DailyFX - DailyFX Daily Briefing - US

Sterling To Consolidate Further On Dovish BoE, Euro Correction On Tap

David Song, Currency Analyst — Wed, 16 May 2012 13:35:00 GMT

The British Pound struggled to hold its ground on Wednesday as the Bank of England struck a dovish tone for monetary policy, and the GBPUSD may continue to consolidate over the remainder of the week as it fails to maintain the upward trend from earlier this year.

Talking Points

British Pound: BoE Curbs Growth, Inflation Forecast – 1.5800 In Sight
Euro: Eyes 23.6% Fib For Support, IMF Strikes Cautious Tone For Italy
U.S. Dollar: Index Approaches December High, FOMC Minutes In Focus

British Pound: BoE Curbs Growth, Inflation Forecast – 1.5800 In Sight

The British Pound tumbled to a fresh monthly low of 1.5888 as the Bank of England kept the door open to expand monetary policy further, and the sterling may face additional headwinds over the near-term as the spillover effects from the sovereign debt crisis dampens the outlook for the region. Indeed, the BoE curbed its growth forecast and saw a risk of undershooting the 2% target on the back of subdued wage growth, but went onto say that the ‘big picture’ has not changed from February as policy makers expect to see a gradual recovery in Britain.

At the same time, the central bank warned of a disorderly outcome in the euro-area as the governments operating under the single-currency struggle to meet on common ground, and it seems as though the Monetary Policy Committee will carry its wait-and-see approach into the second-half of the year in an effort to shield the U.K. economy. Nevertheless, the BoE continued to highlight the stickiness in price growth as they see inflation staying above target through 2013, and it may become increasingly difficult for the central bank to defend its stance as underlying price pressures resurface. As the GBPUSD fails to maintain the upward trending channel from earlier this year, we expect to see a test of the 1.5800 figure for support, and the pair may trade sideways ahead of the BoE Minutes due out next week as market participants weigh the prospects for monetary policy.

Euro: Eyes 23.6% Fib For Support, IMF Strikes Cautious Tone For Italy

The Euro snapped back from an overnight low of 1.2680 amid the rebound in risk sentiment, but the single currency may face additional headwinds going into the end of the week as heightening finance costs across the region raise the risk for contagion. Indeed, the yield tied to Italy’s 10-Year debt breached 6% while the 10-year spread between Spain and German bonds widened to 500bp for the first time since November, and the ongoing turmoil in the region continues to cast a bearish outlook for the EURUSD as European policy makers struggle to restore investor confidence. In response, the International Monetary Fund argued that ‘a lot remains to be done’ in Italy as the group sees the region contracting in 2012, and the European Central Bank may come under increased pressure to expand monetary policy further as the region continues to face a risk for a prolonged recession. As we expect the ECB to carry its easing cycle into the second-half of the year, we will preserve our bearish outlook for the EURUSD, but the pair looks poised for a short-term correction as the recent decline remains oversold. As the euro-dollar comes up against the 23.6% Fibonacci retracement from the 2009 high to the 2010 low around 1.2640-50, we may see the figure provide interim support, but we will need to see the relative strength index cross back above 30 to see a meaningful rebound in the exchange rate.

U.S. Dollar: Index Approaches December High, FOMC Minutes In Focus

The greenback continued to gain ground on Wednesday, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) rallying to a fresh monthly high of 10,100, but we’re seeing the reserve currency consolidate ahead of the FOMC Minutes as market participants weigh the prospects for monetary policy. As Fed officials take note of the more robust recovery paired with the stickiness in price growth, the central bank may sound more hawkish this time around, and we may see the committee continue to talk down speculation for another large-scale asset purchase program as the world’s largest economy gets on a more sustainable path. However, we may see Fed Chairman Ben Bernanke keep the door open to expand monetary policy further as the sovereign debt crisis continues to pose a threat to the global financial system, and we may see the central bank head renew expectations for additional monetary support as Mr. Bernanke continues to highlight the ongoing weakness in the private sector. In turn, a dovish statement could spark a short-term correction in the USD, and the dollar may consolidate going into the end of the week as the rally from the beginning of the month remains overbought.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

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FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
USD	14:30	10:30	DOE U.S. Crude Oil Inventories (MAY 11)	1750K	3652K
USD	14:30	10:30	DOE U.S. Gasoline Inventories (MAY 11)	-100K	-2613K
USD	14:30	10:30	DOE U.S. Distillate Inventory (MAY 11)	150K	-3251K
USD	16:30	12:30	Fed's James Bullard Speaks on U.S. Economy
USD	18:00	14:00	Federal Open Market Committee Meeting Minutes
NZD	22:00	18:00	ANZ Job Ads (MoM) (APR)		-1.0%
NZD	22:45	18:45	Producer Prices- Inputs (QoQ) (1Q)	0.0%	0.5%
NZD	22:45	18:45	Producer Prices- Outputs (QoQ) (1Q)	0.0%	0.1%

EUR Tumbles As Greece Fails To Form Government, GBP To Resume Rally

David Song, Currency Analyst — Tue, 15 May 2012 13:40:00 GMT

Market sentiment weakened further on Tuesday as Greece failed to form a coalition government, and the shift away from risk-taking behavior may gather pace during the North American trade as the ongoing turmoil in Europe drags on investor confidence.

Talking Points

Euro: Greece Fails To Form Government, ECB Conference In Focus
British Pound: BoE To Preserve Easing Cycle, Lower Growth Forecast
U.S. Dollar: FOMC To Sound More Hawkish On Sticky Inflation, Faster Growth

Euro: Greece Fails To Form Government, ECB Conference In Focus

The Euro pared the overnightadvance to 1.2868 as Greece fails to form a coalition government, and the single currency should continue to give back the advance from earlier this year as the fundamental outlook for the region turns increasingly bleak. As European policy makers struggle to meet on common ground, the risks surrounding the new election mixed with fears of a Greek exit continues to cast a bearish outlook for the single currency, and we may see the European Central Bank try to talk up market sentiment as the group is scheduled to hold its monetary policy conference on Wednesday at 13:00 GMT.

As the governments operating under the fixed-exchange rate system become increasingly reliant on monetary support, the ECB may show a greater willingness to carry its easing cycle into the second-half of the year, and we may see the central bank target the benchmark interest rate as its non-standard measures have a limited impact in stemming the risk for contagion. As the recent decline in the EURUSD remains oversold, the pair looks poised for a short-term correction, but we should see the pair track lower until the relative strength index climbs back above 30. In turn, we should see the euro-dollar continue to retrace the advance from earlier this year, and we are still looking for a test of the 23.6% Fibonacci retracement from the 2009 high to the 2010 low around 1.2640-50 as the fundamental outlook for the region turns increasingly bleak.

British Pound: BoE To Preserve Easing Cycle, Lower Growth Forecast

The British Pound slipped to a fresh monthly low of 1.6018 as market participants scaled back their appetite for risk, and we may see the GBPUSD threaten the upward trend from earlier this year as market participants see the Bank of England carrying its easing cycle into the second-half of the year. As the U.K. faces a double-dip recession, there’s speculation that the BoE will curb its growth forecast and leave the door open to expand its balance sheet further, but the central bank may sound a bit more hawkish this time around amid the stickiness in underlying inflation. In turn, we may see a growing rift in within the Monetary Policy Committee, but we anticipate to see the group move away from its easing cycle as its credibility for price stability remains under scrutiny. In turn, we will maintain out bullish call for the GBPUSD, and we should see the short-term correction taper off going into the middle of the week as the pair comes up against former resistance around 1.6000, which should act as new support.

U.S. Dollar: FOMC To Sound More Hawkish On Sticky Inflation, Faster Growth

The greenback extended the rally from earlier this week, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) advancing to a fresh monthly high of 10,070, and the reserve currency may track higher throughout the North American trade as the flight to safety picks up. Indeed, the developments coming out of the world’s largest economy continues to instill a bullish outlook for the dollar as it dampens the prospects for another large-scale asset purchase program. In turn, the FOMC meeting minutes on tap for Wednesday may highlight an improved outlook for the U.S., and a less dovish statement should increase the appeal of the reserve currency as market participants raise bets for a rate hike.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Resume the Downward Trend From 2011? Join us in the Forum

Related Articles: Weekly Currency Trading Forecast

FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
USD	14:00	10:00	Business Inventories (MAR)	0.5%	0.6%
USD	14:00	10:00	NAHB Housing Market Index (MAY)	26	25

Currency	GMT	Release	Expected	Actual	Comments
AUD	1:30	New Motor Vehicle Sales (MoM) (APR)		-0.7%	Contracts for first time in 4 months.
AUD	1:30	New Motor Vehicle Sales (YoY) (APR)		7.3%
NZD	3:00	Non Resident Bond Holdings (APR)		62.1%	Highest since September.
JPY	5:00	Consumer Confidence (APR)	40.8	40.0	Weakens for the first time since April.
EUR	5:30	French GDP (QoQ) (1Q P)	0.0%	0.0%	Fourth quarter of slowing growth.
EUR	5:30	French GDP (YoY) (1Q P)	0.5%	0.3%
EUR	5:30	French CPI(MoM) (APR)	0.2%	0.1%	Lowest rate since July 2011.
EUR	5:30	French CPI (YoY) (APR)	2.2%	2.1%
EUR	5:30	French CPI - EU Harmonised (MoM) (APR)	0.2%	0.2%
EUR	5:30	French CPI - EU Harmonised (YoY) (APR)	2.5%	2.4%
EUR	5:30	French CPI ex Tobacco Index (APR)	124.88	124.8
EUR	6:00	German GDP s.a. (QoQ) (1Q P)	0.1%	0.5%	Reverses previous quarter's contraction.
EUR	6:00	German GDP n.s.a. (YoY) (1Q P)	0.9%	1.7%
EUR	6:00	German GDP w.d.a. (YoY) (1Q P)	0.8%	1.2%
EUR	6:45	French Wages (QoQ) (1Q P)	0.7%	0.9%	Fastest pace of growth since 1Q 2011.
EUR	6:45	French Non-Farm Payrolls (QoQ) (1Q P)	-0.2%	0.1%	Rises for the first time since 2Q 2011.
GBP	8:30	Visible Trade Balance (Pounds) (MAR)	-8.400B	-8.564B	Narrows for the first time since December.
GBP	8:30	Trade Balance Non EU (Pounds) (MAR)	-4.700B	-4.109B
GBP	8:30	Total Trade Balance (Pounds) (MAR)	-2.900B	-2.739B
EUR	9:00	Portugal GDP s.a. (QoQ) (1Q P)	-1.0%	-0.1%	Contracts for sixth quarter.
EUR	9:00	Portugal GDP n.s.a. (YoY) (1Q P)	-3.1%	-2.2%
EUR	9:00	Euro-Zone GDP s.a. (QoQ) (1Q A)	-0.2%	0.0%	Avoids a second quarter of contraction.
EUR	9:00	Euro-Zone GDP s.a. (YoY) (1Q A)	-0.2%	0.0%
EUR	9:00	Euro-Zone ZEW Survey (Economic Sentiment) (MAY)		-2.4	Lowest since February.
EUR	9:00	German ZEW Survey (Economic Sentiment) (MAY)	19.0	10.8	Highest in 9 months.
EUR	9:00	German ZEW Survey (Current Situation) (MAY)	39.0	44.1
EUR	9:00	Greece GDP (YoY) (1Q P)		-6.2%	Contracts for the eighth straight quarter.
USD	12:30	CPI (MoM) (APR)	0.0%	0.0%	Lowest headline reading since February 2011. Core rate holds steady since September 2008.
USD	12:30	CPI (YoY) (APR)	2.3%	2.3%
USD	12:30	CPI ex Food & Energy (MoM) (APR)	0.2%	0.2%
USD	12:30	CPI ex Food & Energy (YoY) (APR)	2.3%	2.3%
USD	12:30	CPI n.s.a. (APR)	229.900	230.085
USD	12:30	CPI Core Index s.a. (APR)		228.984
USD	12:30	Empire Manufacturing (MAY)	9.00	17.09	Two-month high.
USD	12:30	Advance Retail Sales (APR)	0.1%	0.1%	Rises for the fourth consecutive month.
USD	12:30	Advance Retail Sales ex Autos (APR)	0.2%	0.1%
USD	12:30	Advance Retail Sales ex Auto & Gas (APR)	0.3%	0.1%
USD	12:30	Retail Sales "Control Group" (APR)	0.3%	0.4%
USD	13:00	Net Long-term TIC Flows (MAR)	$32.5B	$36.2B	Roses for eight straight motnhs.
USD	13:00	Total Net TIC Flows (MAR)		-49.9B

http://forexforums.dailyfx.com/eur-usd/

EUR Losses To Accelerate On Spain, Greece GBP Outlook Hinges On BoE

David Song, Currency Analyst — Mon, 14 May 2012 13:35:00 GMT

The heightening threaten for contagion paired with the stalemate in Greece continued to sap risk-taking behavior, and the flight to safety may gather pace during the North American trade as European policy makers struggle to restore investor confidence.

Talking Points

Euro: ECB Sees Risk Of Greek Exit, June Forecast To Highlight Prolonged Recession
British Pound: BoE To Stay On Hold Through 2013 As Inflation Report Comes Into Focus
U.S. Dollar: China Cuts RRR By 50bp Ahead Of FOMC Minutes

Euro: ECB Sees Risk Of Greek Exit, June Forecast To Highlight Prolonged Recession

The Euro slipped to a fresh monthly low of 1.2829 as Spain sold EUR 2.9B in bills versus the EUR 3.0B target, while the yield tied to the region’s 10-Year debt advanced to 6.33% from 6.22% following the auction. Beyond the heightening risk for contagion, policy makers in Greece are certainly running out of time as they struggle to form a coalition, and the threat of a Greek exit certainly raises the risk for a major selloff as the fundamental outlook for the region turns increasingly bleak.

Meanwhile, European Central Bank board member Luc Coene said Greece leaving the monetary union ‘would be possible’ according to an interview with the Financial Times, and went onto say that the revised economic forecast scheduled for June may highlighta ‘slight deterioration in growth’ as the region continues to face a risk for a prolonged recession. However, Mr. Coene talked down speculation for additional asset purchases as the non-standard measures have a limited impact in addressing the debt crisis, and it seems as though the Governing Council is looking to target the benchmark interest rate as its ballooning balance sheet comes under scrutiny. As the EURUSD continues to give back the advance from earlier this year, we should see the pair fall back towards the 23.6% Fibonacci retracement from the 2009 high to the 2010 low around 1.2630-50, but we will keep a close eye on the relative strength index as it slips into oversold territory.

British Pound: BoE To Stay On Hold Through 2013 As Inflation Report Comes Into Focus

The British Pound pared the overnight decline to 1.6050 as ongoing turmoil in Europe increased the appeal of the sterling, and the GBPUSD may track higher in the coming days should the Bank of England highlight an improved outlook for the U.K. As the BoE’s quarter inflation report comes into focus, there’s speculation that Governor Mervyn King will keep the benchmark interest rate on hold until late next year, but the central bank head may sound increasingly hawkish this time around as the stickiness in underlying price growth raises the risk for inflation. As the Monetary Policy Committee anticipates to see a more robust recovery in the second-half of 2012, we may see the board start to discuss a tentative exit strategy, and we should see the fresh highs in the GBPUSD as it maintains the upward trend from earlier this year. However, as the short-term correction continues to play out, we are still looking for a test of former resistance around 1.6000 for support, and we may see the pound-dollar continue to consolidate ahead of the BoE inflation report as market participants weigh the outlook for monetary policy.

