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Eurodollar Daily Update: 2nd April 2009

A veritable host of fundamental news on the economic calendar for today whose affect on the market will be distorted by the G20 summit, of which of course the most important s the so called minimum bid rate (interest rates to you and me) for the eurozone and released by the ECB.  The forecast is for the ECB to cut rates taking eurozone interest rates down to a new all time low of 1% in what could be seen as its last rate cut for some time to come.  In addition the ECB looks likely to adjust its overnight deposit rate to avoid pushing inter bank rates too low.   The rate decision itself is often overshadowed by the ECB press conference which is held 45 minutes after the announcement.  The conference call is divided into two parts, the first of which is a pre-prepared statement outlining the bank’s interest rate decision, which is then followed by a question and answer session.  It is during this latter part of the session that unscripted answers are often pounced upon by the markets as they sometimes reveal clues, not immediately evident in the written statement, to future monetary policy by the bank.

Whilst the press conference in Europe is in progress we then have the unemployment claims being released in the US by the Department of Labour which highlight the number of people claiming for unemployment insurance during the past week for the first time.  The number is expected to be much the same as last time at 649k, however, following yesterday’s awful monthly ADP figures it would not be a surprise to see these come in far worse than expected which could, once again, negatively affect the US dollar.

The next item on the economic calendar is a speech by Jean Claude Trichet who is due to speak about the future of the euro at an event in Frankfurt, whilst back in the US we have factory orders being released which will highlight the change in the total value of new purchase orders placed with manufacturers.  This is generally considered a leading indicator of production with rising purchase orders signalling an increase in economic activity, and the forecast is for a positive 1.5% against a negative 1.9% the last time.

Finally the joker in the pack due out at 15.30 GMT is the final communique from the G20 – as my old chemistry teacher was always telling us:  “empty vessels make the most noise”!!

Don’t forget you can keep up with all the latest currency news, live currency charts and fundamental news by simply following the relevant links.  I have also included details on an excellent ECN broker.