ForexNewsNow Daily Market Outlook for February 15th, 2011

ForexNewsNow | Published on February 15, 2011 at 4:17 am

NEW YORK (Forex News Now) – Daily Market Overview – The U.S. Dollar turned in a mixed performance against the other major currencies on Monday according to the daily forex news. The Greenback rose against the Euro and the New Zealand and Canadian Dollars, but fell against Sterling, the Yen and the Aussie.

The decline in the Euro seen during yesterday’s session was due in part to recurring sovereign debt concerns after Italy auctioned 5 and 30 year bonds for a total of €5.18B at slightly higher yields compared with the previous auction. The market will now look to Wednesday’s important auction for €0.75B to €1B of Portuguese Treasury bills and Thursday’s auction for Spanish bonds as the main focus for the euro forecast this week.

Also weighing on the Euro, was news that Dusseldorf based WestLB, a major German lender, was having trouble coming up with a restructuring plan to present to the European Commission. Concerns grew that this could jeopardize any plans for expanding the European Financial Stability Facility before April.

February 13-14th Important Economic Developments:

  1. Japanese GDP Release Beats Consensus – This important economic indicator for the Japanese Yen boosted the currency overall after coming out at -0.3% when the market was expecting a worse decline of -0.5%. Although Yen favorable on balance, this result was worse than the previous month’s rise of +0.8% that was revised downward from +0.9%. USDJPY was trading at 83.40 immediately before the number, but then briefly rose to 83.48 before giving back all of its gains as it fell further to find support at 83.18.
  2. New Zealand Retail Sales Disappoints – Retail Sales in New Zealand fell by a worse than expected -1.1% last month that compared poorly with the market’s consensus of a -0.3% drop. To make matters even worse, the prior month’s +1.5% rise was toned downward to a more modest +1.2% gain. The Kiwi had peaked at 0.7591 before the release, but soon came off to a low of 0.7542 shortly after it was announced.
  3. Australian Home Loans – Australian Home Loans showed an impressive increase of 2.1% last month, versus an expected gain of 1.8%. Nevertheless, while better than expected, the release was still below the previous rise of 2.5% seen the previous month. Realtime forex analysis shows that AUDUSD was trading as low as 1.0017 just before this report’s release but has since rallied as high as 1.0057 in reaction to this positive news.
  4. Chinese Trade Balance Narrowed– The Chinese Trade Surplus narrowed significantly last month to only 6.5B compared to the expected 10.5B result. This was also less than the previous month’s result of 13.1B that went without revision.
  5. Eurozone Industrial Production Falls – Industrial production in the Eurozone declined by -0.1% in the last reporting month, right in line with the market’s consensus call. Nevertheless, the previous result was revised upward to a +1.4% rise from its former +1.2% gain. EURUSD found some support after this net improvement was released.

February 15th Forex Events for Traders to Watch

  1. Australian Monetary Policy Meeting Minutes – The RBA’s minutes from its February meeting were largely a repeat of previous statements by Governor Glenn Stevens, who stated that policymakers were comfortable with the decision to keep rates at 4.75%. While flooding in Queensland may have a strong impact on the Australian economy, it seems that the RBA does not foresee any changes in monetary policy in the near term.
  2. BOJ Rate Decision – The BOJ has released its decision to maintain its benchmark Overnight Call Rate at the expected <0.10% level. The Japanese central bank also be released an associated Monetary Policy Statement that helps explain how its latest rate decision was made.
  3. U.K. CPI and Possible Inflation Letter – This important economic number tends to affect the GBP/USD rate considerably upon its release since the CPI represents an important measure of inflation in the U.K. that has been of particular concern lately. The Consumer Price Index for January is currently expected to increase by +4.0% year on year versus last month’s +3.7% result. If the CPI is over 3%, BOE Governor King is required to write an open letter to the U.K. Chancellor of the Exchequer George Osborne explaining what steps are being taken to address the excessive inflation.
  4. U.S. Retail Sales Numbers – An important indicator of U.S. consumer spending, Retail Sales data measures the change in the total value of sales at the retail level, with the core data excluding the large but volatile automobile sector. Core Retail Sales is currently expected to rise by +0.6% compared with the previous +0.5% increase, while the consensus for Retail Sales is +0.5% versus the former +0.6% result. A higher number usually favorably affects the U.S. Dollar, so a limited risk bet to profit from this result could involve purchasing a USD Call/Euro Put binary forex option.
  5. German Preliminary GDP and the ZEW Economic Sentiment Survey – These important economic indicators are presently expected to come out at +0.5% and 20.1 respectively, compared with the previous results of +0.7% and 15.4.

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