U.S. Dollar: China Cuts RRR By 50bp Ahead Of FOMC Minutes

The greenback continued to gain ground on Monday, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) rallying to a fresh monthly high of 10,049, and the reserve currency may appreciate further over the next 24-hours of trading as the flight to safety gathers pace. Indeed, the People’s Bank of China’s announcement to cut the reserve requirement ratio by 50bp is having a limited impact on the market as the sovereign debt crisis continues to drag on investor confidence, and we should see risk sentiment continue to dictate price action across the major currencies as the economic docket remains fairly light for the North American session. However, as the Fed’s policy meeting minutes highlight the biggest event risk for this week, we may see the dollar consolidate going into the middle of the week, but the fresh batch of central bank rhetoric may continue to instill a bullish outlook for the greenback should the Fed drop its dovish tone for monetary policy. As the economic recovery gathers pace, we may see the FOMC may hold an improved outlook for the second-half of the year, but we may see a growing rift within the committee as Fed Chairman Ben Bernanke keeps the door open to expand monetary policy further.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Resume the Downward Trend From 2011? Join us in the Forum

Related Articles: Weekly Currency Trading Forecast

FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
CHF	15:45	11:45	SNB President Thomas Jordan Speaks on Swiss Economy	76.0	76.4

Currency	GMT	Release	Expected	Actual	Comments
NZD	22:30	Performance Services Index (APR)		56.7	Highest reading since March ‘10.
NZD	22:45	Retail Sales ex Inflation (QoQ) (1Q)	-0.5%	-1.5%	Contracts for first time in 5 months and by most since March ‘09.
JPY	23:50	Domestic Corporate Goods Price Index (MoM) (APR)	0.1%	0.3%	Contracts for first time since Sept ‘10.
JPY	23:50	Domestic Corporate Goods Price Index (YoY) (APR)	-0.3%	-0.2%
AUD	1:30	Home Loans (MAR)	-2.0%	0.3%	Gains for first time in 3 months.
AUD	1:30	Investment Lending (MAR)		-1.0%
AUD	1:30	Value of Loans (MoM) (MAR)		-0.3%
EUR	6:00	German Wholesale Price Index (MoM) (APR)		0.5%	Gains for fourth month.
EUR	6:00	German Wholesale Price Index (YoY) (APR)		2.4%
EUR	6:45	French Current Account (euros) (MAR)		-4.1B	Deficit narrows for first time in 4 months.
CHF	7:15	Producer & Import Prices (MoM) (APR)	0.2%	-0.1%	Contracts for first time in 5 months.
CHF	7:15	Producer & Import Prices (YoY) (APR)	-2.1%	-2.3%
EUR	8:00	Italian CPI (NIC incl. tobacco) (MoM) (APR F)	0.5%	0.5%	Unchanged for third month.
EUR	8:00	Italian CPI (NIC incl. tobacco) (YoY) (APR F)	3.3%	3.3%
EUR	8:00	Italian CPI - EU Harmonized (MoM) (APR F)	0.9%	0.9%
EUR	8:00	Italian CPI - EU Harmonized (YoY) (APR F)	3.8%	3.8%
EUR	8:30	Italian General Government Debt (MAR)		1946.1B	Record high debt.
EUR	9:00	Euro-Zone Industrial Production s.a. (MoM) (MAR)	0.4%	-0.3%	Contracts for the fourth month.
EUR	9:00	Euro-Zone Industrial Production w.d.a. (YoY) (MAR)	-1.4%	-2.2%

Euro Weighed By Spain, Sterling Outlook Hinges On Inflation Report

David Song, Currency Analyst — Fri, 11 May 2012 13:50:00 GMT

The Euro is struggling to hold its ground on Friday as the EU struck a cautious outlook for the region, and the single currency may face additional headwinds in the week ahead as European policy makers struggle to restore investor confidence.

Talking Points

Euro: Spain To Miss 2012 Deficit Target, Greece To Stay In Monetary Union
British Pound: BoE To Sound Increasingly Hawkish Despite Growth Concerns
U.S. Dollar: U. of Michigan On Tap, Sticky Core CPI To Spur Hawkish Remarks

Euro: Spain To Miss 2012 Deficit Target, Greece To Stay In Monetary Union

The Euro gave back the overnight advance to 1.2955 as the EU sees Spain missing its 2012 deficit target of 5.3%, and the heightening risk for contagion continues to cast a bearish outlook for the single currency as European policy makers maintain a reactionary approach in addressing the debt crisis. Meanwhile, the head of Greece’s New Democratic Party, Antonis Samaras, said the four parties agreed to stay in the union, but anti-austerity movement may continue to fuel speculation for a euro-area exit as the region struggles to draw up a coalition government.

As the EU struggles to meet on common ground, we are likely to see the governments operating under the single currency become increasingly reliant on monetary support, and the European Central Bank may face increased pressure to carry its easing cycle into the second-half of the year as the fundamental outlook for the region turns increasingly bleak. As the economic docket for the following week is expected to show the euro-area contracting 0.2% in the first-quarter, a dismal growth report is likely to fuel speculation for additional monetary support, and we should see the bearish formation in the EURUSD continue to take shape as the pair struggles to get back above former support around 1.3000. In turn, we should see the Euro continue to fall back towards the 23.6% Fibonacci retracement from the 2009 high to the 2010 low around 1.2630-50, but we will keep a close eye on the relative strength index as it approaches oversold territory.

British Pound: BoE To Sound Increasingly Hawkish Despite Growth Concerns

The British Pound continued to give back the advance from the previous month, with the GBPUSD slipping to a fresh monthly low of 1.6061, but we may see the sterling regain its footing next week should the Bank of England strike a hawkish tone for monetary policy. Indeed, the quarterly inflation report highlights the biggest event risk for the sterling, and we may see the central bank lay out a tentative exit strategy as the stickiness in underlying price growth raises the risk for inflation. However, there’s speculation that the BoE will curb its growth forecast as the region slips back into recession, and we may see the central bank endorse its wait-and-see approach for the second-half of the year as the ongoing turmoil in the euro-area – the U.K.’s largest trading partner – continues to pose a risk for the region. As the short-term correction in the GBPUSD gathers pace, we may see the RSI struggle to maintain the upward trend from earlier this year, but we should see former support around 1.6000 act as new resistance as the pair continues to carve a series of higher highs paired with higher lows.

U.S. Dollar: U. of Michigan On Tap, Sticky Core CPI To Spur Hawkish Remarks

The greenback extended the advance from earlier this week, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) advancing to a fresh monthly high of 10,014, and the reserve currency looks poised to track higher in the coming days as it maintains the upward trend from the beginning of May. As market participants scale back their appetite for risk, a downturn in the U. of Michigan Confidence survey could fuel the flight to safety, and the greenback may track higher throughout the remainder of the day as it benefits from safe-haven flows. Although the economic docket for the following week is expected to show the headline reading for inflation falling back to 2.4% from 2.7% in April, the stickiness in the core CPI may encourage the Fed to adopt a hawkish tone for monetary policy, and we should see the dollar track higher throughout 2012 as the central bank moves away from its easing cycle.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Resume the Downward Trend From 2011? Join us in the Forum

Related Articles: Weekly Currency Trading Forecast

FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
USD	13:55	9:55	U. of Michigan Confidence (MAY P)	76.0	76.4

Sterling Eyes Fresh 2012 Highs On BoE Policy, Euro Correction On Tap

David Song, Currency Analyst — Thu, 10 May 2012 13:15:00 GMT

The British Pound bounced back on Thursday as the Bank of England moved away from its easing cycle and the GBPUSD should continue to mark fresh 2012 highs as market participants start to look for a rate hike.

Talking Points

British Pound: BoE Halts QE, Quarterly Inflation Report In Focus
Euro: Growth To Slow Further, ECB To Maintain Easing Cycle
U.S. Dollar: Correction In Play, Fed Sees Improving Credit Conditions

British Pound: BoE Halts QE, Quarterly Inflation Report In Focus

The British Pound rallied to 1.6172 as the Bank of England maintained its current policy in May, and it seems as though the central bank is bringing its easing cycle to an end as it completes the GBP 325B in quantitative easing. As the BoE refrains from releasing a policy statement, market participants are certainty turning their attention to the meeting minutes due out on May 23, but the quarter inflation report on tap for the following week could spark fresh highs in the GBPUSD should the central bank raise its fundamental assessment for the U.K.

As BoE officials expect to see a faster recovery in the second-half of 2012, we should see the central bank adopt a hawkish tone for monetary policy, and we may see the Monetary Policy Committee start to discuss a tentative exit strategy as the stickiness in underlying price growth raises the risk for inflation. According to Credit Suisse overnight index swaps, market participants are starting to price a rate hike for the next 12-months, but we may see a growing rift within the MPC as the economy slips back into recession. Nevertheless, we will maintain a bullish outlook for the GBPUSD as the pair looks to be carving out a higher low around the 1.6100 figure, and upward trending channel from earlier this year should continue to take shape as the central bank looks to start normalizing monetary policy.

Euro: Growth To Slow Further, ECB To Maintain Easing Cycle

The Euro snapped back from 1.2922 amid the rebound in market sentiment, but the single currency remains at risk for further declines as the fundamental outlook for the region turns increasingly bleak. Indeed, the European Central Bank’s monthly report instilled a weakening outlook for growth as the economy is now expected to contract 0.2% this year versus an initial forecast for a 0.1% decline in GDP, and the threat for a deeper recession may encourage the Governing Council to carry its easing cycle into the second-half of the year as the sovereign debt crisis continues to drag on the real economy. As the governments operating under the single currency continue to look for additional monetary support, we should see the bearish formation in the EURUSD continue to pan out in the days ahead, and we should see the pair give back the advance from earlier this year, which could open the door for a test of the 23.6% Fibonacci retracement from the 2009 high to the 2010 low around 1.2630-50. However, as the relative strength index approaches oversold territory, we may see a short-term correction in the exchange rate, and we may see the euro-dollar make a run at the 38.2% Fib around 1.3100 before carving out a lower low.

U.S. Dollar: Correction In Play, Fed Sees Improving Credit Conditions

The greenback is giving back the advance from earlier this month, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) slipping to a low 9,955 on Thursday, and the reserve currency may continue to consolidate over the remainder of week as market participants increase their appetite for risk. However, as Fed policy makers continue to strike an improved outlook for the world’s largest economy, easing bets for another round of quantitative easing continues to instill a bullish outlook for the reserve currency, and we should see the central bank scale back its dovish tone for monetary policy as growth and inflation picks up. Indeed, Fed Chairman Ben Bernanke said credit conditions in the U.S. have improved significantly although lending in some sectors remain tight, and went onto say that commercial banks ‘still have more to do to restore their health and adapt to the post-crisis regulatory and economic environment’ amid the ongoing turmoil in the world financial system.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Resume the Downward Trend From 2011? Join us in the Forum

Related Articles: Weekly Currency Trading Forecast

FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
USD	13:30	9:30	Fed Chairman Ben Bernanke Speaks on Banking System
GBP	14:00	10:00	NIESR Gross Domestic Product Estimate (APR)		0.1%
USD	17:20	13:20	Fed's Narayana Kocherlakota Speaks on Monetary Policy
USD	18:00	14:00	Monthly Budget Statement (APR)	$30.0B	- -
NZD	22:45	18:45	Food Prices (MoM) (APR)		-1.0%

Currency	GMT	Release	Expected	Actual	Comments
NZD	22:30	Business NZ Performance of Manufacturing Index (APR)		48.0	First dip below 50 in 5 months.
JPY	23:50	Trade Balance - BOP Basis (Yen) (MAR)	-42.8B	4.2B	Largest current account surplus in 6 months.
JPY	23:50	Adjusted Current Account Total (Yen) (MAR)	647.7B	785.5B
JPY	23:50	Current Account Balance (YoY) (MAR)	-17.1%	-8.6%
JPY	23:50	Current Account Total (Yen) (MAR)	1431.3B	1589.4B
JPY	23:50	Bank Lending Banks ex Trust (YoY) (APR)		0.4%	Marks sixth month of gains.
JPY	23:50	Bank Lending Banks inc Trusts (YoY) (APR)		0.3%
NZD	0:00	QV House Prices (YoY) (APR)		3.1%	Biggest gain since August 2010.
AUD	1:30	Employment Change (APR)	-5.0K	15.5K	Lowest jobless rate since June 2011.
AUD	1:30	Unemployment Rate (APR)	5.3%	4.9%
AUD	1:30	Full Time Employment Change (APR)		-10.5K
AUD	1:30	Part Time Employment Change (APR)		26.0K
AUD	1:30	Participation Rate (APR)	65.4%	65.2%
JPY	2:00	Tokyo Average Office Vacancies (APR)		9.23	Highest since the series began in 1990.
JPY	4:30	Bankruptcies (YoY) (APR)		-6.7%	Falls for second month.
JPY	5:00	Eco Watchers Survey: Outlook (APR)		50.9	Highest since April 2007.
JPY	5:00	Eco Watchers Survey: Current (APR)		50.9
EUR	6:45	French Industrial Production (MoM) (MAR)	-0.6%	-0.9%	Contracts for first time in 3 months.
EUR	6:45	French Industrial Production (YoY) (MAR)	-1.3%	-0.9%
EUR	6:45	French Manufacturing Production (MoM) (MAR)	-0.2%	1.4%	Grows for first time in 4 months.
EUR	6:45	French Manufacturing Production (YoY) (MAR)	-2.8%	-0.3%
EUR	6:45	French Central Government Balance (euros) (MAR)		-29.4B	Largest deficit since December.
EUR	8:00	Italian Industrial Production s.a. (MoM) (MAR)	0.1%	0.5%	Grows for first time in 3 months.
EUR	8:00	Italian Industrial Production w.d.a. (YoY) (MAR)	-6.2%	-5.8%
EUR	8:00	Italian Industrial Production n.s.a. (YoY) (MAR)		-5.9%
GBP	8:30	Industrial Production (MoM) (MAR)	-0.3%	-0.3%	Contracts for thirteenth month.
GBP	8:30	Industrial Production (YoY) (MAR)	-2.6%	-2.6%
GBP	8:30	Manufacturing Production (MoM) (MAR)	0.5%	0.9%	Grows for first time in 4 months.
GBP	8:30	Manufacturing Production (YoY) (MAR)	-1.3%	-0.9%
GBP	11:00	Bank of England Interest Rate Decision	0.50%	0.50%	Concludes QE amid risk for inflation.
GBP	11:00	Bank of England Asset Purchase Target	325B	325B

Bearish Euro Formation In Play, Sterling Outlook Hinges on BoE

David Song, Currency Analyst — Wed, 09 May 2012 13:30:00 GMT

Increased turmoil in the euro-area continued to sap risk-taking behavior on Wednesday and the flight to safety may gather pace over the remainder of the week as European policy makers struggle to stem the heightening risk for contagion.

Talking Points

Euro: Spanish 10-Year Yield Top 6%, ECB Under Pressure To Ease Further
British Pound: BoE To Maintain Current Policy, Inflation Report On Horizon
U.S. Dollar: Index Approaching 10,000, Fed Rhetoric In Focus

Euro: Spanish 10-Year Yield Top 6%, ECB Under Pressure To Ease Further

The Euro tumbled to fresh monthly low of 1.2934 amid heightening fears surrounding Spain's banking sector, while the yield tied to the region’s 10-Year debt breached 6%, fueling speculation that Spain will ultimately seek a bailout as it struggles to tap the financial markets. At the same time, the deadlock in Greece continues to instill a bearish outlook for the single currency as the region remains far from form a new coalition, and it seems as though the governments operating under the single currency are becoming increasingly reliant on monetary support as the EU maintains a reactionary approach in addressing the sovereign debt crisis.

European Union Economic and Monetary Affairs Commissioner Olli Rehn talked up the ECB’s role and said there is no ‘contradiction in terms of further developing the role of the euro system in ensuring financial stability while at the same time guaranteeing price stability,’ and the Governing Council is likely to face increased pressure to shore up the ailing economy as it remains at risk of a prolonged recession. In turn, we should see the ECB carry its easing cycle into the second-half of the year, and President Mario Draghi may see scope to push the benchmark interest rate below 1.00% as the non-standard measures have a limited impact in addressing the risks surrounding the region. As the EURUSD finally clears 1.3000, we should see the bearish formation pan out in May, and the pair looks poised to fall back towards the 23.6% Fibonacci retracement from the 2009 high to the 2010 low around 1.2630-50 as the fundamental outlook for the euro-area turns increasingly bleak. However, as the relative strength index approaches oversold territory, we may see a short-term correction later this week should the oscillator hold above 30, and we will look to sell rallies in the EURUSD as we anticipate to see a lower low in the exchange rate.

