Euro Outlook for January 2011 Versus the U.S. Dollar, Pound and Swiss Franc

ForexNewsNow | Published on January 3, 2011 at 2:29 pm

NEW YORK (Forex News Now) – January looks set to be an important month for the Euro’s fortunes since a currency’s initial performance often sets the currency market trading tone for the rest of the year.

Recent trends have seen EUR/USD consolidate, EUR/GBP rise and EUR/CHF fall, so deviations from these established directions during January could significantly enliven the online forex news.

Key Upcoming Events in the Eurozone, United States, Britain and Switzerland

Fundamental EUR/USD analysis attention will continue to focus on debt auctions and financial troubles. The ECB is expected to keep its Minimum Bid Rate unchanged at the 1.0% level that it has maintained since May, 2009 at its Rate Decision on the 13th. The German ZEW Economic Sentiment and the Ifo Business Climate surveys out on the 18th and 20th respectively are also important — especially if their recent positive trend reverses.

Key U.S. data coming up in January that could impact EUR/USD and prompt daily forex news reports includes this Friday’s U.S. Employment Report. The Non Farm Payrolls number is forecast to improve by 136K from December’s 39K result, and the Unemployment Rate is expected to improve to 9.7% from December’s 9.8% release. Also important are the U.S. Trade Balance out on the 13th and the CPI and Retail Sales numbers out the following day. The FOMC Minutes are due out on the 4th, while the U.S. Rate Decision and associated FOMC Statement are scheduled for the 26th.

The U.K.’s January economic calendar features the Rate Statement and Decision from the BOE on the 13th and the MPC Meeting Minutes on the 26th. The BOE is expected to keep its Official Bank Rate and Asset Purchase Facility steady, although recent dissention in the MPC could surprise the market. Furthermore, inflation, sales and housing market data will continue to be a focus for EUR/GBP traders, with special emphasis placed on the Halifax HPI on the 5th (-0.3% m/m expected) and the Nationwide HPI on the 27th, as well as PPI Input and CPI on the 14th and 18th respectively, and Retail Sales on Jan 21st.

With respect to EUR/CHF, global financial leaders gather at the World Economic Forum or WEF in Davos, Switzerland from the 26th to the 30th. Most of these meetings are open to the press, and financial officials often speak to reporters which can create interesting fx trading news stories and volatility. Also, Euro Swissy traders will note Swiss Retail Sales data due out on the 13th, plus the KOF Economic Barometer on the 27th.

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