Archive for euro currency

Euro To Dollar – Fundamental News This Week

Monday, November 2nd, 2009

A busy week for the euro to dollar with the three main events being the FOMC meeting and rate decision on Wednesday, which is followed on Friday by the Non Farm Payroll data as we are now starting a new month ( how time flies!!) Sandwiched between this of course is the ECB rate decision on Thursday, so a packed week of high profile news. The forex markets, and broader financial markets in general will be watching the statement from the FED on Wednesday VERY closely, following the figures from last week which suggested that the US economy has finally emerged from recession and into growth once again. It is far too early to expect a rate increase of course, but the wording of the statement will be dissected and analysed for any clues that interest rates may now rise sooner rather than later, with any such signal being helpful to the US dollar, which is currently languishing at the bottom of a waterfall on the US dollar index chart. Indeed any comments to this effect could signal the long awaited shift in market sentiment towards the US dollar which is currently occupying the position of the low yielding currency of choice for the carry trade, a place once taken by the Japanese Yen. Should the statement on Wednesday, be confirmed by some good numbers on Friday with the NFP data, then this could signal a revival for the US dollar, and fall in the euro as a result.

Monday’s fundamental news kicks off in Europe with the Final Manufacturing PMI data, a relatively minor news item, followed in the afternoon by a raft of US housing data including Pending Home Sales, Construction Spending, along with two sets of data from the ISM, one for Manufacturing Prices and the other for Manufacturing PMI. Tuesday is an extremely quiet day as the markets wait for Wednesday which also includes the ADP Non Farm Employment numbers which often provide an excellent guide to the more significant NFP figures on Friday, with the former having been compiled from payroll data – a relatively accurate measure of the numbers of people employed and the changes during the month.

Thursday is all about the ECB, and once again not so much the rate decision with the ECB  once again keeping interest rates on hold, but more about the accompanying statement to the decision which is released 45 minutes after the rate announcement, and it is the statement itself which will be closely watched for any clues or signals of changes in policy. Finally we have Friday and a crowing end to a busy week with the NFP data, which may well set the tone for the US dollar over the next few months, particularly if it provides a confirmatory message to the statement on Wednesday – so a decisive week for the euro vs dollar of fundamental news on the economic calendar.

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A curious start to the week for the euro to dollar forex pair, with very little real fundamental news on the economic calendar tomorrow, but instead we have several speeches from FOMC members and between these is an address from President Obama in the US markets. For Europe there are two items of news which start with the Industrial Production figures followed by the Employment Change, with the first of these forecast at -0.3%against a previous of -0.6%. The figures tend to have a relatively muted impact on the forex markets as both Germany and France which constitute over 50% of the European economy, release their figures earlier, and whilst this is considered a leading indicator, the effects are low key for the euro to dollar, and other forex pairs. The only other item for Europe is the Employment Change which is forecast at -0.8%, but again this will have limited impact on the euro dollar.

The afternoon in the US for fundamental news is punctuated by speeches starting with FOMC member Duke, followed by President Obama, and completed with a speech by FOMC Lacker and finally FOMC member Yellen. All four speeches cover some aspect of the financial crisis, so we could see some interesting reactions in the forex markets tomorrow, and indeed many forex analysts and forex market commentators are now suggesting that we may see a significant shift in the US dollar sentiment which is now widely believed to be oversold, and the speeches on Monday could provide the trigger for the US dollar to stage a recovery.

You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links.  I have also included details on an excellent ECN broker.