British Pound: BoE To Maintain Current Policy, Inflation Report On Horizon

The British Pound struggled to hold its ground ahead of the Bank of England interest rate decision, with the GBPUSD slipping to a fresh monthly low of 1.6073, but we should see the sterling maintain the upward trend from earlier this year as the central bank moves away from its easing cycle. The British Chambers of Commerce talked down the BoE’s asset purchase program as the nonstandard measure ‘has not led to a meaningful rise in lending to small and medium-sized firms,’ and we may see the central bank sound more hawkish this time around as the stickiness in underlying price growth raises the risk for inflation. However, as the BoE is widely expected to maintain its current policy in May, we may see the central bank refrain from releasing a statement, but the quarterly inflation report due out on May 16 may overshadow the meeting minutes for May 23 as we expect to see the central bank raise its fundamental assessment for the U.K. Nevertheless, we will be keeping a close eye on the vote count as board member Adam Posen scaled back his vote for more QE, and the committee may start to discuss a tentative exit strategy as BoE officials expect to see a more robust recovery in the second-half of 2012.

U.S. Dollar: Index Approaching 10,000, Fed Rhetoric In Focus

The greenback continued to track higher on Wednesday, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) advancing to a fresh weekly high of 9,998, and the reserve currency may appreciate further during the North American trade as the shift away from risk-taking behavior appears to be gathering pace. At the same time, the fresh batch of central bank rhetoric may prop up the dollar as Fed officials take note of the more robust recovery, and we may see the group of policy makers continue to soften their dovish tone for monetary policy as growth and inflation picks up. In turn, we should see the index continue to retrace the decline from earlier this year, and we will preserve our bullish outlook for the greenback as it continues to carve a series of higher lows in 2012.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

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FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
USD	14:00	10:00	Fed's Narayana Kocherlakota Speaks on Monetary Policy
USD	14:00	10:00	Wholesale Inventories (MAR)	0.6%	0.9%
USD	14:30	10:30	DOE U.S. Crude Oil Inventories (MAY 4)		2840K
USD	14:30	10:30	DOE U.S. Gasoline Inventories (MAY 4)		-2009K
USD	14:30	10:30	DOE U.S. Distillate Inventory (MAY 4)		-1903K
USD	14:45	10:45	Fed's Sandra Pianalto Speaks on U.S. Economy
USD	16:00	12:00	Fed's Charles Plosser Speaks on U.S. Economy
NZD	22:30	18:30	Business NZ Performance of Manufacturing Index (APR)		54.5

Currency	GMT	Release	Expected	Actual	Comments
GBP	23:01	BRC Sales Like-For-Like (YoY) (APR)	0.6%	-3.3%	Largest decline since March 2011.
JPY	23:50	Official Reserve Assets (APR)	--	$1289.5B	Rises for the first time since January.
JPY	5:00	Leading Index (MAR P)	96.9	96.6	Highest since January 2008.
JPY	5:00	Coincident Index (MAR P)	96.2	96.5
EUR	6:00	German Trade Balance (euros) (MAR)	14.3B	17.4B	Biggest surplus since March 2011 as exports rose for the third month.
EUR	6:00	German Current Account (euros) (MAR)	18.0B	19.8B
EUR	6:00	German Exports s.a. (MoM) (MAR)	-0.5%	0.9%
EUR	6:00	German Imports s.a. (MoM) (MAR)	1.0%	1.2%
EUR	6:45	French Trade Balance (euros) (MAR)	-6000M	-5721M	Narrows for the first time since November.
USD	11:00	MBA Mortgage Applications (MAY 4)	--	1.7%	Rises for the second week.

Euro Under Pressure Amid Greek Threats, Sterling Supported By BoE

David Song, Currency Analyst — Tue, 08 May 2012 13:15:00 GMT

Heightening fears surrounding the euro-area continued dragged on market sentiment and the shift away from risk-taking behavior may gather pace throughout the North American trade as European policy makers struggle to meet on common ground.

Talking Points

Euro: Greece Threatens To Reject Bailout Terms, Need Close Below 1.3000
British Pound: Former BoE Members Talk Down Bets For More QE
U.S. Dollar: Fed’s Dudley Softens Dovish Tone, Central Bank Hawks On Tap

Euro: Greece Threatens To Reject Bailout Terms, Need Close Below 1.3000

The Euro slipped to 1.2989 as rising finance costs across the European periphery raised the threat for contagion, and the bearish formation in the EURUSD should continue to take shape as the fundamental outlook for the region turns increasingly bleak. Indeed, Greece sold EUR 1.0B in 182-Day bills yielding 4.69%, which compares to the 4.55% offered in April, while Greek policy makers are still making an effort to form a government as Alexis Tsipras of the left wing party threatens to reject the terms of the EU-IMF bailout.

As European policy makers struggle to meet on common ground, the lack of coordination certainly dampens the outlook for the region, and we may see the governments operating under the single currency become increasingly reliant on monetary support as the economy remains at risk for a prolonged recession. According to Credit Suisse overnight index swaps, market participants continue to see scope for a rate cut in the next 12-months as the European Central Bank’s non-standard measures have a limited impact in addressing the sovereign debt crisis, and the single currency is likely to face additional headwinds in the coming days as European policy makers fail to restore investor confidence. As the EURUSD continues to approach the apex of the descending triangle, we are still waiting for a major selloff in the exchange rate, but we would need to see the pair close below support around 1.3000 to reinforce our bearish forecast for the euro-dollar.

British Pound: Former BoE Members Talk Down Bets For More QE

The British Pound weakened to 1.6124 as market participants scaled back their appetite for risk, but the sterling may hold steady ahead of the Bank of England interest rate decision as the GBPUSD trades within the previous day’s range. Indeed, former BoE members Andrew Sentance, John Gieve and Charles Goodhart talked down speculation for more quantitative easing, with Mr. Sentance seeing scope for a rate hike later this year, while Mr. Gieve said the central bank may extend its asset purchase program for ‘a month or two’ amid the ongoing uncertainties surrounding the region. As the Monetary Policy Committee moves away from its easing cycle, we should see the bullish sentiment underlining the sterling gather pace throughout 2012, but we are still looking for a test of former resistance around 1.6000 as the relative strength index continues to come off of overbought territory.

U.S. Dollar: Fed’s Dudley Softens Dovish Tone, Central Bank Hawks On Tap

The greenback pared the decline from the previous day, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) rallying to 9,967, and the reserve currency may appreciate further during the North American trade as the U.S. equity market opens lower. Nevertheless, as Richmond Fed President Jeffrey Lacker and Dallas Fed President Richard Fisher are scheduled to speak later today, hawkish rhetoric from central bank officials should help to prop up the greenback, and we may see the FOMC continue to move away from its easing cycle as the economic recovery gradually gathers pace. Indeed, New York Fed President William Dudley said the FOMC would drop its asset purchase program ‘the moment they become inconsistent with our dual mandate objectives,’ and the committee may continue soften its dovish tone for monetary policy as the stickiness in underlying price growth raises the risk for inflation.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Resume the Downward Trend From 2011? Join us in the Forum

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FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
USD	13:45	9:45	Fed's Jeffrey Lacker Speaks on U.S. Economy
USD	14:00	10:00	IBD/TIPP Economic Optimism (MAY)	48.0	49.3
USD	16:45	12:45	Fed's Richard Fisher Speaks on U.S. Economy
NZD	21:00	17:00	Reserve Bank of New Zealand Publishes Financial Stability Report
NZD	22:45	18:45	Card Spending (MoM) (APR)	0.5%	-0.2%
NZD	22:45	18:45	Card Spending - Retail (MoM) (APR)	0.5%	0.3%
GBP	23:01	19:01	BRC Sales Like-For-Like (YoY) (APR)	0.6%	1.3%

Currency	GMT	Release	Expected	Actual	Comments
AUD	1:30	Trade Balance (Australian dollar) (MAR)	-1300M	-1587M	Largest deficit since October 2009.
EUR	10:00	German Industrial Production s.a. (MoM) (MAR)	0.8%	2.8%	Biggest advance since July.
EUR	10:00	German Industrial Production n.s.a. and w.d.a. (YoY) (MAR)	-1.2%	1.6%
USD	11:30	NFIB Small Business Optimism (APR)	93.0	94.5	Highest since February 2011.
CAD	12:15	Housing Starts (APR)	204.0K	244.9K	Highest since September 2007.

EUR Bearish Pattern Continues To Take Shape, GBP Correction In Focus

David Song, Currency Analyst — Mon, 07 May 2012 13:25:00 GMT

Market sentiment waned on Monday as the political shift in France and Greece raised the risk for a euro-area breakup, and the shift away from risk-taking behavior may gather pace during the North American trade as the heightening risk for contagion continues to drag on investor confidence.

Talking Points

Euro: French, Greek Elections Raises Risk For Breakup – 1.3000 Crucial
British Pound: Correction In Focus, BoE To Discuss Exit Strategy
U.S. Dollar: Fed’s Lacker To Talk Down QE3, Consumer Credit On Tap

Euro: French, Greek Elections Raises Risk For Breakup – 1.3000 Crucial

The Euro tumbled to a fresh monthly low of 1.2954 as French President Francois Hollande overtook Nicolas Sarkozy as the president of France, while the two main parties in Greece failed to obtain a joint majority, and the political uncertainties surrounding the region casts a bearish outlook for the EURUSD as it struggles to hold above interim support (1.3000). As President Hollande challenges the budget-cutting measures and looks toward fiscal stimulus to strengthen the economy, the shift in leadership certainly undermines the efforts to address the sovereign debt crisis, and it seems as though Greece may ultimately leave the monetary union as government officials shun austerity.

As the fiscal situation in Europe turn increasingly bleak, we should see the European Central Bank take additional steps to shore up the ailing economy, and the Governing Council may face increased pressure to push the benchmark interest rate below 1.00% in order to dampen the risk for a prolonged recession. As the bearish formation in the EURUSD continues to take shape, we are waiting to see a close below 1.3000 to favor further declines in the exchange rate, and we will preserve our bearish outlook for the pair as price action continues to approach the apex of the descending triangle. In turn, we are still looking for a move back towards the 23.6% Fibonacci retracement from the 2009 high to the 2010 low around 1.2630-50, and the single currency is likely to face additional headwinds this year as European policy makers struggle to meet on common ground.

British Pound: Correction In Focus, BoE To Discuss Exit Strategy

The British Pound regained its footing on Monday, with the GBPUSD bouncing back from an overnight low of 1.6113, and the sterling may track higher throughout the week as the Bank of England moves away from its easing cycle. Indeed, the BoE is widely expected to maintain its current policy stance in May, but we may see a growing rift within the Monetary Policy Committee as central bank officials take note of the stickiness in underlying inflation. As the MPC drops its dovish tone for monetary policy, we should see the committee start to discuss a tentative exit strategy going into the second-half of the year, and Governor Mervyn King may sound a bit more hawkish this time around as policy makers expect to see a stronger recovery later this year. As the short-term correction in the GBPUSD continues to pan out, we are still looking at the 1.6000 figure (former resistance) for near-term support, and the pair looks poised to mark fresh 2012 highs in the coming days as it maintains the upward trend from earlier this year.

U.S. Dollar: Fed’s Lacker To Talk Down QE3, Consumer Credit On Tap

The greenback continued to retrace the decline from April, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) advancing to a high of 9,975, and the reserve currency may appreciate further over the next 24-hours of trading as market participants scale back their appetite for risk. Nevertheless, as consumer credit in the world’s largest economy is expected to increase another $9.800B in March, the ongoing expansion may encourage an improved outlook for the world’s largest economy, while FOMC voting member Jeffrey Lacker may continue to talk down speculation for additional monetary support as the region gets on a more sustainable path. As Fed officials take note of the more robust recovery, we should see the committee continue to soften its dovish tone for monetary policy, and the shift in central bank rhetoric should continue to prop up the greenback as market participants scale back speculation for QE3. As the USDOLLAR carves out a higher low coming into May, the greenback should continue to work its way back towards the 10,000 figure, and we will maintain a bullish outlook for the reserve currency as we expect to see the Fed conclude its easing cycle in 2012.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Resume the Downward Trend From 2011? Join us in the Forum

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FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
USD	19:00	15:00	Consumer Credit (MAR)	$9.750B	$8.735B
GBP	23:01	19:01	BRC Shop Price Index (YoY) (APR)	1.6%	1.5%
GBP	23:01	19:01	RICS House Price Balance (APR)	-11%	-10%
USD	23:15	19:15	Fed's Jeffrey Lacker Speaks on U.S. Economy

Currency	GMT	Release	Expected	Actual	Comments
AUD	23:30	AiG Performance of Construction Index (APR)	--	34.9	Lowest since October.
AUD	1:30	NAB Business Confidence (APR)	--	4	Highest since January.
AUD	1:30	NAB Business Conditions (APR)	--	0
AUD	1:30	Retail Sales s.a. (MoM) (MAR)	0.2%	0.9%	Biggest quarterly rise since 2Q 2009.
AUD	1:30	Retail Sales ex Inflation(QoQ) (1Q)	0.4%	1.8%
AUD	1:30	Building Approvals (MoM) (MAR)	3.0%	7.4%	Largest advance since November.
AUD	1:30	Building Approvals (YoY) (MAR)	-18.0%	-15.0%
AUD	1:30	ANZ Job Advertisements (MoM) (APR)	--	-3.1%	Falls for the first time since December.
CHF	5:45	Unemployment Rate s.a. (APR)	3.1%	3.1%	Highest since February.
CHF	5:45	Unemployment Rate (APR)	3.1%	3.1%
AUD	6:30	Foreign Reserves (Australian dollar) (APR)	--	$47.6B	Narrows for the first time since November.
CHF	7:00	Foreign Currency Reserves (APR)	--	235.6B	Two-month low.
CHF	7:15	Consumer Price Index (MoM) (APR)	0.2%	0.1%	Contracts for the seventh consecutive month.
CHF	7:15	Consumer Price Index (YoY) (APR)	-0.9%	-1.0%
CHF	7:15	CPI - EU Harmonised (MoM) (APR)	--	0.0%
CHF	7:15	CPI - EU Harmonised (YoY) (APR)	--	-1.1%
EUR	8:30	Euro-Zone Sentix Investor Confidence (MAY)	-15.3	-24.5	Lowest since July 2009.
EUR	10:00	German Factory Orders s.a. (MoM) (MAR)	0.5%	2.2%	Biggest rise since October.
EUR	10:00	German Factory Orders n.s.a. (YoY) (MAR)	-2.8%	-1.3%
CAD	12:30	Building Permits (MoM) (MAR)	-1.5%	4.7%	Advances for the second straight month.

USD Struggles On Disappointing NFPs, EUR To Consolidate On Elections

David Song, Currency Analyst — Fri, 04 May 2012 13:55:00 GMT

The U.S. dollar struggled to hold its ground on Friday as the Non-Farm Payrolls fell short of market expectations, and the greenback may consolidate going into the following week as the development renews expectations for QE3.

Talking Points

U.S. Dollar: Non-Farm Payrolls Disappoint, Jobless Rate Contracts
Euro: Consolidates Within Bearish Formation - Greek, French Election In Focus
British Pound: To Consolidate Ahead Of BoE Interest Rate Decision

U.S. Dollar: Non-Farm Payrolls Disappoint, Jobless Rate Contracts

The greenback came under pressure following the dismal Non-Farm Payrolls report, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) paring the overnight advance to 9,922, and the reserve currency may consolidate throughout the North American trade as market participants increase bets for more monetary easing. Indeed, the world’s largest economy added 115K jobs in April following the 154K expansion during the previous month, while the jobless rate unexpectedly slipped to 8.1% from 8.2% as discouraged workers continued to leave the labor force.

Moreover, wage growth slowed during the same period, with the annualized reading falling back to 1.8% from a revised 2.0%, and the slew of weaker-than-expected data may encourage the Fed to carry its easing cycle into the second-half of the year as policy makers look for a stronger recovery. However, as the central bank expects economic activity to gradually gather pace throughout 2012, Fed officials may continue to soften their dovish tone for monetary policy, and the FOMC may start to discuss a tentative exit strategy as growth and inflation picks up. As the USDOLLAR carves out a higher low in May, the short-term rebound in the index should continue to gather pace, and the greenback may continue to retrace the decline from the previous of month as central bank officials become increasingly upbeat towards the economy.

