المشاركات
Talking Points
- British Pound: Manufacturing Rises for Six Straight Months
- Euro: German Factory Orders Fall Short of Expectations
- Canadian Dollar: BoC to Hold Rate at 1.00%
- U.S. Dollar: Consumer Credit on Tap
The British Pound rallied to a high of 1.5821 during the European trade as the economic docket reinforced an improved outlook for the U.K., and the exchange rate may continue to push higher going into the middle of the week as it carves out a near-term bottom around 1.5500. A report by the U.K. Office for National Statistics showed manufacturing increased 0.6% in October amid forecasts for a 0.3% rise, while industrial outputs slipped 0.2% during the same period, led by a decline in utilities and mining. As policy makers in Britain expect the recovery to carry into the following year, the Bank of England may raise its fundamental assessment for 2011, but the tough austerity measures taken on by the new coalition in the U.K. is likely to drag on economic activity as the government aims to balance the budget deficit.
The BoE is widely expected to hold the benchmark interest rate at 0.50% later this week, while maintaining its asset purchase target at GBP 200B, but there could be a growing split within the MPC as the economic outlook remains clouded with uncertainties. As the central bank expects inflation to hold above the 2% target throughout the following year, the BoE is likely to turn increasingly hawkish over the near-term, and speculation for a rate hike in the beginning of 2011 could lead the GBP/USD to retrace the decline from November as interest rate expectations gathers pace. However, if the BoE refrains from releasing a statement, the pound-dollar may consolidate over the near-term as the central bank is scheduled to release its policy meeting minutes on December 22, and the British Pound could face increased volatility going into the end of the year as investors weigh the outlook for future policy. As price action holds below the 20-Day moving average at 1.5835, the exchange rate may hold steady over the next 24 hours of trading, but the rebound in market sentiment could push the GBP/USD higher throughout the North American trade as risk trends continue to dictate price action in the currency market.
The Euro pared the previous day’s decline to reach a high of 1.3394, but the lack of momentum to push back above the 20-Day SMA at 1.3427 may keep the EUR/USD confidence within a narrow range as the economic docket remains fairly light for Tuesday. As European policy makers continue to talk down the risk for contagion and dismiss calls for an expansion in the EU bailout fund, the recent efforts have certainly helped to ease the turmoil within the financial markets, but Ireland’s new budget plan, which includes higher taxes paired with a EUR 6B reduction in public spending, could face increased scrutiny as the new austerity measures hamper the outlook for future growth. As the governments operating under the fixed-exchange rate system struggle to manage their public finances, the European Central Bank may see scope to support the real economy throughout the first-half of 2011, and the Governing Council may turn increasingly dovish as policy makers expect inflation to remain subdued over the medium-term. Nevertheless, the economic docket showed factory orders in Germany increased 1.6% in October amid forecasts for a 1.9% rise, while demands increased 17.9% from the previous year, which fell short of expectations for a 18.6% expansion.
The greenback weakened against most of its major counterparts following the rise in risk appetite, while the USD/JPY pulled back from a high of 82.81 during the overnight trade to remain fairly flat on the day. As equity futures point to a higher open for the U.S. market, the dollar could face increased selling pressures throughout the day, but the Bank of Canada interest rate decision is likely to spark volatility in the USD/CAD as the central bank maintains a cautious outlook for the region. The BoC is widely expected to hold the benchmark interest rate at 1.00% as the central bank lowers its growth forecast and sees the economy operating below full capacity until the end of 2012, and dovish comments following the rate decision could lead the dollar-loonie to give back the overnight gains as interest rate expectations falter. In addition, consumer credit in the world’s largest economy is forecasted to contract $1.0B in October after expanding $2.1B in the previous month, and the data could weigh on market sentiment as it reinforces a weakened outlook for future growth.
Related Articles: Forex Weekly Trading Forecast - 12.06.10
FX Upcoming
Currency | GMT | EST | Release | Expected | Prior | |
CAD | 14:00 | 09:00 | Bank of Canada Rate Decision | 1.00% | 1.00% | |
USD | 15:00 | 10:00 | IBD/TIPP Economic Optimism (DEC) | -- | 46.7 | |
USD | 20:00 | 15:00 | Consumer Credit (OCT) | $-1.0B | $2.1B | |
Currency | GMT | Release | Expected | Actual | Comments | |
AUD | 23:00 | AiG Performance of Construction Index (NOV) | -- | 42.2 | Falls back after climbing sharply in Oct. | |
NZD | 23:00 | QV House Price (YoY) (NOV) | -- | 0.3% | Continues slowing trend | |
JPY | 23:50 | Official Reserve Assets (NOV) | -- | $1101.0B | Lowest since Aug. | |
NZD | 00:01 | Manpower Survey (1Q) | -- | 16% | ||
CNY | 00:01 | Manpower Survey (1Q) | -- | 38% | ||
AUD | 00:01 | Manpower Survey (1Q) | -- | 21% | ||
JPY | 01:00 | Manpower Survey (1Q) | -- | 7% | 5th straight expansion, highest level. | |
AUD | 03:30 | RBA Rate Decision (DEC) | 4.75% | 4.75% | Investors continue to pare expectations for future rate hikes after a neutral statement | |
JPY | 05:00 | Coincident Index (OCT) | 100.8 | 100.7 | Lowest since March | |
JPY | 05:00 | Leading Index (OCT) | 97.3 | 97.2 | Lowest since Jan. | |
CHF | 06:45 | Unemployment Rate (NOV) | 3.6% | 3.6% | Climbs for 1st time in 2010 | |
CHF | 06:45 | Unemployment Rate s.a. (NOV) | 3.6% | 3.6% | ||
GBP | 09:30 | Industrial Production (MoM) (OCT) | 0.3% | -0.2% | 4th contraction in 2010 | |
GBP | 09:30 | Industrial Production (YoY) (OCT) | 3.9% | 3.3% | Continues slowing trend after peaking in Aug. | |
GBP | 09:30 | Manufacturing Produtcion (MoM) (OCT) | 0.3% | 0.6% | Fastest since March | |
GBP | 09:30 | Manufacturing Production (YoY) (OCT) | 5.4% | 5.8% | Bounces back from drop lower in Sept. | |
EUR | 11:00 | German Factory Orders (MoM) (OCT) | 1.9% | 1.6% | Bounces back from sharp contraction in Sept. | |
EUR | 11:00 | German Factory Orders (YoY) (OCT) | 18.6% | 17.9% | Climbs after sharp drop in Sept. | |
ليست هناك تعليقات:
إرسال تعليق