and an MA in History.