Euro: Consolidates Within Bearish Formation - Greek, French Election In Focus

The Euro snapped back following NFPs, with the EURUSD bouncing back from an overnight low of 1.3120, but we will stick with our bearish forecast for the single currency as the economic docket continues to cast a weakened outlook for the region. As the election in France and Greece come into focus, a shift in leadership may further drag on investor confidence, and we may see the single currency face additional headwinds in the week ahead as the threat for contagion continues to dampen the outlook for the region. As European policy makers struggle to address the risks surrounding the region, fears of a prolonged recession are likely to intensify in May, and we should see the bearish formation in the EURUSD continue to take shape as it carves out a series of lower highs. As price action approaches the apex of the descending triangle, we are looking for a major break to the downside, but the euro-dollar may continue to consolidate in the week ahead as it continues to find support around 1.3000.

British Pound: To Consolidate Ahead Of BoE Interest Rate Decision

The GBPUSD pared the decline to 1.6154 on the back of dollar weakness, but we are still looking for a short-term correction in the exchange rate as the relative strength index continues to come off of overbought territory. As the Bank of England is scheduled to meet next week, we should see the British Pound consolidate ahead of the rate decision, but the central bank may refrain from releasing a policy statement as the Monetary Policy Committee is widely expected to maintain its current policy stance in May. However, as BoE officials take note of the stickiness in underlying inflation, we may see a growing rift within the MPC, and the central bank may ultimately move away from its easing cycle in an effort to restore the credibility on its inflation mandate. Although our near-term bias remains to the upside, we want to see the GBPUSD find support around 1.6000 to see a move higher, and the sterling may mark fresh yearly highs later this month should the BoE Minutes due out on May 23 dampen speculation for more quantitative easing.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Resume the Downward Trend From 2011? Join us in the Forum

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FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
CAD	14:00	10:00	Ivey Purchasing Managers Index s.a.	60.80	63.50
USD	15:25	11:25	Fed's Williams Speaks in Dana Point

EUR Bearish Outlook Reinforced By ECB, GBP Still Needs To Test 1.6000

David Song, Currency Analyst — Thu, 03 May 2012 14:55:00 GMT

The Euro bounced back during the North American trade as the European Central Bank talked down speculation for a rate cut, but the rebound in the EURUSD is likely to be short-lived as the bearish formation continues to take shape.

Talking Points

Euro: ECB Maintains Balanced Tone, Preserves Easing Cycle
British Pound: Correction To Gather Pace, BoE Rate Decision Comes Into Focus
U.S. Dollar: Advances Ahead Of NFPs, FOMC To Adopt Hawkish Tone

Euro: ECB Maintains Balanced Tone, Preserves Easing Cycle

The Euro bounced back from an overnight low of 1.3096 as the ECB held the benchmark interest rate at 1.00% and talked down speculation for additional monetary support, but it seems as though the Governing Council will carry its easing cycle into the following year as it remains premature for the central bank to embark on an exit strategy. Indeed, ECB President Mario Draghi tried to talk down the risks surrounding the region as the central bank expects to see a gradual recovery across the region, but warned that the fundamental outlook for the region has become increasingly uncertain amid the ongoing turmoil in the financial system.

Based on the recent comments, it seems as though the Governing Council remains open to expand monetary policy further in the second-half of the year, and we should see the central bank take additional steps to shore up the ailing economy as the risk for inflation remains ‘broadly balanced.’ As the region continues to face a risk for a prolonged recession, the slowing recovery could dampen price growth throughout 2012, and the weakening outlook for the region continues to reinforce a bearish outlook for the single currency as European policy makers maintain a reactionary approach in addressing the risks surrounding the region. As the EURUSD continues to approach the apex of the descending triangle, we are still waiting for a break of 1.3000 for a larger move to the downside, and we will look to sell rallies in the euro-dollar as the fundamental outlook for the region turns increasingly bleak.

British Pound: Correction To Gather Pace, BoE Rate Decision Comes Into Focus

The British Pound continued to consolidate on Thursday, with the GBPUSD slipping to an overnight low of 1.6158, and the short-term correction should gather pace in the days ahead as the relative strength index continues to come off of overbought territory. However, as the Bank of England decision on tap for May 10 comes into focus, the fresh batch of comments from the central bank should prop up the sterling, and we may see the GBPUSD fall back towards 1.6000 – former resistance – before it resumes the upward trend from earlier this year. As we see the BoE moving away from its easing cycle, the shift in the policy outlook should prop up the British Pound, and we expect to see fresh yearly highs in the GBPUSD as the Monetary Policy Committee sees an increased risk for inflation.

U.S. Dollar: Advances Ahead Of NFPs, FOMC To Adopt Hawkish Tone

The greenback tracked higher ahead of the highly anticipated Non-Farm Payrolls report, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) rallying to a high of 9,923, and the reserve currency may continue to retrace the decline from the previous month should we see a marked improvement in the labor market. Indeed, the drop in initial and continuing jobless claims certainly bodes well for NFP’s, and a strong print could spark a sharp rally in the greenback as it dampens expectations for another round of quantitative easing. In turn, we should see the FOMC sound more hawkish going into the second-half of the year, and the committee may start to outline a tentative exit strategy as the more robust recovery raises the risk for inflation.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

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FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
USD	15:00	11:00	Fed's Williams Speaks on Economy in Santa Barbara
USD	17:00	13:00	Fed's Lockhart Speaks on Economy in Santa Barbara
USD	17:30	13:30	Fed's Plosser speaks on Economy in Santa Barbara

Bearish Euro Formation In Focus, British Pound Searching For Support

David Song, Currency Analyst — Wed, 02 May 2012 13:25:00 GMT

The Euro tumbled lower on Wednesday as the economic docket reinforced a weakening outlook for the region, and the single currency may face additional headwinds over the next 24-hours of trade should the European Central Bank show an increased willingness to expand monetary policy further.

Talking Points

Euro: ECB To Strike Dovish Tone Amid Risk For Prolonged Recession
British Pound: Correction Underway, Outlook Remains Bullish On BoE
U.S. Dollar: Index Testing 9,900, Fed’s Lacker On Tap

Euro: ECB To Strike Dovish Tone Amid Risk For Prolonged Recession

The Euro slipped to a fresh weekly low of 1.3120 as the weakening labor market paired with the drop in manufacturing raised the risk for a prolonged recession, and the EURUSD may continue to retrace the rebound from the previous month as the sovereign debt crisis continues to drag on the real economy. Indeed, Portugal auctioned EUR 1B in 12-month bills yielding 3.908%, which compares to the 3.652% offered back in March, and we may see the European Central Bank sound a bit more dovish this time around as the fundamental outlook for the region turns increasingly bleak.

Although the ECB is widely expected to maintain its current policy stance in May, central bank President Mario Draghi may look to target the benchmark interest rate as the non-standard measures have a limited impact in addressing the risks for the region, and we may see the Governing Council carry its easing cycle into the second-half of the year as the governments operating under the single currency become increasingly reliant on monetary support. As the EURUSD carves out a series of lower highs in April, we will stick by our bearish forecast for the pair, and we are still looking for a sharp selloff in the exchange rate as price action continues to approach the apex of the descending triangle. In turn, we need a meaningful break and a close below 1.3000 to see the bearish formation pan out, and we should see the euro-dollar fall back towards the 23.6% Fibonacci retracement from the 2009 high to the 2010 low around 1.2630-50 as European policy makers struggle to address the risks surrounding the region.

British Pound: Correction Underway, Outlook Remains Bullish On BoE

The British Pound extended the decline from the previous day as market participants scaled back their appetite for risk, and the short-term correction in the GBPUSD may gather pace over the remainder of the week as the relative strength index continues to come off overbought territory. However, as the economic recovery in the U.K. gradually gathers pace, we should see the Bank of England continue to move away from its easing cycle, and we are looking for fresh yearly highs in the GBPUSD as the pair maintains the upward trend from earlier this year. As BoE Governor Mervyn King is scheduled to speak later today, hawkish comments from the central bank head should prop up the sterling, but the GBPUSD may continue to fall back towards former resistance around 1.6000 as it searches for support.

U.S. Dollar: Index Testing 9,900, Fed’s Lacker On Tap

The greenback continued to retrace the decline from the previous month, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) advancing to a high of 9,902, and the reserve currency may appreciate further during the North American trade as the flight to safety gathers pace. As the economic docket remains fairly light for the remainder of the day, we should see risk trends dictate price action across the major currencies, but the fresh batch of comments from Richmond Fed President Jeffery Lacker may spark a bullish reaction in the greenback as the FOMC board member adopts a hawkish tone for monetary policy. As the Fed raises its outlook for growth and inflation, we should see the central bank discuss a tentative exit strategy, and the committee may see scope to start to normalize monetary policy towards the end of the year as the recovery gathers pace.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

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FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
USD	14:00	10:00	Factory Orders	-1.70%	1.30%
USD	14:30	10:30	DOE U.S. Crude Oil Inventories		3978K
USD	14:30	10:30	DOE Cushing OK Crude Inventory		574K
USD	14:30	10:30	DOE U.S. Distillate Inventory		-3052K
USD	14:30	10:30	DOE U.S. Gasoline Inventories		-2235K
USD	16:30	12:30	Fed's Lacker Speaks on Economy in Norfolk
EUR	17:00	13:00	Italian Budget Balance (euros) (YTD)		-28.2B
EUR	17:00	13:00	Italian Budget Balance (euros)		-17.5B
NZD	22:45	18:45	Unemployment Rate	6.20%	6.30%
NZD	22:45	18:45	Employment Change (QoQ)	0.50%	0.10%
NZD	22:45	18:45	Employment Change (YoY)	0.90%	1.60%
NZD	22:45	18:45	Participation Rate (QoQ)	68.30%	68.20%

Currency	GMT	Release	Expected	Actual	Comments
NZD	01:00	ANZ Commodity Price (APR)	--	-4.5%	Falls for second month.
JPY	01:30	Labor Cash Earnings (YoY) (MAR)	0.2%	1.3%	Largest advance since July 2010.
CNY	02:30	HSBC Manufacturing PMI (APR)	--	49.3	Contracts for the sixth month.
CHF	07:30	SVME-Purchasing Managers Index (APR)	51.0	46.9	Lowest print since November.
EUR	07:45	Italian Purchasing Manager Index Manufacturing (APR)	47.1	43.8	Contracts for the second month.
EUR	07:50	French Purchasing Manager Index Manufacturing (APR F)	47.3	46.9
EUR	07:55	German Purchasing Manager Index Manufacturing	46.3	46.2
EUR	07:55	German Unemployment Change (APR)	-10K	19K	Rises for the second time this year.
EUR	07:55	German Unemployment Rate s.a. (APR)	6.7%	6.8%
EUR	08:00	Italy Unemployment Rate (SA) (MAR P)	9.4%	9.8%	Highest since 2000.
EUR	08:00	Euro-Zone Purchasing Manager Index Manufacturing (APR)	46.0	45.9	Lowest since June 2009.
GBP	08:30	Purchasing Manager Index Construction (APR)	54.0	55.8	Slows for the first time since January.
GBP	08:30	Mortgage Approvals (MAR)	48.0K	49.9K	Holds below 50K for the second month.
GBP	08:30	Net Consumer Credit (MAR)	0.3B	0.4B
GBP	08:30	Net Lending Sec. on Dwellings (MAR)	1.0B	1.0B
GBP	08:30	M4 Money Supply (MoM) (MAR)	--	-0.8%	Contracts for the second straight month.
GBP	08:30	M4 Money Supply (YoY) (MAR)	--	-5.0%
GBP	08:30	M4 Ex IOFCs 3M Annualised (MAR)	--	6.4%
EUR	09:00	Euro-Zone Unemployment Rate (MAR)	10.9%	10.9%	Rises to a 15-year high.
EUR	09:00	Italy Producer Price Index (MoM) (MAR)	0.6%	0.3%	Slowest pace of growth since March 2010.
EUR	09:00	Italy Producer Price Index (YoY) (MAR)	3.0%	2.7%
USD	11:00	MBA Mortgage Applications (APR 27)	--	0.1%	Rises for the second time in April.
USD	12:15	ADP Employment Change (APR)	170K	119K	Smallest advance since September.

EUR Threatens Bearish Formation On Holiday Trade, GBP Carving Top

David Song, Currency Analyst — Tue, 01 May 2012 13:30:00 GMT

Market sentiment appears to be picking up in light of the holiday trade, but the rebound in risk-taking behavior is likely to be short-lived as the ongoing turmoil in the Europe continues to dampen the outlook for the global economy.

Talking Points

Euro: Threatens Descending Triangle, Spain Bond Auction In Focus
British Pound: U.K. Manufacturing Cools, RSI Falls Back From Overbought
U.S. Dollar: ISM Manufacturing On Tap, Watching Employment Component

Euro: Threatens Descending Triangle, Spain Bond Auction In Focus

The Euro climbed to a fresh weekly high of 1.3277 even as most of Europe and Asia were offline on Tuesday, and the rebound may gather pace during the holiday trade as the pair threatens the bearish formation from earlier this year. However, as Spain is scheduled to auction three and five-year debt on Thursday, we may see the euro-dollar consolidate going into the middle of the week, and the results is likely to reinforce a bearish outlook for the single currency as the periphery countries continue to face heightening finance costs.

Meanwhile, Euro Group President Jean-Claude Juncker announced that he will be leaving his post as European policy makers struggle to meet on common ground, and the ongoing rift within the EU casts a bearish outlook for the EURUSD as the governments operating under the single currency become increasingly reliant on monetary support. As the sovereign debt crisis continues to heighten the risk for a prolonged recession, we expect to see the European Central Bank carry out its easing cycle throughout 2012, and the Governing Council may look to target the benchmark interest rate as its non-standard measures have a limited impact in addressing the risks surrounding the region. Although the EURUSD threatens the bearish formation from earlier this year, we will maintain our bearish call for the pair as it appears to be carving a lower high just below 1.3300, and interim support around 1.3000 should ultimately give way as price action continues to approach the apex of the descending triangle.

British Pound: U.K. Manufacturing Cools, RSI Falls Back From Overbought

The British Pound slipped to a low of 1.6190 as manufacturing in the U.K. expanded at the slowest pace since December, and the GBPUSD may continue to consolidate over the week as the economic docket is expected to show a slowing recovery in the region. As the relative strength index falls back from overbought territory, the pound-dollar may have carved out a near-term top coming into May, but the bullish sentiment underlining the sterling should gather pace throughout 2012 as the Bank of England drops its dovish tone for monetary policy. As the GBPUSD maintains the upward trend from earlier this year, we are looking for fresh highs in the exchange rate, and the sterling may outperform over the near-term as the central bank looks to conclude its easing cycle.

U.S. Dollar: ISM Manufacturing On Tap, Watching Employment Component

The greenback continued to gain ground on Tuesday, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) rallying to a high of 9,863, but the reserve currency may come under pressure during the North American trade as the economic docket is expected to reinforce a weakened outlook for the U.S. As the ISM Manufacturing index is expected to fall back to 53.0 in April from 53.4 in the previous month, the slower rate of output could renew speculation for another round of quantitative easing, but we will keep a close eye on the employment component as the highly anticipated Non-Farm Payrolls report are due out on Friday. However, as risk trends continue to dictate price action across the currency market, a drop in market sentiment could prop up the USD, and the shift away from risk-taking behavior may gather pace in the coming days as the outlook for global growth deteriorates.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Resume the Downward Trend From 2011? Join us in the Forum

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FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
USD	14:00	10:00	Construction Spending (MoM) (MAR)	0.5%	-1.1%
USD	14:00	10:00	ISM Manufacturing (APR)	53.0	53.4
USD	14:00	10:00	ISM Prices Paid (APR)	59.0	61.0
USD	15:00	11:00	Fed's Williams Speaks on Economy in Los Angeles
USD	16:30	12:30	Fed's Lockhart Speaks on Monetary Policy
USD	19:00	15:00	Fed's Plosser Gives Economic Outlook in San Diego
USD	21:00	17:00	Total Vehicle Sales	14.50M	14.32M
USD	21:00	17:00	Domestic Vehicle Sales	11.30M	11.09M

Euro Formation Foreshadows Key Break, Sterling Rally To Gather Pace

David Song, Currency Analyst — Mon, 30 Apr 2012 13:10:00 GMT

Market sentiment waned on Monday amid fears of prolonged recession in euro-area, and the shift away from risk taking behavior may gather pace in May as European policy maker struggle to address the sovereign debt crisis.

