The euro may face increased selling pressures over the next 24 hours of trading as economists forecast German unemployment to rise 43K in July, and fears of a protracted downturn is likely to weigh on the exchange rate as the Bundesbank forecasts growth prospects to remain subdued throughout the first half of 2010. Trading the News: German Unemployment Change What’s Expected Time of release: 07/30/ 2009 07:55 GMT, 03:55 EST Primary Pair Impact : EURUSD Expected: 43K Previous: 31K Impact the German Unemployment Change has had on EURUSD over the last 2 months Period Data Released Estimate Actual Pips Change (1 Hour post event ) Pips Change (End of Day post event) Jun 2009 06/30/2009 07:55 GMT 45K 31K -11 -73 May 2009 05/28/2009 07:55 GMT 64K 1K -23 +64 June 2009 German Unemployment Change The German labor market weakened further in June, with unemployment rising 31K from the previous month to 3.5M, which is the highest since 2007, and businesses may continue to scale back on production and employment in an effort the weather the downturn in global trade. The data foreshadows a weakening outlook for domestic growth as households face fading demands for employment paired with tightening credit conditions, and the labor market is likely to weaken further throughout the second half of the year as the effects of the government stimulus package subside
Trading the News: German? ZEW Investor Confidence Survey What’s Expected Time of release: ? 07/14/2009 09:00 GMT, 05:00 EST Primary Pair Impact : ? EURUSD Expected: 48.0 Previous: ? 44.8 Impact the German ZEW Survey report had over EURUSD for the past 2 months ? Period Data Released Estimate Actual Pips Change (1 Hour post event ) Pips Change (End of Day post event) June 2009 06/16/2009 9:00 GMT 35.0 44.8 -38 -77 May 2009 05/19/2009 9:00 GMT 20.0 31.1 -15 -10 ? June 2009 German ZEW Survey The German ZEW investor confidence survey rose to 44.8 in June from 31.1, which is the highest reading since May 2006, and the data suggests the economic downturn may be is nearing a bottom as policymakers take unprecedented steps to shore up Europe’s largest economy. However, as the Bundesbank anticipates GDP to contract at an annual rate of 6.2% this year, fears of a stagnant recovery could drag on the economic outlook as investors weigh the prospects for future growth.
Australia’s Westpac Consumer Confidence added 9.3% in July, the second consecutive month of gains, rising to the highest level in 19 months. In annual terms, confidence has added 38.5%.
The US Dollar is likely to see gains in the days and weeks ahead as stock markets reverse lower, boosting demand for the safety-linked currency. The Dow Jones Industrial Average looks to have broken support at the neckline of a Head and Shoulders topping chart formation, hinting a bearish reversal is ahead: Dow Jones Industrial Average (daily) The Dow is closely correlated to most of the major currency pairs, with the high-yielding and commodity-linked currencies naturally showing the strongest relationships because of their inherent connection to trends in risky assets. The correlations to EURUSD and GBPUSD are also substantial: DJIA vs.
Canadian Dollar To Weaken Further As Labor Market Falters Fundamental Forecast for Canadian Dollar: Bearish -?Canadian GDP Contracts in April, Factory Prices Tumble Lower in May -?USD/CAD Sentiment Mixed The Canadian dollar weakened against the greenback following the drop in risk appetite, and the loonie may continue to face increased selling pressures over the following week as the economic calendar foreshadows a weakening outlook for the world’s eighth largest economy. As a result, fears of a protracted recession could lead the Bank of Canada to take additional steps this month in an effort to stem the downside risks for growth and inflation, and speculation for further easing could weigh on the exchange rate over the near-term.
Swiss Franc May Fall If Bulls Give Up Fight Against Intervention Fundamental Forecast for Swiss Franc: Bearish - Swiss UBS May Consumption Indicator fell to 0.772 from 0.912, which was the lowest in five years -?SVME-PMI Index rose for July to 41.8 from 39.8, as orders increased -?Consumer prices fell for a fourth month by 1.0%, but less than the -1.1% expected The Swiss Franc ended last week relatively unchanged after it fell after reaching an eight day high on prospective SNB intervention and broad based dollar strength. The Swiss National Bank Governing Board member Thomas Jordan said the central bank will continue to intervene on an ad-hoc basis to prevent the Swiss franc from rising, as part of its massive quantitative easing. We didn’t see any clear signs of intervention as we did the week prior when the USD/CHF rose nearly 400 pips on June 24th
All of the economic data for the week has been released and the final session of trade is expected to be a boring one, with the US holiday weekend kicking off and the equity markets closed. The commodity bloc currencies have outperformed on the lightened session, while Sterling lags
Fundamentally, it was a heavy period for the Canadian dollar last week. However, the data flow that was coming off the docket would ultimately be drowned…
The Australian Dollar is set to face selling pressure as an uneventful economic calendar yields to a reversal in risk appetite across financial markets….
The New Zealand dollar lost ground against the greenback this week, but the 2009 rally continues to be well supported by the 20-Day moving average, and…