Posted: 03 Apr 2010 02:50 AM PDT

The upcoming week begins with important American figures on Easter day, and continues with a very busy week all over the world – four rate decisions, two employment releases and one Ben Bernanke are on the menu this week. Let’s see what’s awaiting us:

The echoes of the Non-Farm Payrolls will be heard at the beginning of the week, when the calendar is light, and also afterwards. The rise in jobs, that finally arrived, will raise the pressure for a rate hike. OK, let’s start reviewing the 11 major events:

American ISM Non-Manufacturing PMI: Published on Monday at 14:00 GMT. After the same figure for the manufacturing sector posted a huge surprise last week, expectations are high for this figure as well – a rise from 53 to 54.3 points is predicted – the highest in two and a half years.
American Pending Home Sales: Published on Monday at 14:00 GMT. After a huge disappointing drop of 7.6% last month, this important housing indicator is predicted to drop by another 0.9%. Together with the PMI, both figures will rock the markets on Easter Day, as most traders are on holiday, and only these releases are due.
Australian rate decision: Published on Tuesday at 4:30 GMT. There contradicting expectations for this decision. On one hand, Glenn Stevens (RBA governor) signaled another rise in rates to 4.25%, but the recent figures from Australia indicated a pause, after they reached 4%. The uncertainty will make the impact stronger than usual.
American FOMC Meeting Minutes: Published on Tuesday at 18:00 GMT. Despite the rise in the discount rate and one member, Thomas Hoeing, that wants the bank to be more hawkish, the FOMC statement hasn’t really changed recently. Will the meeting minutes reveal something new about a future rate hike?
Japanese rate decision: Published on Wednesday morning. The BOJ isn’t expected to move the interest rates, still at 0.1%. The focus will be on the tone of the accompanying statement and especially on extra easing steps. Japanese policymakers are happy with the recent decline of the yen, but the economy is still struggling, as seen in the Tankan index. This will shake USD/JPY and the yen crosses.
Australian employment data: Published on Thursday at 1:30 GMT. After 4 superb months, the recent employment figures in Australia were only OK. More positive yet stable data is due this time – employment change is predicted to rise by 20K, and the unemployment rate to remain unchanged at 5.3%.
British rate decision: Published on Thursday at 11:00 GMT. The Official Bank Rate is expected to stay at the historic low of 0.5%, and the Quantitative Easing program will probably not receive extra cash, after exhausting the 200 billion pounds allocated to it. The focus will be on the MPC rate statement, and especially comments about the government deficit and the economy. Will Mervyn King hurt the Pound again?
European rate decision: Published on Thursday at 11:45 GMT. Jean-Claude Trichet will make his first rate decision after the Greek accord (“safety net”), that helped the Euro recover. The rate has no reasons to rise above 1%, so also here, comments about the economy at the press conference (45 minutes after the release) will rock the Euro.
American Unemployment Claims: Published on Thursday at 12:30 GMT. Yet another drop in the weekly jobless claims is due. After reaching 439K, they’re predicted to drop to 432K, supporting more job gains in the next NFP. Recent releases were better than expected. Will there be another positive surprise?
Ben Bernanke talks: Starts speaking on Friday at 00:30 GMT. The chairman of the Federal Reserve always moves the markets, even if he doesn’t say anything meaningful. He’ll speak about economic policy at a dinner in Washington, and will respond to questions from the audience. The dollar could move sharply in the middle of the Asian session.
Canadian employment data: Published on Friday at 11:00 GMT. After the recent drop to 8.2%, Canada’s unemployment rate will probably remain unchanged. The accompanying figure, employment change, will probably show another nice gain in jobs – 25.3K. This can push the loonie higher.

That’s it for the major events of the week. I’ll later post specific currency update.

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Forex Links for the Weekend

Posted: 02 Apr 2010 02:00 PM PDT

After the Non-Farm Payrolls, the long Easter weekend provides time for reading some forex articles with a longer scope. Here are my recommendations:

Kathy Lien sees USD/CAD reaching parity and remaining there for an extended period this time.
Larry Greenberg discusses the improving employment situation and the monetary policy of the Federal Reserve.
Macro Man discusses the trends in the Pound in his special way.
Adam Kritzer argues that a rate hike in the US is still far in the distance.
Sophia Todorova, on Casey Stubbs’ site, explains how to find reversals in forex trading.
Francesc Riverola announcing a new currency converter that will help get the best possible rate.
Michael Greenberg reports about a new site for comparing robots / EAs – another development in the growing forex industry.
Andrei reports that scientists finally discovered the patterns behind forex trading… Just April fools…

That’s it. Have a great weekend!

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Dollar Rallies on Job Gains

Posted: 02 Apr 2010 06:35 AM PDT

It finally happened – the American job market gained 162,000 jobs in March. The highest gain in 3 years sends the dollar higher across the board. Not all currencies affected equally. NFP Analysis.

Non-Farm Payrolls rose by 162K. This is the first time that the Department of Labor reports a rise in jobs in the month that just ended. There was a gain in jobs in November 2009, but this was seen only in a revision that came later – not in the initial report.

Early expectations stood a rise of 180K, or on a media of 200K according to Reuters. So, this seems like a disappointing result. Indeed, the initial response was somewhat hesitant. But two factors helped the dollar rise:

Despite the small miss, this is still the biggest gain in jobs in three years. This is really great news. The unemployment rate remained unchanged at 9.7%, as expected.

The second reason for the dollar’s strength is that the rise in jobs doesn’t solely lean on the government – the 2010 decennial census is only a small portion of gains – the private sector added 123,000 jobs – the highest since May 2007. This shows that the rise is real and strong, and also that the ADP Non-Farm Payrolls announced earlier in the week were totally wrong.

Forex reaction

On thin volume, due to Good Friday, EUR/USD fell below 1.,35, GBP/USD fell below 1.52, and USD/JPY broke the resistance line and made a leap to 94.50. Note that the good Non-Farm Payrolls helped GBP/JPY that touched 144.

But not all currencies are equal: the Aussie reacted in a more mild way. USD/CAD stood out with a fall – the pair dipped below 1.01 – the Canadian dollar showed its strength once again.

This strength of the loonie on the backdrop of the NFP signals that USD/CAD may reach parity next week, on Canadian employment figures.

– This post will be updated as the market continues to move on the NFP –

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