Talking Points

Euro: Spain Faces Double-Dip Recession, Triangle Continues To Take Shape
British Pound: Clears 23.6% Fib, RSI Bouncing Around 70
U.S. Dollar: Advances On Risk-Aversion, Inflationary Concerns Come To Light

Euro: Spain Faces Double-Dip Recession, Descending Triangle Continues To Take Shape

The Euro slipped to 1.3207 as Spain contracted another 0.3% in the first-quarter of 2012, and the EURUSD should track lower going into May as the fundamental outlook for the region continues to deteriorate. At the same time, we saw the CPI Estimate slow to 2.6% in April from 2.7% the month prior, and the weakening outlook for growth and inflation may lead the European Central Bank to ease policy further as the governments operating under the fixed-exchange rate system become increasingly reliant on monetary support.

According to Credit Suisse overnight index swaps, market participants are starting to price a rate cut over the next 12-months, and we may see the ECB President Mario Draghi target the benchmark interest rate in the second-half of the year as the non-standard measures have a limited impact in addressing the risks for the region. As the EURUSD continues to approach the apex of the descending triangle, we will preserve our bearish outlook for the pair, and we may see the euro-dollar continue to consolidate ahead of the ECB rate decision on tap for later this week as currency traders weigh the outlook for monetary policy. Should the Governing Council sound increasingly dovish this time around, speculation for more easing would spark a bearish reaction in the exchange rate, but we would need to see a break and a close below 1.3000 for a move back down to the 23.6% Fibonacci retracement from the 2009 high to the 2010 low around 1.2630-50.

British Pound: Clears 23.6% Fib, RSI Bouncing Around 70

The British Pound fell back from a fresh yearly high of 1.6300 amid the shift in risk sentiment, but the sterling may continue to track higher in May as interest rate expectations gather pace. Indeed, there’s speculation that the Bank of England could be forced to do more as the U.K. faces a double-dip recession, but it seems as though the Monetary Policy Committee will continue to move away from its easing cycle as central bank officials anticipate to see a stronger recovery in the second-half of the year. As the BoE changes its tune, the less dovish tone held by the central bank should prop up the sterling throughout 2012, and the GBPUSD may continue to retrace the decline from last April as it clears the 23.6% Fib from the 2009 low to high around 1.6250.

U.S. Dollar: Advances On Risk-Aversion,Inflationary Concerns Come To Light

The greenback bounced back on Monday, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR) advancing to a high of9,843, and the reserve currency may continue to recoup the losses from the previous week as it benefits from safe-haven flows. Nevertheless, the economic docket continue to show increasing price pressures in the world’s largest economy, with wage growth advancing 0.4% in March while the Core Personal Consumption Expenditure Index climbed an annualized 2.0% to mark the fastest pace of growth since November 2008, and the heightening risk for inflation may encourage the Federal Reserve to draw up a tentative exit strategy as the economic recovery gradually gathers pace. In turn, the bearish sentiment surrounding the dollar may be short-lived, and we should see the FOMC continue to soften its dovish rhetoric for monetary policy as growth and inflation pick up.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Resume the Downward Trend From 2011? Join us in the Forum

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FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
USD	13:45	09:45	Chicago Purchasing Manager	60.50	62.20
USD	14:00	10:00	NAPM-Milwaukee	53.00	51.80
USD	14:30	10:30	Dallas Fed Manufacturing Activity	8.00	10.80
NZD	22:45	18:45	Private Wages ex Overtime (QoQ)	0.6%	0.7%
NZD	22:45	18:45	Labor Cost Private Sector (QoQ)	0.5%	0.7%
NZD	22:45	18:45	Average Hourly Earnings (QoQ)		0.0%

Currency	GMT	Release	Expected	Actual	Comments
NZD	22:45	Building Permits (MoM) (MAR)	6.0%	19.8%	Biggest rise since August.
NZD	22:45	Trade Balance (NZ$) (MAR)	417M	134M	Surplus narrows as imports rose the most since November.
NZD	22:45	Exports (NZ$) (MAR)	4.37B	4.22B
NZD	22:45	Imports (NZ$) (MAR)	3.95B	4.08B
NZD	22:45	Trade Balance 12mth (YTD) (NZ$) (MAR)	501M	207M
GBP	23:01	Hometrack Housing Survey (YoY) (APR)	--	-0.9%	Rises for the second month.
GBP	23:01	Hometrack Housing Survey (MoM) (APR)	--	0.1%
CNY	23:44	China Leading Index (MAR)	--	100.52	Lowest since December.
AUD	00:30	TD Securities Inflation (MoM) (APR)	--	0.3%	Rises for the first time since December,
AUD	00:30	TD Securities Inflation (YoY) (APR)	--	1.9%
NZD	01:00	NBNZ Activity Outlook (APR)	--	36.1	Highest since July.
NZD	01:00	NBNZ Business Confidence (APR)	--	35.8
AUD	01:00	HIA New Home Sales (MoM) (MAR)	--	-9.4%	Largest decline since May 2006.
AUD	01:30	Private Sector Credit (YoY) (MAR)	3.2%	3.4%	Slowest pace of growth since September.
AUD	01:30	Private Sector Credit (MoM) (MAR)	0.3%	0.4%
NZD	03:00	Money Supply M3 (YoY) (MAR)	--	5.0%	Lowest since September.
EUR	07:00	Spanish GDP Constant SA (YoY) (1Q)	-0.6%	-0.4%	Contracts for the second time.
EUR	07:00	Spanish GDP Constant SA (QoQ) (1Q)	-0.4%	-0.3%
EUR	08:00	Euro-Zone M3 s.a. (3M) (MAR)	2.7%	2.8%	Fastest pace of growth since June 2009.
EUR	08:00	Euro-Zone M3 s.a. (YoY) (MAR)	2.8%	3.2%
EUR	09:00	Euro-Zone Consumer Price Index Estimate (YoY) (APR)	2.5%	2.6%	Holds steady for second month.
EUR	09:00	Italy CPI - EU Harmonized (MoM) (APR P)	0.8%	0.9%	Grows 3.8% for the second straight month.
EUR	09:00	Italy CPI - EU Harmonized (YoY) (APR P)	3.6%	3.8%
CAD	12:30	Gross Domestic Product (MoM) (FEB)	0.2%	-0.2%	Contracts for the first time since November.
CAD	12:30	Gross Domestic Product (YoY) (FEB)	2.1%	1.6%
CAD	12:30	Industrial Product Price (MoM) (MAR)	0.0%	0.2%	Rises for third month.
CAD	12:30	Raw Materials Price Index (MoM) (MAR)	0.3%	-1.6%	Falls for second month.
USD	12:30	Personal Income (MAR)	0.3%	0.4%	Biggest rise since December.
USD	12:30	Personal Spending (MAR)	0.4%	0.3%	Rises for the fourth month.
USD	12:30	Personal Consumption Expenditure Deflator (MoM) (MAR)	0.3%	0.2%	Core rate advances at the fastest pace since November 2008.
USD	12:30	Personal Consumption Expenditure Core (YoY) (MAR)	2.0%	2.0%
USD	12:30	Personal Consumption Expenditure Deflator (YoY) (MAR)	2.2%	2.1%
USD	12:30	Personal Consumption Expenditure Core (MoM) (MAR)	0.2%	0.2%

Euro Struggles Ahead Of Italian Bond Auction, Sterling Eyes 1.6250

David Song, Currency Analyst — Thu, 26 Apr 2012 14:05:00 GMT

Market sentiment waned on Thursday amid the dismal developments coming out of Europe, and the shift away from risk-taking behavior may gather pace during the North American trade as the threat for contagion continues to drag on investor confidence.

Talking Points

Euro: Italy Faces Higher Financing Costs, Bond Auction In Focus
British Pound: Hits Fresh Yearly High. BoE Sees Case For More QE
U.S. Dollar: Index Breaks Upward Trend, 1Q GDP May Disappoint

Euro: Italy Faces Higher Financing Costs, Bond Auction In Focus

The Euro gave back the overnight advance to 1.3262 as heightening finance costs across the periphery countries raised the threat for contagion, and the EURUSD may track lower going into May as the bearish formation continues to take shape. Indeed, Italy sold EUR 8.5B in six-month bills yielding 1.772%, which compares to the 1.119% offered in March, and the 5 and 10-Year bond auction on tap for Friday may ultimately generate another bearish reaction in the EURUSD as fears surrounding the sovereign debt crisis resurface.

At the same time, Spanish Prime Minister Mariano Rajoy warned that the region’s ability to fund itself remains at risk amid the ongoing turmoil in the financial system, while policy makers in Germany said the European Stability Mechanism will not be utilized to shore up commercial banks as the EU tries to push through the new fiscal pact. As the group refrain from taking additional steps to address the debt crisis, the weakening outlook for the region continues to cast a bearish outlook for the EURUSD, and the single currency may weaken further in May as European policy makers look towards the Governing Council for additional monetary support. As the region continues to face a risk for a prolonged recession, we should see the European Central Bank carry out its easing cycle throughout 2012, and we are still waiting for a selloff in the EURUSD as price action approaches the apex of the descending triangle.

British Pound: Hits Fresh Yearly High. BoE Sees Case For More QE

The British Pound climbed to a fresh yearly high of 1.6206 even as the Bank of England struck a cautious outlook for the region, and the GBPUSD looks poised to test the 23.6% Fibonacci retracement from the 2009 low to high around 1.6250 as central bank drops its dovish tone for monetary policy. BoE board member Martin Weale said that the dismal 1Q GDP report raises the scope for more asset purchases as the region faces a double-dip recession, but the stickiness in underlying inflation may push the central bank away from its easing cycle as the Monetary Policy Committee anticipates to see a faster recovery later this year. As the GBPUPSD maintains the upward trend from earlier this year, the pair may mark fresh yearly highs going into May, but the pair remains poised for a short-term correction as the relative strength index approaches overbought territory. Should the 23.6% Fib act as new resistance, we should see the 1.6000 figure (former resistance) come in as new support, and we will maintain a bullish outlook for the sterling as the BoE changes its tune for monetary policy.

U.S. Dollar: Index Breaks Upward Trend, 1Q GDP May Disappoint

The greenback remains under pressure on Thursday, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR)tumbling to a fresh monthly low of 9,877, and the reserve currency may track lower going into the end of the week as it breaks out of the upward trend from earlier this year. However, as the 1Q GDP report comes into focus, an above-forecast print could spark a rebound in the greenback, but the advance reading has had a tendency of falling short of market expectations, which could foster a bearish outlook for the USD. As Fed Chairman Ben Bernanke continues to dampen expectations for a rate hike, the cautious tone held by the central bank head may continue to drag on the exchange rate, but we may see the dollar regain its footing going into May as the central bank raises its outlook for growth and inflation.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Resume the Downward Trend From 2011? Join us in the Forum

Related Articles: Weekly Currency Trading Forecast

FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
USD	15:00	11:00	Kansas City Fed Manufacturing Activity Index (APR)		9
EUR	16:00	12:00	French Total Jobseekers Change (MAR)	2.8	6.2
EUR	16:00	12:00	French Total Jobseekers (MAR)	2870.0k	2867.9k

Currency	GMT	Release	Expected	Actual	Comments
NZD	21:00	Reserve Bank of New Zealand Interest Rate Decision	2.50%	2.50%	May reevaluate policy should Kiwi appreciate further.
GBP	23:01	Nationwide Consumer Confidence (MAR)	43	53	Highest since June 2011.
AUD	0:00	Conference Board Leading Index (FEB)	--	0.0%	Fails to grow for the first time in 2012.
AUD	1:00	DEWR Skilled Vacancies (MAR)	--	0.8%	Rises for third month.
JPY	4:30	All Industry Activity Index (MoM) (FEB)	-0.2%	-0.1%	Weakens for the second month.
EUR	8:00	Italian Business Confidence (APR)	92.1	89.5	Lowest since November 2009.
GBP	8:30	BBA Loans for House Purchase (MAR)	34000	31888	Weakest print since May 2011.
EUR	9:00	Euro-Zone Economic Confidence (APR)	94.2	92.8	Confidence weakens to the lowest level since December 2011.
EUR	9:00	Euro-Zone Business Climate Indicator (APR)	-0.30	-0.52
EUR	9:00	Euro-Zone Consumer Confidence (APR F)	-19.8	-19.9
EUR	9:00	Euro-Zone Industrial Confidence (APR)	-7.0	-9.0
EUR	9:00	Euro-Zone Services Confidence (APR)	-0.5	-2.4
GBP	10:00	CBI Reported Sales (APR)	-4	-6	Lowest since January.
EUR	12:00	German CPI (MoM) (APR P)	0.1%	0.1%	Slowest pace of growth since January 2011.
EUR	12:00	German CPI (YoY) (APR P)	2.0%	2.0%
EUR	12:00	German CPI - EU Harmonised (MoM) (APR P)	0.1%	0.2%
EUR	12:00	German CPI - EU Harmonised (YoY) (APR P)	2.2%	2.2%
USD	12:30	Chicago Fed National Activity Index (MAR)	--	-0.29	Lowest since August 2011.
USD	12:30	Initial Jobless Claims (APR 21)	375K	388K	Highest since the first week of April.
USD	12:30	Continuing Claims (APR 14)	3280K	3315K	Above 3300 for the second week.
USD	14:00	Pending Home Sales (MoM) (MAR)	1.0%	4.1%	Advances for the third month.
USD	14:00	Pending Home Sales (YoY) (MAR)	7.3%	10.8%

USD To Hold Steady Ahead Of FOMC, Euro Outlook Remains Bearish On ECB

David Song, Currency Analyst — Wed, 25 Apr 2012 13:15:00 GMT

The U.S. dollar continued to consolidate ahead of the FOMC interest rate decision, but the developments coming out of the central bank may prop up the reserve currency should the committee continue soften its dovish tone for monetary policy.

Talking Points

U.S. Dollar: All Eyes On FOMC, Bernanke Press Conference In Focus
Euro: Bearish Formation Continues To Take Shape, ECB Strikes Dovish Tone
British Pound: 1Q U.K. GDP Disappoints, Look For Support At 1.6000

U.S. Dollar: All Eyes On FOMC, Bernanke Press Conference In Focus

The greenback is regaining its footing ahead of the FOMC interest rate decision, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR)paring the overnight decline to 9,910, and the reserve currency may snap back during the North American trade should the Federal Reserve strike an improved outlook for the world’s largest economy. Beyond the rate decision at 16:30 GMT, we will be keeping a close eye on the updated forecast for growth and inflation at 18:00 GMT, but the press conference with Fed Chairman Ben Bernanke at 18:15 GMT could spark a sharp rally in the USD should the central bank head adopt a hawkish outlook for monetary policy.

As Fed officials take note of the more robust recovery, the central bank may turn its attention to the stickiness in underlying inflation, and we may see the FOMC start to discuss a tentative exit strategy as the economy gets on a more sustainable path. As the Fed shifts gears, the shift in the policy outlook encourage a bullish forecast for the USD, and greenback should appreciate further going into May as the central bank moves away from its easing cycle. As the USDOLLAR continues to find support around 9,900, the index appears to be carving a floor for a move higher, and we are still looking for another run at the 78.6% Fibonacci retracement around 10,118 as interest rate expectations pick up.

Euro: Bearish Formation Continues To Take Shape, ECB Strikes Dovish Tone

The Euro extended the advance from the previous day to reach a fresh weekly high of 1.3235, but we are still bearish on the EURUSD as the pair remains stuck in the descending triangle carried over from earlier this year. As price action approaches the apex of the bearish formation, we should see interim support around 1.3000 give way, and the single currency should track lower throughout the year as the European Central Bank sticks to its easing cycle. Indeed, ECB President Mario Draghi struck a rather dovish tone while speaking in Brussels and said that the risks surrounding the region are ‘broadly balanced,’ and went onto say that ‘underlying price pressures should remain modest’ as the region faces a slowing recovery. In addition, the central bank head argued that ‘any exit strategy is premature given the current economic situation,’ and it seems as though the Governing Council will embark on more easing as the governments operating under the single currency become increasingly reliant on monetary support. As the EURUSD struggles to hold above 1.3200, we should see the bearish formation continue to take shape, and we may see the pair fall back towards the 23.6% Fib from the 2009 high to the 2010 low around 1.2630-50 as it carves out a lower top in April.

