ForexNewsNow Daily Market Overview for March 29th, 2011

NEW YORK (Forex News Now) – Daily Market Overview –The U.S. Dollar continued delivering a mixed performance against the major currencies on Tuesday according to the daily forex news. The USD news showed the Greenback rose against the Canadian Dollar, the Japanese Yen and the Swiss Franc, while declining marginally against the Euro and Sterling, falling against the New Zealand Dollar and making a new post float low against the Australian Dollar. The price of gold also declined.

Furthermore, a fundamental EURUSD analysis shows the rate fell on Tuesday after St. Louis Federal Reserve’s James Bullard made hawkish statements at an economic conference in Prague. Bullard urged the Fed to begin reversing its loose monetary policy stance by trimming the 600B QE II program by 100B.

Bullard stated that, “One of the things that I’m concerned about is that policy is so easy right now that we have to get started on the process of getting back to normal because it will take a long time.” When asked about beginning the process now, he answered, “Yes, we’re still buying treasuries. We’re feeding the fire at this moment.”

The stronger Greenback also saw Cable end marginally lower, as reported in the GBPUSD news, despite a more favorable U.K. Final GDP result, a substantial upward revision to the previous month’s Current Account number and better than expected Net Lending data.

Nevertheless, the New Zealand and Australian Dollar both rose against the Greenback, with risk appetite increasing considerably in the market. This also negatively affected the Japanese Yen, which has once again become the favored funding currency for carry trades.

March 29^th Important Economic Developments:

1. U.K. Current Account, Final GDP and Net Lending Favorable – The U.K. Current Account widened to a deficit of –10.5B versus an expected deficit of –10.3B. Nevertheless, the previous number was significantly revised upward from a deficit of –9.7B to –8.7B. Also, Final Quarterly GDP came in at –0.5%, just above the consensus of –0.6%. Also, Net Lending to Individuals increased to +2.0B m/m from a previous +1.6B and beat the consensus of a +1.2B increase that was expected.

2. Lower Than Expected U.S. CB Consumer Confidence – The Conference Board’s release of the U.S. Consumer Confidence Index came out at 63.4 versus an expected 64.9. Nevertheless, the previous number was revised significantly higher from 70.4 to 72, which neutralized its effect.

3. New Zealand Building Consents Drop – New Zealand Building Consents declined by –9.7% m/m, with the previous number revised downward from +9.6% to +9.1%.

4. German Preliminary CPI Higher – German CPI edged the consensus of a +0.4% increase coming out at +0.5%, further solidifying the recovery in the German economy.

5. Japanese Preliminary Industrial Production Rises – Japanese Industrial Production rose by +0.4% versus an expected flat reading. Nevertheless, the previous number was revised significantly downward from +2.4% to +1.3%, which added to the Yen’s weakness on Tuesday.

March 30^th Forex Events for Traders to Watch

1. U.S. ADP Non-Farm Employment Change – Automatic Data Processing will release its important Non-Farm Employment Change indicator on Wednesday that could shed light on Friday’s key Non-Farm Payrolls data. This leading employment indicator is currently expected to fall to 205K from the 217K level seen the previous month. A lower than expected result can weaken the Greenback substantially.
2. U.K. CBI Realized Sales – The Confederation of British Industry is expected to release its Realized Sales diffusion index that measures sales volumes in the U.K. The CBI Realized Sales index level is forecast to fall below zero this month for the first time since June of 2010 to -1, versus the 6 print seen last month. A significantly higher than expected number could boost Sterling.
3. Swiss KOF Economic Barometer – The KOF Economic Research Agency is scheduled to release its composite index based on 12 indicators that is designed to predict the direction of the Swiss economy over the coming six months. The KOF Economic Barometer is expected to fall to 2.16 versus its former 2.18 level. A notably lower than expected result tends to weaken the Swiss Franc.
4. Canadian RMPI – Statistics Canada will release the latest value of its Raw Materials Price Index experienced by manufacturers. The RMPI is expected to rise 0.6% on the month versus the 0.3% gain seen last month. A higher number than forecast may strengthen the Loonie.
5. MPC Member Fisher Speaks – BOE Executive Director and Monetary Policy Committee voting member Paul Fisher is scheduled to talk in Manchester, England at the University Economics Seminar. Unexpectedly hawkish comments from this important U.K. monetary policymaker could significantly strengthen Sterling.