Forex Crunch Forex Daily Outlook – December 8th 2009 |
| Forex Daily Outlook – December 8th 2009 Posted: 07 Dec 2009 02:11 PM PST
No significant American indicators are predicted today, but elsewhere, the calendar is busy: a rate decision in Canada, Final GDP in Japan, and the unofficial but accurate GDP estimate in Britain. Let’s see what’s up for today:
Image credit: Vlastula on Flickr British BRC Retail Sales Monitor start the day. After a rise of 3.8% last time, a more modest advance is expected. Later in Britain, Manufacturing Production is expected to rise by 0.5%, less than last time’s rise of 1.7%. British CBI Industrial Order Expectations are predicted to edge up to -42, still in the negative zone. The more interesting event in my opinion is the NIESR GDP estimate. This institute foresaw the ongoing recession in Britain, contrary to many economists’ estimations. For more on the Pound, read the GBP/USD forecast. In Australia, Current Account is expected to show a bigger deficit this time, of 16.7 billion. Also note the NAB Business Confidence, which has reached 16 points last month, expressing optimism. Glenn Stevens, the head of Australia’s central bank, will make a public appearance, and may say something about the next moves regarding interest rates, after raising the rates three times in a row. On the other side of the day, the Westpac Consumer Sentiment is released and provides a look from the consumer side. For more on the Aussie, read the AUD/USD forecast. In Europe, a day after German Factory Orders disappointed by falling by 2.1%, the continent’s largest economy publishes its Industrial Production, which is predicted to rise by 1.1%, following a 2.7% rise last month. For more on the Euro, read the EUR USD Forecast. In Canada, Housing Starts are predicted to edge up to 158K, 1000 more houses than last month. This is a quick warm up the rate decision. Mark Carney’s Bank of Canada is expected to leave the Overnight Rate unchanged at 0.25%. The wording of the BOC Rate Statement will be critical. Will the BOC repeat the statement about not moving the rates till the end of Q2 2010? Last month’s repeat was disappointing, and sent the loonie down. For more on USD/CAD, read the Canadian dollar forecast. And just before the end of the day, Final GDP will be published in Japan. The initial read of a 1.2% growth rate is expected to be revised downwards to 0.8%, something that will help USD/JPY ride north. That’s it for today. Happy forex trading! |
| Loonie Builds Up on Building Permits Posted: 07 Dec 2009 07:05 AM PST
Another huge surprise in Canada strengthens the loonie across the board: Building Permits jumped by 18% and the loonie jumps as well. This follows the excellent job figures on Friday. Will interest rates rise earlier than expected?
Image credit: tanakawho on Flickr. Economists predicted a rise in Canadian Building Permits, but the scale was modest – 1.1%. The result, a rise of 18%, was a huge surprise. This is mostly a result of a wide range of industrial projects, that were initiated by the Canadian government, as part of the stimulus plan. Here’s a quote from Reuters:
This supplied a good start for the Canadian dollar’a week – USD/CAD fell instantly from around 1.06 to 1.0550. Most of the currencies are suffering from more dollar strength, a move that began after Friday’s excellent American Non-Farm Payrolls. The Canadian dollar stands strong. Also EUR/CAD falls to 1.56. The Canadian dollar had an early answer already on Friday with its own employment figures: a rise of almost 80,000 jobs in Canada and a drop in the unemployment rate to 8.5% helped the loonie weather the greenback’s storm. The next important figure for the Canadian dollar also comes from the housing sector: Housing Starts are published tomorrow. A bigger test awaits the Canadian dollar immediately afterwards: The Bank of Canada makes a rate decision. BOC Governor Mark Carney isn’t expected to raise the rock bottom interest rate from 0.25%. What Carney can do is change the wording of the BOC Rate Statement, by changing the schedule for a rate hike. The BOC is quite straightforward on future policy. Their current target for a rate hike is by the end of Q2 of 2010. Carney might announce that a hike is possible also in Q1, and this might boost the C$ even more. On the downside, Canada’s monthly GDP, that was announced last week, disappointed with a smaller-than-expected rise of 0.4%. For more on the loonie’s week, read the Canadian dollar forecast. |
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