Once again in Europe we have very little fundamental news on the economic calendar of any note with only minor news this morning covering the M3 money supply, private loans year on year and consumer confidence.  Of these the first two came in worse than expected with the last coming in marginally better than expected so a mixed picture.  The important data is due for release shortly in the US starting with Advance GDP coupled with the GDP Price Index, followed shortly afterwards by the Crude Oil Inventories and neatly rounded off this evening with the US interest rate decision from the FOMC.

Advance GDP measures the annualized change in the value of goods and services produced by the economy and the advance numbers are generally considered the most important of the three versions of this indicator which are released a month apart, as they provide the most up to date picture, and therefore tends to have the greatest impact on the markets.  The forecast is for -4.8% against a previous of -6.3% suggesting and analysts suggest that this could confirm that the 16 month old recession is beginning to abate but that these numbers may have already been factored into the market.  The data is expected to show a slight recovery in consumer spending after a collapse during the second half of 2008.  However, this fragile recovery needs to be viewed against the backdrop of swine flu which could quickly extinguish any sign of consumer confidence returning.   This article explains just how much damage such a pandemic could cause.

Advance GDP is closely followed by the advance GDP price index which measures the change in the price of goods and services in the GDP data and provides a broad measure of inflation or deflation.  The forecast is for a figure of 1.8% against a previous of 0.5%.  The significance of this number cannot be under estimated as it may influence the rate decision due later in the day.  This is followed shortly afterwards by the crude oil inventories which, as always, tend to have a greater impact on the usd to cad pair, owing to Canada’s position within the energy market.  The inventory is expected to have increased for the 8th week running.

Finally the market will be eagerly awaiting the FOMC interest rate decision and statement.  Although the forecast is to remain the same some analysts have speculated that the rate could fall to 0.125%.

In the meantime you can keep up with all the latest fundamental news, latest currency news and live currency charts by simply following the appropriate links.  I have also included details on an excellent ECN broker.