British Pound: 1Q U.K. GDP Disappoints, Look For Support At 1.6000

The British Pound slipped to an overnight low of 1.6080 as the 1Q GDP report for the U.K. fell short of market expectations, and we may see a short-term correction in the GBPUSD as the pair appears to be carving a short-term top ahead of 1.6200. However, as the pound-dollar maintains the upward trending channel from earlier this year, we should see former resistance around 1.6000 to act as new support, and we will preserve our bullish call for the sterling as the Bank of England turns its attention to the stickiness in core inflation. As the BoE scales back its dovish tone for monetary policy, a short-term pullback could set the stage for a larger move to the upside, and the GBPUSD we may see the sterling track higher throughout the year as the BoE looks to conclude its easing cycle.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Resume the Downward Trend From 2011? Join us in the Forum

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FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
USD	14:30	10:30	DOE U.S. Crude Oil Inventories (APR 20)	2800K	3856K
USD	14:30	10:30	DOE U.S. Gasoline Inventories (APR 20)	-1500K	592K
USD	14:30	10:30	DOE U.S. Distillate Inventory (APR 20)	500K	-2908K
USD	16:30	12:30	Federal Open Market Committee Interest Rate Decision	0.25%	0.25%
USD	18:00	14:00	FOMC to Release Projections of Economy and Fed Funds Rate
USD	18:15	14:15	Fed's Bernanke Holds Press Conference
NZD	21:00	17:00	Reserve Bank of New Zealand Interest Rate Decision	2.50%	2.50%

Currency	GMT	Release	Expected	Actual	Comments
JPY	6:00	Machine Tool Orders (YoY) (MAR F)	- -	1.6%	First rise since December.
GBP	8:30	Gross Domestic Product (QoQ) (1Q A)	0.1%	-0.2%	Marks first double-dip recession since 1970’s.
GBP	8:30	Gross Domestic Product (YoY) (1Q A)	0.3%	0.0%
GBP	8:30	Index of Services (MoM) (FEB)	0.2%	-0.4%	Weakens for the first time since October.
GBP	8:30	Index of Services (3Mo3M) (FEB)	0.5%	0.2%
GBP	10:00	CBI Trends Total Orders (APR)	-6	-8	Business confidence advances to the highest since April 2010.
GBP	10:00	CBI Trends Selling Prices (APR)	26	7
GBP	10:00	CBI Business Optimism (APR)	-18	22
USD	11:00	MBA Mortgage Applications (APR 20)	--	-3.8%	Weakens for the second time in April.
USD	12:30	Durable Goods Orders (MAR)	-1.5%	-4.2%	Marks the biggest decline since January 2009.
USD	12:30	Durables ex Transportation (MAR)	0.5%	-1.1%
USD	12:30	Non-Defense Capital Goods Orders ex Aircrafts (MAR)	1.0%	-0.8%
USD	12:30	Non-Defense Cap Goods Shipments ex Aircrafts (MAR)	1.4%	2.6%

USD Outlook Remains Bullish On FOMC, Euro Bearish Formation In Focus

David Song, Currency Analyst — Tue, 24 Apr 2012 14:00:00 GMT

The U.S. dollar is struggling to hold its ground on Tuesday as market participants increase their appetite for risk, but we may see the reserve currency bounce back over the next 24-hours of trading should the Federal Reserve continue to soften its dovish tone for monetary policy.

Talking Points

U.S. Dollar: Fed To Maintain Current Policy, Soften Dovish Tone
Euro: Spain, Italy Face Rising Finance Costs – Descending Triangle Remains In Play
British Pound: Hits Fresh Yearly High Ahead Of 1Q U.K. GDP

U.S. Dollar: Fed To Maintain Current Policy, Soften Dovish Tone

The greenback is coming under pressure ahead of the FOMC interest rate decision, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR)giving back the overnight advance to 9,947, but the rate decision on tap for tomorrow may prop up reserve currency as the committee moves away from its easing cycle. Although the FOMC is widely expected to maintain its current policy in April, the fresh batch of central bank rhetoric paired with the updated forecast for growth and inflation may reinforce our bullish call for the USD as Fed officials take note of the more robust recovery.

In turn, we may see the committee start to discuss a tentative exit strategy as fundamental outlook for the U.S. picks up, but Fed Chairman Ben Bernanke may keep the door open to expand policy further as the sovereign debt crisis continues to pose a threat to the world financial system. Nevertheless, as the Fed switches gears, the shift in the policy outlook should drive the greenback higher in 2012, and we should see the bullish formation on the USDOLLAR continue to take shape as it carves out a higher low around 9,900. As a result, we’re still expecting to see another run at the 78.6% Fibonacci retracement around 10,118, and the fundamentals coming out of the world’s largest economy should have a greater impact in driving price action as the Fed looks to conclude its zero interest rate policy.

Euro: Spain, Italy Face Rising Finance Costs – Descending Triangle Remains In Play

The Euro advanced to 1.3190 amid the rise in risk-taking behavior, but the rebound is likely to be short-lived as heightening financing costs across the European periphery raises the threat for contagion. Indeed, the yield tied to Spain and Italy’s debt continued to push higher as the governments tapped the bond market overnight, and the ongoing turmoil in the region continues to instill a weakened outlook for the EURUSD as European policy makers fail to restore investor confidence. As the governments operating under the single currency become increasingly reliant on monetary support, the European Central Bank may face increased pressure to expand monetary policy further, but the wait-and-see approach held by the Governing Council may dampen the appeal of the Euro as there appears to be a growing rift within the group. As the bearish formation in the EURUSD continues to pan out, we should see the pair track lower going in May, and the euro-dollar maintains at risk for a sharp selloff as price action approaches the apex of the descending triangle.

British Pound: Hits Fresh Yearly High Ahead Of 1Q U.K. GDP

The British Pound extended the advance from earlier this month, with the GBPUSD rallying to a fresh yearly high of 1.6163, and the sterling may appreciate further over the next 24-hours of trading should the economic docket encourage an improved outlook for the U.K. As the advance 1Q GDP report is expected to show the economy returning to growth, a strong print could spark a run at the 23.6% Fib from the 2009 low to high around 1.6250, and the sterling looks poised to appreciate further in 2012 as the Bank of England looks to conclude its easing cycle. As the GBPUSD maintains the upward trending channel from earlier this year, we expect to see fresh highs going into May, but we will keep a close eye on the relative strength index approaches overbought territory. Nevertheless, we should see former resistance around 1.6000 act as new support as the upward trend in the GBPUSD gathers pace, and the sterling may outperform against its major counterparts throughout the remainder of the year as the shift in the policy outlook props up interest rate expectations.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Resume the Downward Trend From 2011? Join us in the Forum

Related Articles: Weekly Currency Trading Forecast

FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
USD	14:00	10:00	Consumer Confidence (APR)	69.5	70.2
USD	14:00	10:00	Richmond Fed Manufacturing Index (APR)	6	7
USD	14:00	10:00	House Price Index (MoM) (FEB)	0.2%	0.0%
USD	14:00	10:00	New Home Sales (MAR)	318K	313K
USD	14:00	10:00	New Home Sales (MoM) (MAR)	1.6%	-1.6%

Currency	GMT	Release	Expected	Actual	Comments
NZD	22:45	Net Migration s.a. (MAR)	--	130	First rise since August 2011.
JPY	23:50	Corporate Service Price (YoY) (MAR)	-0.6%	-0.3%	Smallest decline since December.
AUD	1:30	Consumer Prices Index (QoQ) (1Q)	0.6%	0.1%	Slowest pace of growth since 3Q 2009. Core CPI lowest since 1Q 2011.
AUD	1:30	Consumer Prices Index (YoY) (1Q)	2.2%	1.6%
AUD	1:30	CPI RBA Trimmed Mean (QoQ) (1Q)	0.6%	0.3%
AUD	1:30	CPI RBA Trimmed Mean (YoY) (1Q)	2.4%	2.2%
AUD	1:30	CPI RBA Weighted Median (QoQ) (1Q)	0.6%	0.4%
AUD	1:30	CPI RBA Weighted Median (YoY) (1Q)	2.3%	2.1%
NZD	3:00	Credit Card Spending s.a. (MoM) (MAR)	--	0.3%	Rises for the fourth month.
NZD	3:00	Credit Card Spending (YoY) (MAR)	--	5.2%
CHF	6:00	Trade Balance (Swiss franc) (MAR)	3.00B	1.69B	Exports fell for second time in 2012.
CHF	6:00	Exports (MoM) (MAR)	1.0%	-2.5%
CHF	6:00	Imports (MoM) (MAR)	--	4.6%
CHF	6:00	UBS Consumption Indicator (MAR)	--	1.22	Highest since July.
EUR	6:45	French Consumer Confidence Indicator (APR)	87	88	Highest since December 2010.
EUR	6:45	French Business Survey Overall Demand (APR)	--	3	Highest reading since July.
EUR	8:00	Italian Hourly Wages (MoM) (MAR)	--	0.0%	Holds flat for second month.
EUR	8:00	Italian Hourly Wages (YoY) (MAR)	--	1.2%
GBP	8:30	Public Finances (PSNCR) (Pounds) (MAR)	13.0B	16.5B	Largest shortfall since November 2010.
GBP	8:30	Public Sector Net Borrowing (Pounds) (MAR)	14.2B	15.9B
GBP	8:30	Public Sector Net Borrowing ex Interventions (MAR)	16.0B	18.2B
CAD	12:30	Retail Sales (MoM) (FEB)	0.1%	-0.2%	Contracts for the first time since July.
CAD	12:30	Retail Sales Less Autos (MoM) (FEB)	0.6%	0.4%
USD	13:00	S&P/Case-Shiller Composite-20 s.a. (MoM) (FEB)	0.20%	0.15%	Advances for the first time since April 2011.
USD	13:00	S&P/Case-Shiller Composite-20 (YoY) (FEB)	-3.40%	-3.49
USD	13:00	S&P/Case-Shiller Home Price Index (FEB)	134.68	134.20

Euro To Threaten 1.3000, Bullish Sterling Formation To Gather Pace

David Song, Currency Analyst — Mon, 23 Apr 2012 13:40:00 GMT

Market sentiment waned on Monday amid the weakening outlook for the euro-area, and the shift away from risk-taking behavior may gather pace throughout the week as European policy makers struggle to restore investor confidence.

Talking Points

Euro: ECB Talks Down More Easing, French Election In Focus
British Pound: Hold’s Narrow Range Ahead Of 1Q GDP
U.S. Dollar: Index Continues To Hold Support, FOMC To Set Tone For May

Euro: ECB Talks Down More Easing, French Election In Focus

The Euro weakened to 1.3119 as the developments coming out of the region sparked fears for a prolonged recession, and the single currency may face additional headwinds over the near-term as the fundamental outlook for the region turns increasingly bleak. Following the G20 meeting, it seems as though the EU will continue to sit on the sidelines even as the international community says more needs to be done, while there appears to be a growing rift within the European Central Bank as the governments operating under the single currency become increasingly reliant on monetary support. As the ECB continues to assess the impact of its Long Term Refinancing Operations, it seems as though the central bank will maintain its current policy stance throughout the first-half of the year, but we may see the board continue to carry out its easing cycle in 2012 as the slowing recovery dampens the outlook for growth and inflation.

At the same time, the election in France also appears to be dragging on the Euro as President Nicolas Sarkozy risks losing his seat to Francois Hollande, and the shift in leadership could further dampen the outlook for the region as the challenger pledges to renegotiate parts of the new fiscal pact. As the EURUSD fails to hold above 1.3200, it seems as though the pair is certainly carving out a lower top ahead of May, and we should see the bearish formation continue to take shape over the near-term as price action continues to approach the apex of the descending triangle. In turn, we’re still looking for a break and a close below 1.3000 to lead up to a major selloff in the exchange rate, and we should see the pair fall back towards the 23.6% Fibonacci retracement from the 2009 high to the 2010 low around 1.2630-50 as European policy makers fail to stem the risk for contagion.

British Pound: Hold’s Narrow Range Ahead Of 1Q GDP

The British Pound bounced back from an overnight low of 1.6076 to hold within Friday’s range, and the sterling looks poised to resume the advance from earlier this month as the economic docket is expected to reinforce an improved outlook for the U.K. As the 1Q GDP report is expected to show the economy expanding 0.1% during the first three-months of the year, easing fears of a double-dip recession should help to prop up the exchange rate, and we may see market participants become increasingly bullish against the GBPUSD as the Bank of England drops its dovish tone for monetary policy. As the pound-dollar carves out a higher low in April, we are still looking for a run at the 23.6% Fib from the 2009 low to high around 1.6250, and we should see the sterling outperform throughout 2012 as the shift in the policy outlook spurs speculation for a rate hike.

U.S. Dollar: Index Continues To Hold Support, FOMC To Set Tone For May

The greenback regained its footing on Monday, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR)advancing to a high of 9,950, and the reserve currency may track higher in May as it appears to be carving out a higher low this month. As the 9,900 figure continues to provide support, the dollar certainly looks poised to appreciate further in May, and the FOMC interest rate decision could spur a key rally in the greenback should the central bank continue to scale back its dovish tone for monetary policy.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Resume the Downward Trend From 2011? Join us in the Forum

Related Articles: Weekly Currency Trading Forecast

FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
EUR	15:45	11:45	ECB's Jens Weidmann Speaks on Euro Economy
NZD	22:45	18:45	Net Migration s.a. (MAR)		-440

Currency	GMT	Release	Expected	Actual	Comments
AUD	1:30	Producer Price Index (QoQ) (1Q)	0.4%	-0.3%	Slowest pace of growth since 2Q 2010.
AUD	1:30	Producer Price Index (YoY) (1Q)	2.2%	1.4%
CNY	2:30	HSBC Flash Purchasing Manager Index Manufacturing (APR)	--	49.1	Contracts for the sixth straight month.
JPY	5:00	Leading Index (FEB F)	--	96.3	Highest since February 2008.
JPY	5:00	Coincident Index (FEB F)	--	95.0
JPY	5:00	Supermarket Sales (YoY) (MAR)	--	-2.4%	Falls for the second time in 2012.
EUR	6:45	French Own-Company Production Outlook (APR)	--	-4	Business confidence slips to a two-month low.
EUR	6:45	French Production Outlook Indicator (APR)	--	-14
EUR	6:45	French Business Confidence Indicator (APR)	96	95
CHF	7:00	Money Supply M3 (YoY) (MAR)	--	6.6%	Rebounds from lowest since July.
CHF	7:00	Real Estate Index Family Homes (1Q)	--	410.4	Highest since the series began in 1997.
EUR	7:00	French PMI Manufacturing (APR P)	47.4	47.3	Contracts for the second month.
EUR	7:00	French PMI Services (APR P)	50.1	46.4
EUR	7:30	German PMI Manufacturing (APR A)	49.0	46.3	Lowest print since July 2009.
EUR	7:30	German PMI Services (APR A)	52.3	52.6
EUR	8:00	Euro-Zone PMI Manufacturing (APR A)	48.1	46.0	Contracts for the third month, lowest since November.
EUR	8:00	Euro-Zone PMI Services (APR A)	49.3	47.9
EUR	8:00	Euro-Zone PMI Index Composite (APR A)	49.3	47.4
EUR	8:00	Italian Consumer Confidence Index s.a. (APR)	96.0	89.0	Lowest since the series began in 2006.
EUR	9:00	Euro-Zone Government Debt-GDP Ratio (JUL 3)	--	87.2%	Hits a record high in 2011.
CAD	12:30	Wholesale Sales (MoM) (FEB)	-0.2%	1.6%	Largest advance since May 2011.

Euro Relief Rally Offers Selling Opportunity, Pound Eyes Key 1.6250

David Song, Currency Analyst — Fri, 20 Apr 2012 14:20:00 GMT

Market sentiment firmed up on Friday as the global community increases its effort to combat the sovereign debt crisis, but the rise in risk appetite is likely to be short-lived as the threat for contagion continues to drag on investor confidence.

Talking Points

Euro: IMF Contributions To Total $500B, More Calls For ECB Rate Cut
British Pound: Retail Sales Tops Forecast, 23.6% Fib In Sight
U.S. Dollar: FOMC Interest Rate Decision In Focus, Round Ahead

Euro: IMF Contributions To Total $500B, More Calls For ECB Rate Cut

The Euro rallied to 1.3222 as the International Monetary Fund looks to strengthen its lending capacity to further assist the European periphery, but we will stick with our bearish call for the EURUSD as the fundamental outlook for the region remains bleak. Indeed, European Union Monetary Affairs Commissioner Olli Rehn said China will increase its contributions to the IMF after meeting with China’s Vice Premier Wang Qishan, and the developments coming out of the Group of 20 meeting in Washington may continue to prop up the single currency European policy makers see commitments to the IMF rising up to $500B.

