Mar 30 2007
Daily Forex Analysis
Daily Forex Analysis
USD
It has been a very important trading day for the Greenback yesterday as the US GDP has been published. Gross Domestic Product (GDP) measures the total value of all goods and services produced by the economy. GDP is the broadest measure of activity and the primary gauge of the economy’s health. To foreign investors, a strong economy is viewed favorably because it spurs investment opportunities in the domestic stock and bond markets. More importantly, the central bank is more likely to raise interest rates in the face of a strong and growing economy. The combination of these effects can have a large impact on the demand for the nation’s currency. The figures were stronger than expected as the GDP Annualized Q/Q came in at 2.5% after 2.2% expectancy, and the Deflator came in inline with expectations of 1.7%.
To add to the positive notion, we saw the Unemployment Claims drop to 308K, which also brings a brighter picture on the US labor market.
As for today, the Core Personal Consumption Expenditure is expected to be released at 12:30 GMT. It is expected to come in a bit lower than last month’s 0.3% at 0.2%.
The Core PCE is a very important indicator for the nation’s inflation, and will be closely scrutinized by traders today.
The biggest new event coming from the US today is the Chicago PMI which is known to be a relatively large price shaker. It is expected to come in stronger than last month’s 47.9 at 49.5. That still not very good news for the US economy, as it does not indicate expansion.
It looks like the USD is going to continue to be quite indifferent to market events as it has been yesterday, and if no big surprises will happen, we should be seeing a calm price action all throughout the trading day.
EUR
A relatively light day regarding news event yesterday caused no major movements for the EUR against the majors, as the only mentionable event has been ECB’s president Trichet’s speech. As no radical moves took place, the EUR rally up could continue in a steady pace as it has been for quite a while now.
There are several news events expected in the Euro-Zone today such as the German retail sales, French consumer confidence, French Producer prices, Euro-zone consumer confidence and Euro-zone unemployment. Improvements are expected all around, which should continue to support the EUR.
JPY
There has been a flow of news that came from the Japanese market overnight, with mixed figures. The JPY Core CPI came in lower than expected at -0.2%, followed by a week Tokyo CPI at -0.1%. The positive figure came in the form of the Overall Household Spending which came in much higher than expected at 1.3%. the mixed data caused the JPY to strengthen a bit overnight and is floating around 117.50 against the USD. That trend might be stopped if the US Chicago PMI will come out stronger than expected.
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