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Euro To Dollar – 19th February 2009

All eyes today will be on the US for the fundamental news for the euro to dollar , with a raft of economic data, some of which is important, and some of which will have less of an impact on the markets. We start the session with the PPI ( Producer Price Index ) which provides a view on the change in the price of finished goods and services sold by producers. As such it tends to be a leading indicator as these price changes are generally passed on to the consumer. If the actual is better than forecast then this is generally seen as positive for the US dollar, with a forecast for this afternoon of 0.2% against a previous figure of -1.9%. At the same time, we also get the Unemployment Claims, which is the number of new claims for unemployment filed during the week, and whilst it is considered a lagging indicator, it can be one of the early signals to any reversal in the current downtrend. The forecast is for a slight fall from last time to 620,000 ( down by 3000).

These are the two most important releases, and the morning news then continues with Core PPI which is the same as the above but excludes energy and food, making the data slightly less important to the market. As with the PPI if the actual is better than forecast then this is generally seen as positive for the currency. To round of the economic data today we have the “Philly Fed Manufacturing Index” which is a ‘diffusion index’  based on surveyed manufacturers in Philadelphia. Above 0.0 indicates improving conditions, below indicates worsening conditions. This survey tends to have a relatively mild impact because it’s released a few days after the tightly correlated Empire State Manufacturing Index. The forecast is for -24.1 against a previous of -24.3.

The last piece of new today is the DOE Crude Oil Inventories which shows the change in the number of barrels of crude oil held in inventory by commercial firms during the past week. There is no consistent effect as the implications can be complex and far reaching.While this is a US indicator, it most affects the Canadian Dollar ( loonie)due to Canada’s sizable energy sector. For more news on the usd to cad please just follow the link here. For more news on the euro vs dollar just follow the link.