Meanwhile, French presidential candidate François Hollande argued that the ECB should implement further rate cuts to shore up the ailing economy, with World Bank President Robert Zoellick calling on the region to focus on growth, and we expect to see the Governing Council carry out its easing cycle throughout 2012 in an effort to stem the risk for a prolonged recession. As the bearish formation in the EURUSD continues to pan out, we may see the pair struggle to close above 1.3200, and the euro-dollar looks poised for a sharp decline as price action continues to approach the apex of the descending triangle.

British Pound: Retail Sales Tops Forecast, 23.6% Fib In Sight

The British Pound advanced to a fresh yearly high of 1.6130 following the upbeat retail sales report, and the recent strength behind the sterling should gather pace going into May as the fundamental outlook for the region improves. As the economic recovery in the U.K. gathers pace, we should see the Bank of England sound a bit more hawkish in the month ahead, and the Monetary Policy Committee may show an increased willingness to start normalizing monetary policy towards the end of 2012 amid the stickiness in underlying inflation. As the upward trending channel in the GBPUSD continues to play out, we are looking for a run to the 23.6% Fibonacci retracement from the 2009 low to high around 1.6250, and the British Pound outperform in the second-half of the year as the shift in the policy outlook props up interest rate expectations.

U.S. Dollar: FOMC Interest Rate Decision In Focus, Round Ahead

The greenback came under pressure on Friday, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR)slipping to a low of 9,918, and the reserve currency may struggle to hold its ground throughout the North American trade as the rebound in market sentiment appears to be gathering pace. As the U.S. equity market extends the advance from the open, the risk in risk-taking behavior may continue to dampen the appeal of the greenback, but the reserve currency should track higher next week as we expect the Federal Open Market Committee to dampen expectations for more easing. As the FOMC rate decision comes into focus, we anticipate to see a less dovish policy statement amid expectations for a more robust recovery, and the central bank may ultimately raise its fundamental assessment for the world’s largest economy amid the resilience in private sector consumption.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Resume the Downward Trend From 2011? Join us in the Forum

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FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
			No Scheduled Releases

Euro Continues To Carve Lower Top, Fresh Sterling Highs In Sight

David Song, Currency Analyst — Thu, 19 Apr 2012 13:10:00 GMT

Heightening finance costs across the euro-area rattled market sentiment on Thursday, and the shift away from risk-taking behavior may gather pace going into the end of the week as fundamental outlook for the region turns increasingly bleak.

Talking Points

Euro: Spanish, French Yields Tip Higher – Rumors Of Credit Rating Downgrade Resurface
British Pound: Advances To Fresh 2012 High As BoE Warns Of Sticky Inflation
U.S. Dollar: Index To Consolidate, G20 Meeting In Focus

Euro: Spanish, French Yields Tip Higher – Rumors Of Credit Rating Downgrade Resurface

The Euro advanced to an overnight high of 1.3165 as Spain sold EUR 2.54B in 2 and 10-Year bonds, which exceeded the EUR 2.5B target, but the rally was short-lived as the government offered 5.743% on the 2022 debt compared to the 5.403% in January. In contrast, France sold EUR 10.5B versus the EUR 11.0B target, while the yield tied to the five-year note climbed to 1.83% from 1.78% in March.

In light of the recent development, rumors emerged that France could face a credit rating downgrade, which pushed the euro down to 1.3069, and the heightening risk for contagion reinforces our bearish view for the EURUSD as European policy makers struggle to restore investor confidence. Despite the ongoing turmoil in Spain, the European Union said there is ‘no plan to activate the EFSF or the ESM to support or recapitalize Spanish banks,’ and we may see the European Central Bank take additional steps to shore up the ailing economy as the governments operating under the single currency become increasingly reliant on monetary support. As the EURUSD marks another failed run at 1.3200, the pair certainly appears to be carving a lower top going into the last week of April, and we are still looking for a move below 1.3000 as price action continues to approach the apex of the descending triangle. Once the key figure gives out, we expect to see the euro-dollar fall back towards the 23.6% Fibonacci retracement from the 2009 high to the 2010 low around 1.2630-50, and the single currency is likely to face additional headwinds over the near-term as the fundamental outlook for the region turns increasingly bleak.

British Pound: Advances To Fresh 2012 High As BoE Warns Of Sticky Inflation

The British Pound climbed to a fresh yearly high of 1.6077 as Bank of England board member Adam Posen struck a more hawkish tone for monetary policy, and the sterling should track higher throughout 2012 as the central bank moves away from its easing cycle. Indeed, Mr. Posen warned about the stickiness in the core rate of inflation, stating that BoE is taking resilience in underlying price growth ‘very seriously,’ and it seems as though the Monetary Policy Committee is setting the stage to start normalizing monetary policy as central bank officials turn increasingly upbeat towards the economy. As the GBPUSD maintains the upward trending channel from earlier this year, we should see the pair continue to march towards the 23.6% Fib from the 2009 low to high around 1.6250, and we expect to see the sterling outperform against its major counterparts in 2012 amid the shift in the policy outlook.

U.S. Dollar: Index To Consolidate, G20 Meeting In Focus

The greenback continued to gain ground on Thursday, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR)climbing to a high of 9,974, but we may see the reserve currency consolidate during the North American trade as the U.S. equity market pares the decline from the open. At the same time, we’re expecting to see a 0.5% rise in Existing Home Sales, and a rebound in trader sentiment may sap demands for the greenback as market participants increase their appetite for risk. Nevertheless, as the Group of 20 meeting in Washington comes into focus, global policy makers may show an increased willingness to shore up the global economy, but optimism surrounding the event may quickly fizzle should group struggle to meet on common ground.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Resume the Downward Trend From 2011? Join us in the Forum

Related Articles: Weekly Currency Trading Forecast

FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
EUR	14:00	10:00	Euro-Zone Consumer Confidence (APR A)		-19.1
USD	14:00	10:00	Philadelphia Fed. (APR)	12.1	12.5
USD	14:00	10:00	Existing Home Sales (MoM) (MAR)	0.7%	-0.9%
USD	14:00	10:00	Existing Home Sales (MAR)	4.62M	4.59M
USD	14:00	10:00	Leading Indicators (MAR)	0.2%	0.7%
EUR	15:30	11:30	ECB's Peter Praet Speaks on ECB's Role in Debt Crisis

Currency	GMT	Release	Expected	Actual	Comments
NZD	22:00	ANZ Job Ads (MoM) (MAR)	--	-1.0%	First decline since December.
NZD	22:45	Consumer Prices Index (QoQ) (1Q)	0.5%	0.5%	Slowest pace of growth since 3Q 2010.
NZD	22:45	Consumer Prices Index (YoY) (1Q)	1.6%	1.6%
JPY	23:50	Adjusted Merchandise Trade Balance (Yen) (MAR)	-446.3B	-621.3B	Largest deficit since April 2011 as imports rose the most since November.
JPY	23:50	Merchandise Trade Balance Total (Yen) (MAR)	-223.2B	-82.6B
JPY	23:50	Merchandise Trade Exports (YoY) (MAR)	0.2%	5.9%
JPY	23:50	Merchandise Trade Imports (YoY) (MAR)	7.0%	10.5%
AUD	1:30	NAB Business Confidence (1Q)	--	-1	Lowest since 3Q 2011.
AUD	1:30	RBA Foreign Exchange Transaction (Australian dollar) (MAR)	--	944M	Highest since June 2011.
EUR	8:00	Italian Industrial Orders s.a. (MoM) (FEB)	-1.1%	-2.5%	Weakens for the second month.
EUR	8:00	Italian Industrial Orders n.s.a. (YoY) (FEB)	-6.2%	-13.2%
EUR	8:00	Italian Industrial Sales s.a. (MoM) (FEB)	--	2.3%	Rises for the first time since December.
EUR	8:00	Italian Industrial Sales n.s.a. (YoY) (FEB)	--	-1.5%
USD	12:30	Initial Jobless Claims (APR 14)	370K	386K	Holding at the lowest levels since 2008.
USD	12:30	Continuing Claims (APR 7)	3300K	3297K

Euro Eyes Support Ahead Of Spain Bond Auction, Sterling To Outperform

David Song, Currency Analyst — Wed, 18 Apr 2012 13:25:00 GMT

The Euro is struggling to hold its ground ahead of Spain’s 10-Year bond auction, and the single currency may continue to give back the rebound from earlier this week as the ongoing turmoil in Europe drags on investor confidence.

Talking Points

Euro: ECB Moves Away From Non-Standard Measures, Spain Bond Auction In Focus
British Pound: BoE Votes 8-1 For APF, Sees Sticky Inflation
U.S. Dollar: Struggling On Risk Appetite, 9,900 Key For Index

Euro: ECB Moves Away From Non-Standard Measures, Spain Bond Auction In Focus

Heightening fears surrounding the European periphery pushed the EURUSD down to 1.3066 during the overnight trade, and the single currency may come under increased pressure over the next 24-hours of trading should Spain’s debt auction disappoint. Indeed, we’ve seen greater demands for short-term debt in light of the European Central Bank’s three-year loan facility, but a dismal 10-Year bond sale could spark a sharp selloff in the exchange rate as heightening finance costs across the region raises the threat for contagion. At the same time, Italian Prime Minister Mario Monti scaled back his pledge to balance public finances as the government raised the 2013 deficit target to 0.5% of GDP from 0.1%, and the weakening outlook for the euro-area may lead the European Central Bank to carry out its easing cycle throughout 2012 as it aims to stem the risk for a prolonged recession.

As the governments operating under the single currency become increasingly reliant on monetary support, European Central Bank board member Jens Weidmann argued that the limits of the bond purchase program have ‘become apparent’ according to an interview with Reuters, and talked down speculation for another Long Term Refinancing Operation as the non-standard measure fails to stem the risk for contagion. At the same time, International Monetary Fund Managing Director Christine Lagarde said ‘there is scope’ for lower borrowing costs in the euro-area as the central bank expects to see easing price pressures going into the following year. In turn, we may see ECB President Mario Draghi target the benchmark interest rate as there appears to be a growing rift within the Governing Council, and we will preserve our bearish call on the EURUSD as price action continues to approach the apex of the descending triangle. As the euro-dollar falls back towards support around 1.3000, a break below this key figure would expose the 23.6% Fibonacci retracement from the 2009 high to the 2010 low around 1.2630-50, and the pair looks poised to track lower throughout the year as the fundamental outlook for the region turns increasingly bleak.

British Pound: BoE Votes 8-1 For APF, Sees Sticky Inflation

The British Pound made another run at 1.6000 as the Bank of England Minutes dampened speculation for additional monetary support, and the sterling should continue to outperform against its major counterparts as the central bank looks to conclude its easing cycle. Indeed, the Monetary Policy Committee voted 8-1 to maintain the Asset Purchase Facility at GBP 325B as board member Adam Posen scaled back his vote for more quantitative easing, while the central bank continued to soften its dovish tone for monetary policy in light of the stickiness in price growth. As the GBPUSD continues to comes off of the higher low around 1.5800, the upward trending channel should take shape going forward, and we may ultimately see a run at the 23.6% Fib from the 2009 low to high around 1.6250 amid the shift in the policy outlook.

U.S. Dollar: Risk Sentiment To Drive Prices, Index Eyes 10,000

The greenback snapped back on Wednesday, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR)advancing to 9,971, and the reserve currency looks poised to appreciate further over the next 24-hours of trading as the flight to safety gather pace. As the economic docket remains fairly light for the North American session, risk trends should dictate price action across the major currencies, and the shift away from risk-taking behavior may gather pace going into the middle of the week as fears surrounding the sovereign debt crisis drags on market sentiment. As the USDOLLAR maintains the upward trend from earlier this year, the index looks poised to push back above 10,000 as it carves out a higher floor around 9,900.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

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FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
CAD	14:30	10:30	Bank of Canada Monetary Policy Report
NZD	22:00	18:00	ANZ Job Ads (MoM) (MAR)		5.3%
JPY	22:30	18:30	BoJ Governor Masaaki Shirakawa Speaks on Global Economy
NZD	22:45	18:45	Consumer Prices Index (QoQ) (1Q)	0.6%	-0.3%
NZD	22:45	18:45	Consumer Prices Index (YoY) (1Q)	1.6%	1.8%

Currency	GMT	Release	Expected	Actual	Comments
AUD	0:30	Westpac Leading Index (MoM) (FEB)	--	0.2%	Rises for the third month.
EUR	8:00	Euro-Zone Current Account s.a. (euros) (FEB)	--	-1.3B	Marks the first deficit since October.
EUR	8:00	Euro-Zone Current Account n.s.a. (euros) (FEB)	--	-5.9B
GBP	8:30	Jobless Claims Change (MAR)	6.0K	3.6K	Smallest rise since December.
GBP	8:30	Claimant Count Rate (MAR)	5.0%	4.9%
GBP	8:30	ILO Unemployment Rate (3M) (FEB)	8.4%	8.3%
GBP	8:30	Average Weekly Earnings ex Bonus (3MoY) (FEB)	1.6%	1.6%	Holds steady for the second month.
GBP	8:30	Average Weekly Earnings inc Bonus (3MoY) (FEB)	1.2%	1.1%
EUR	9:00	Euro-Zone Construction Output s.a. (MoM) (FEB)	--	-7.1%	Biggest decline since February 1999.
EUR	9:00	Euro-Zone Construction Output w.d.a. (YoY) (FEB)	--	-12.9%
CHF	9:00	ZEW Survey (Expectations) (APR)	--	2.1	First positive reading since April 2011.
USD	11:00	MBA Mortgage Applications (APR 13)	--	6.9%	Largest advance since February.

USD Index Threatens Broader Trend, Sterling Eyes Fresh 2012 Highs

David Song, Currency Analyst — Tue, 17 Apr 2012 16:20:00 GMT

The greenback has come under pressure during the North American trade, with the Dow Jones-FXCM U.S. Dollar Index slipping to a fresh weekly low of 9,924, and the reserve currency may extend the decline carried over from the previous week as it threatens the upward trending channel from earlier this year.

Index	Last	High	Low	Daily Change (%)	Daily Range (% of ATR)
DJ-FXCM Dollar Index	9933.05	9964.76	9922.78	-0.03	69.55%

The Dow Jones-FXCM U.S. Dollar Index (Ticker: USDollar) is 0.12 percent lower from the open after moving 70 percent of its average true range, and we may see the reserve currency track lower over the remainder of the week as it trades back within the downward trending channel from the beginning of the month. However, we will be closely watching the 30-minute relative strength index over the next 24-hours of trading as there appears to be a bullish divergence in the oscillator, and the technical development certainly foreshadows a short-term rebound for the index, which should preserve support around 9,900. In turn, we may see the dollar regain its footing going into the middle of the week, but risk-trends are expected to dictate price action for the greenback as the economic docket remains fairly light over the coming days.

As the USDOLLAR struggles to hold above the 61.8 percent Fibonacci retracement around 9,949, the index appears to be threatening the upward trending channel from earlier this year, but we will maintain our bullish call on the reserve currency as long as 9,900 holds up. Indeed, the daily RSI paints a bearish outlook for the greenback as the downward trend continues to take shape, and we may see the dollar fall back towards the 50.0 Fib around 9,830 should the divergence continue to play out. As the G20 meeting in Washington comes into focus, the rise in market sentiment may gather pace over the coming days, and we may see market participants continue to move away for the reserve currency as global policy makers pledge to increase their efforts in addressing the risks surrounding the world economy. However, the group may struggle to meet on common ground as the euro-area seeks additional assistance from the global community, and we may see market participants scale back their appetite for risk should world officials fail to instill an improved outlook for the world economy.

