Once again for the euro to dollar pair the focus for fundamental news on the economic calendar for today is on the US with only minor news in the eurozone, which has already been released for the German WPI data which came in significantly worse than expected at 0.9% against a forecast of -0.2%. The WPI is a leading indicator of consumer inflation and measures the change in the price of goods sold by wholesalers, with this morning’s numbers showing the biggest fall in more than 22 years. These numbers are beginning to indicate that the German economy is increasingly at risk from deflationary pressures, which could ripple throughout the other EU states.
Later today we have the CPI, Core CPI and Empire State Manufacturing Index, which are then followed by no less than 7 other important items of fundamental data, all of which are explained in greater detail on the economic calendar. All of these are expected to have a significant on the euro dollar today as each is considered an important fundamental indicator. To summarize, CPI and Core CPI measure the change in the price of goods and services bought by consumers, the Core numbers exclude food and energy and are both forecast at 0.1% These are followed by the Empire State Manufacturing which although is only for New York is generally considered an important barometer and is based on a survey of around 200 manufacturers in New York State. Today’s number is expected to show a slight improvement at -35 against a previous of -38.2, the closer to zero then the more optimistic are the respondents.
We then have the TIC data released by the Treasury Department which measures the difference in value between foreign long term securities purchased by US citizens and US long term securities purchased by foreigners and provides an indication of the demand for currency, hence its importance to currency traders. The forecast is for 17bn against the previous of -43bn and if the actual is better than forecast then this could be favourable to the US dollar. This is followed by the Capacity Utilization Rate from the Fed and measures the extent to which resources are being utilized by manufacturers, mines and utilities and again is perceived as a leading indicator of consumer inflation. The forecast is for 69.7% against a previous of 70.2%, so a slightly worsening situation. Coupled with this report we have Industrial Production figures which measure the change in output produced by the above group.
Shortly after we have the crude oil inventories which whilst being a US indicator always tends to have a greater impact on the Canadian Dollar. Once again these are expected to show a rise although analysts can never seem to agree on the extent and estimates range anywhere from 1.5m barrels to 3.1m barrels.
These figures are followed by the NAHB numbers – a housing market index based on a survey in the building industry, and more importantly the Beige Book which is released one hour later. The latter is an important indicator as it is used by the FOMC in their decision making on interest rates. The Beige Book records local economic data which provides a framework for the FED.
Finally to round the day off we have a “Tentative” data set called The Treasury Currency Report which can be a little vague in terms of its timing, but significant in terms of its impact so I will keep you posted as soon as I receive any notice of its contents. The report provides a detailed review of global exchange rate policies and economic conditions and provides an insight into the Treasury’s view of central bank actions around the world. The main focus is centred on those central banks which it considers may intervene in currency manipulation, and is therefore eagerly awaited by us as currency traders. Its importance cannot be underestimated.
You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live charts by simply following the links. I have also included details on an excellent ECN broker.
