Forex Analysis
by ForexNewsNow Team on March 29th, 2011

ForexNewsNow Daily Market Overview for March 28th, 2011

NEW YORK (Forex News Now) – Daily Market Overview – The daily forex news showed the U.S. Dollar continued mixed against the major foreign currencies on Monday. The Greenback rose against Sterling, the Aussie, Kiwi and Yen while losing ground against the Euro, the Swiss Franc and Canadian Dollar. The price of gold also came down sharply after making a new all time high last week.

EURUSD analysis had the rate falling sharply early in the session after Germany’s Christian Democratic Union party headed by Chancellor Angela Merkel fell short of gaining a majority vote in state elections ending the party’s 58 year dominance. EURUSD then recovered all of its losses later in the session after hawkish comments by ECB President Jean Claude Trichet, which he made at the Academy of Sciences in Paris.

GBPUSD news showed Cable made a new recent low after comments by MPC member Adam Posen, who stated that U.K. inflation, which is currently running at 4.4% would fall back to 1.5% by mid 2012 and would be “back to target if we put the economy through the wringer”. Nevertheless, Sterling recovered later in the session closing moderately lower.

Elsewhere, the New Zealand Dollar lost ground after New Zealand reported a lower than expected Trade Balance. Also, the Australian Dollar closed the session lower after making a new post float high of 1.0313 closing the session at 1.0242. In addition, USDJPY rose initially and then range traded at higher levels for the remainder of Monday’s session.

March 28th Important Economic Developments:

1. ECB President Trichet Reiterates Hawkish Stance – The Euro surged after trading as low as 1.4020 rising sharply to a high of 1.4119 after Trichet stated that “Inflation rates are now durably above the common definition of price stability in the Eurozone.”

2. U.S. Pending Home Surprise Market – Pending Home Sales rose by +2.1% versus an expected decline –0.5% giving support to the Greenback.

3. New Zealand Trade Balance Disappoints – The New Zealand Trade Balance came out showing a surplus of +194M which was significantly lower than the +238M the market was expecting, Also, the previous number was revised significantly lower from a surplus of +11M to a deficit of –3M.

4. Japanese Retail Sales and Unemployment Rate Improve – Japanese Retail Sales rose by +1.1% versus an expected decline of –0.4%, while the Japanese Unemployment rate declined to 4.6% from an expected 4.9%.

5. The Price of Gold Drops – The price of gold dropped sharply to $1,410.10 per ounce after making new all time highs last week, weighing considerably on the commodity dollars.

March 29th Forex Events for Traders to Watch

  1. U.K. Current Account and Final Quarterly GDP – The U.K. Current Account is expected to widen considerably to -10.3B from last month’s -8.7B deficit. Also, Final GDP for the last quarter of 2010 is expected to decline by -0.6%, in line with the earlier preliminary GDP release. A significantly higher than expected number could boost Sterling.
  2. U.S. CB Consumer Confidence – The Conference Board will release its important Consumer Confidence Index based on a survey of around 5,000 households on Tuesday. This leading indicator is currently expected to fall to 64.9 from the 70.4 level seen the previous month. A lower than expected index can weaken the Greenback.
  3. New Zealand Building Consents – New Zealand Building Consents is due out that last rose by 9.6% on the month.. Given the Kiwi’s recent strength, it may rise significantly if the number shows an improvement.
  4. German Preliminary CPI – German CPI is expected to rise 0.4% on the month versus the 0.5% gain seen last month. A higher number may strengthen the nascent rally in EURUSD.
  5. Japanese Preliminary Industrial Production – A flat reading is expected for Industrial Production in Japan this month versus last month’s 2.4% rise that was revised down to 1.3%. A lower than expected number could weaken the Yen further.

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