Two of the four components advanced against the greenback, led by a 0.46 percent rally in the Australian dollar, which was following by a 0.19 percent gain in the British Pound. Indeed, the sterling extended the advance from earlier this month as sticky price pressures in the U.K. dampens speculation for more quantitative easing, and we may see the Bank of England Minutes push the exchange rate higher as the central bank continues to soften its dovish tone for monetary policy. Indeed, the shift in the policy outlook should prop up the sterling going forward, and the GBPUSD looks poised to mark fresh highs for 2012 as the upward trending channel continues to take shape. In turn, we anticipate to see the pound-dollar to make a run at the 23.6 percent Fib from the 2009 low to high around 1.6250, and we may see the sterling outperform against its major currency counterparts as BoE officials anticipate to see a stronger recovery later this year.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Join us to discuss the outlook for the major currencies on the DailyFX Forums

Euro Poised To Break 1.3000, Bullish Sterling Momentum To Accelerate

David Song, Currency Analyst — Tue, 17 Apr 2012 13:55:00 GMT

Increased demands for Spanish debt propped up market sentiment on Tuesday, but the rebound in risk-taking behavior may be short-lived as the weakening outlook for Europe continues to drag on investor confidence.

Talking Points

Euro: Spain Debt Auction Exceeds Target, IMF Calls For ECB Rate Cut
British Pound: Upward Trending Channel Remains Intact, Inflation Ticks Higher
U.S. Dollar: Struggling On Risk Appetite, 9,900 Key For Index

Euro: Spain Debt Auction Exceeds Target, IMF Calls For ECB Rate Cut

The Euro climbed to an overnight high of 1.3171 as Spain sold EUR 3.18B in short-term bills, which exceeded the EUR 3.0B target, but heightening finance costs across the periphery countries continue to reinforce a bearish outlook for the single currency as European policy makers call for additional monetary support. However, the ECB may have little choice but to preserve its current policy amid the stickiness in price growth, and we may see a growing rift within the Governing Council as the fundamental outlook for the region remains clouded with high uncertainty.

Indeed, ECB board member Miguel Angel Fernandez Ordonez made an attempt to talk down the risk surrounding Spain and said that the region will not need a bailout, but saw little scope to push through another Long Term Refinancing Operation as the non-standard measure appears to be having a limited impact in addressing the risk for contagion. As the debt crisis raises the risk for a prolonged recession, the International Monetary Fund argued that the Governing Council should ‘lower its policy rate while continuing to use unconventional policies to address banks’ funding and liquidity problems,’ and we may see ECB officials show an increased willingness to target the benchmark interest rate as its ballooning balance sheet comes under scrutiny. As the EURUSD struggles to push back above the 50-Day SMA at 1.3208, we should see the bearish formation continue to pan out, and the pair looks poised for a break below 1.3000 as price action approaches the apex of the descending triangle.

British Pound: Upward Trending Channel Remains Intact, Inflation Ticks Higher

The British Pound extended the advance from earlier this week amid heightening price pressures in the U.K., and the stickiness in inflation may prompt the Bank of England to scale back its dovish tone for monetary policy as central bank officials anticipate to see a stronger recovery later this year. As the GBPUSD trades back within the upward trending channel from earlier this year, we will maintain our bullish outlook for the pair, and we may see the pound-dollar mark a 2012 high later this week should the BoE Minutes dampen speculation for more quantitative easing. As the GBPUSD carves out a higher low around 1.5800, the bullish momentum underlining the sterling should continue to gather pace over the near-term, and we may see the pound-dollar ultimately make a run at the 23.6% Fibonacci retracement from the 2009 low to high around 1.6250 as the central bank looks to conclude its easing cycle.

U.S. Dollar: Struggling On Risk Appetite, 9,900 Key For Index

The greenback is struggle to hold its ground on Tuesday, with the with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR)paring the overnight advance to 9,964, and the reserve currency may continue to trade heavy during the North American trade as the rebound in market sentiment gathers pace. As the U.S. equity market tracks higher, the rise in risk-taking behavior looks poised to gather pace over the next 24-hours of trading, but we will stick by our bullish call for the USDOLLAR as the index maintains the upward trend from earlier this year. However, as the economic docket for the U.S. remains fairly light for the remainder of the week, broader risk trends may continue to drive the dollar, and we will be closely watching the 9,900 figure for the index as it holds up as support.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

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FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
			No Scheduled Releases

Currency	GMT	Release	Expected	Actual	Comments
AUD	1:30	New Motor Vehicle Sales (MoM) (MAR)	--	4.0%	Biggest advance since August.
AUD	1:30	New Motor Vehicle Sales (YoY) (MAR)	--	4.0%
CNY	2:00	Actual Foreign Direct Investment (YoY) (MAR)	-13.6%	-6.1%	Largest decline since December.
NZD	3:00	Non Resident Bond Holdings (MAR)	--	60.9%	Highest since October.
JPY	4:00	Tokyo Condominium Sales (YoY) (MAR)	--	-6.1%	First decline since October.
JPY	4:30	Industrial Production (MoM) (FEB F)	--	-1.6%	Weakens for the first time since November.
JPY	4:30	Industrial Production (YoY) (FEB F)	--	1.5%
JPY	4:30	Capacity Utilization (MoM) (FEB F)	--	-1.7%
JPY	5:00	Consumer Confidence (MAR)	40.0	40.3	Highest since February 2011.
EUR	6:00	EU 25 New Car Registrations (MAR)	--	-7.0%	Falls for sixth month.
GBP	8:30	DCLG UK House Prices (YoY) (FEB)	--	0.2%	First rise since March 2011.
GBP	8:30	Consumer Price Index (MoM) (MAR)	0.3%	0.3%	Rises for the first time in six-months, dampening calls for more quantitative easing.
GBP	8:30	Consumer Price Index (YoY) (MAR)	3.5%	3.5%
GBP	8:30	Core CPI (YoY) (MAR)	2.3%	2.5%
GBP	8:30	Retail Price Index (MAR)	240.9	240.8
GBP	8:30	Retail Price Index (MoM) (MAR)	0.4%	0.4%
GBP	8:30	Retail Price Index (YoY) (MAR)	3.6%	3.6%
GBP	8:30	Retail Price Index Ex Mort Int.Payments (YoY) (MAR)	3.7%	3.7%
EUR	9:00	Euro-Zone CPI (MoM) (MAR)	1.2%	1.3%	Holds steady for fourth month.
EUR	9:00	Euro-Zone CPI (YoY) (MAR)	2.6%	2.7%
EUR	9:00	Euro-Zone CPI - Core (YoY) (MAR)	1.5%	1.6%
EUR	9:00	Euro-Zone ZEW Survey (Economic Sentiment) (APR)	--	13.1	Highest since May 2011.
EUR	9:00	German ZEW Survey (Economic Sentiment) (APR)	19.0	23.4	Best print since June 2010.
EUR	9:00	German ZEW Survey (Current Situation) (APR)	35.0	40.7
EUR	9:00	Italian Current Account (euros) (FEB)	--	-5138M	Narrows for the first time since December.
CAD	12:30	Manufacturing Shipments (MoM) (FEB)	-0.3%	-0.3%	Contracts for the second month.
USD	12:30	Housing Starts (MAR)	705K	654K	Largest decline since April 2011.
USD	12:30	Housing Starts (MoM) (MAR)	1.0%	-5.8%
USD	12:30	Building Permits (MAR)	710K	747K	Advances for the third straight month.
USD	12:30	Building Permits (MoM) (MAR)	-0.7%	4.5%
CAD	13:00	Bank of Canada Interest Rate Decision	1.00%	1.00%	Scales back dovish tone.
USD	13:15	Manufacturing Production (MAR)	--	-0.2%	Contracts for the first time since November.
USD	13:15	Industrial Production (MAR)	0.3%	0.0%	Fails to grow for the second month.
USD	13:15	Capacity Utilization (MAR)	78.5%	78.6%

http://www.dailyfx.com/forex_market_news/forecasts/

Bearish Euro Formation Taking Shape, Sterling Threatens Upward Trend

David Song, Currency Analyst — Mon, 16 Apr 2012 13:00:00 GMT

Heightening finance costs across euro-area dragged on market sentiment during the overnight trade, and the shift away from risk-taking behavior may gather pace during the North American session as European policy makers struggle to restore investor confidence.

Talking Points

Euro: Slips Below 1.3000 As Borrowing Costs In Spain Top Pre-LTRO Levels
British Pound: Threatens Upward Trend, Range-Bound Price Ahead
U.S. Dollar: Risk Sentiment Turns Around, Fed Rhetoric In Focus

Euro: Slips Below 1.3000 As Borrowing Costs In Spain Top Pre-LTRO Levels

The Euro slipped to a fresh monthly low of 1.2994 as the yield tied to Spain’s 10-Year debt climbed to the highest level since the European Central Bank conducted its first Long-Term Refinancing Operation in December, and we should see the Governing Council take additional steps to shore up the ailing economy as the governments operating under the single currency become increasingly reliant on monetary support. Indeed, European policy makers are looking to broaden the powers of the ECB as the sovereign debt crisis continues to drag on the real economy and President Mario Draghi may have little choice but to expand the balance sheet further as the EU argues against strengthen the bailout funds for the region.

As the LTRO’s appear to be having a limited impact, European Union Economic and Monetary Affairs Commissioner Olli Rehn called for ‘significant restructuring efforts’ across the commercial banks in Europe, but we may see financial institutions continue to horde cash as the heightening risk for contagion continues to dampen the fundamental outlook for the region. As the descending triangle in the EURUSD continues to take shape, the pair appears to have carved out a lower top 1.3200, and the bearish formation may generate a sharp selloff in the exchange rate as price action approaches the apex. Nevertheless, we are waiting for a close below 1.3000 to see the downward momentum gather pace, and we expect the pair to fall back towards the 23.6% Fibonacci retracement from the 2009 high to the 2010 low around 1.2630-50 as it struggles to maintain the advance from earlier this year.

British Pound: Threatens Upward Trend, Range-Bound Price Ahead

The British Pound pared the overnight decline to 1.5818 to maintain the range-bound price action from earlier this month, and the pair appears to be building a short-term base to make another run at 1.6000. As the GBPUSD struggles to maintain the upward trending channel from earlier this year, we may see the pair track sideways over the near-term, but the Bank of England Minutes may instill a bullish outlook for the sterling should the central bank continue to soften its dovish tone for monetary policy. Although board members David Miles and Adam Posen are expected to vote for another GBP 25B in quantitative easing, the majority of the Monetary Policy Committee may strike an improved outlook for the region, and the central bank may endorse a wait-and-see approach throughout 2012 as BoE officials anticipate to see a stronger recovery later this year. In turn, we may see the GBPUSD hold steady ahead of the BoE Minutes, but the fresh batch of central bank rhetoric should heavily influence the British Pound as market participants weigh the prospects for future policy.

U.S. Dollar: Risk Sentiment Turns Around, Fed Rhetoric In Focus

The greenback continued to recoup the losses from earlier this month, with the with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR)climbing to an overnight high of 9,998, but the reserve currency is struggling to hold its ground as there appears to be a shift in market sentiment. As the U.S equity market opens higher, we may see risk sentiment rebound throughout the North American trade, but the slew of Fed rhetoric on tap for later today may prop up the dollar should the central bank continue to cast an improved outlook for the world’s largest economy. Indeed, the resilience in private sector consumption may encourage the FOMC to soften its dovish tone for monetary policy, and we expect the central bank to conclude its easing cycle in 2012 as the recovery gets on a more sustainable path.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Resume the Downward Trend From 2011? Join us in the Forum

Related Articles: Weekly Currency Trading Forecast

FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
USD	14:00	10:00	Business Inventories (FEB)	0.6%	0.7%
USD	14:00	10:00	NAHB Housing Market Index (APR)	28.0	28.0
EUR	16:30	12:30	ECB's Ewald Nowotny Speaks on Euro Economy
USD	16:30	12:30	Fed's Sandra Pianalto Speaks on U.S. Banking, Economy
USD	19:30	15:30	Fed's James Bullard Speaks on U.S. Economy, Monetary Policy

Currency	GMT	Release	Expected	Actual	Comments
NZD	12:00	REINZ House Sales (YoY) (MAR)	--	25.3%	Slows for the first time since November.
NZD	12:00	REINZ Housing Price Index (MAR)	--	3343.5	Advances for the second straight month.
NZD	12:00	REINZ Housing Price Index (MoM) (MAR)	--	1.9%
NZD	22:30	Performance Services Index (MAR)	--	53.9	Slows for the first time since December.
NZD	22:45	Food Prices (MoM) (MAR)	--	-1.0%	Declines for the first time since October.
GBP	23:01	Rightmove House Prices (MoM) (APR)	--	2.9%	Fastest pace of growth since August 2010.
GBP	23:01	Rightmove House Prices (YoY) (APR)	--	3.4%
JPY	5:30	Tokyo Department Store Sales (YoY) (MAR)	--	26.7%	Highest since records began in 1990.
JPY	5:30	Nationwide Department Store Sales (YoY) (MAR)	--	14.1%	Highest since March 1997.
CHF	7:15	Producer & Import Prices (MoM) (MAR)	0.5%	0.3%	Slowest pace of growth since January.
CHF	7:15	Producer & Import Prices (YoY) (MAR)	-1.8%	-2.0%
EUR	8:00	Italian Trade Balance (Total) (euros) (FEB)	-1337M	-1113M	Smallest deficit since the surplus in December.
EUR	8:00	Italian Trade Balance EU (euros) (FEB)	--	439M
EUR	8:30	Italian Government Debt (FEB)	--	1928.2B	Narrows for the first time since December.
EUR	9:00	Euro-Zone Trade Balance s.a. (euros) (FEB)	5.0B	3.7B	Smallest deficit since October.
EUR	9:00	Euro-Zone Trade Balance (euros) (FEB)	3.0B	2.8B
CAD	12:30	International Securities Transactions (Canadian dollar) (FEB)	4.00B	12.49B	Highest since October.
USD	12:30	Empire Manufacturing (APR)	18.00	6.56	Lowest since November.
USD	12:30	Advance Retail Sales (MAR)	0.3%	0.8%	Advances for the tenth consecutive month.
USD	12:30	Advance Retail Sales Less Autos (MAR)	0.6%	0.8%
USD	12:30	Advance Retail Sales Less Autos & Gas (MAR)	0.5%	0.7%
USD	12:30	Advance Retail Sales "Control Group" (MAR)	0.5%	0.4%
USD	13:00	Total Net TIC Flows (FEB)	$30.0B	$107.7B	Highest since March 2011.
USD	13:00	Net Long-term TIC Flows (FEB)	$40.0B	$10.1B

USD Continues To Build Base For Rally, EUR Stuck In Bearish Formation

David Song, Currency Analyst — Fri, 13 Apr 2012 10:30:00 GMT

Soft growth figures out of China dragged on market sentiment during the overnight trade, and the shift away from risk-taking behavior may continue to prop up the U.S. dollar as the reserve currency benefits from safe-haven flows.

Talking Points

U.S. Dollar: Index Holds Support - Consumer Prices, Fed Chairman Bernanke On Tap
Euro: ECB Borrowing Hits Record In Spain, LTRO’s Only Bought Time
British Pound: Sticky Inflation To Limit Dovish Tone, Upward Trend In Focus

U.S. Dollar: Index Holds Support - Consumer Prices, Fed Chairman Bernanke On Tap

The greenback bounced back on Friday, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR)advancing to an overnight high of 9,944, and the reserve currency may appreciate further during the North American trade should the flight to safety gather pace. Beyond market sentiment, the economic docket is expected to show easing price pressures in the U.S., and a soft inflation report may dampen demands for the greenback as it raises the Fed’s scope to ease monetary policy further.

Nevertheless, we may see New York Fed President William Dudley, who is also a voting member on the FOMC, continue to talk down speculation for more quantitative easing as he sees the recovery getting on a more sustainable path, but the market reaction may be short-lived as we have Fed Chairman Ben Bernanke on the wires at 17:00 GMT. As Fed officials continue to soften their dovish tone for monetary policy, we may see Mr. Bernanke strike a balance outlook for the region, but the central bank head may keep the door open to ease further in an effort to encourage a stronger recovery. Rather than looking at more asset purchases, the FOMC may consider extending ‘Operation Twist’ to further assist the housing market, and the central bank may continue to move away from its easing cycle as the fundamental outlook for the world’s largest economy improves.

Euro:ECB Borrowing Hits Record In Spain, LTRO’s Only Bought Time

The Euro weakened to 1.3142 as market participants scaled backed their appetite for risk, but the weakening outlook for the region continues to instill a bearish forecast for the EURUSD as European policy makers struggle to address the sovereign debt crisis. Indeed, a report by the Bank of Spain showed commercial banks borrowing a record EUR 227.6B in March, rising nearly 50% from the previous month, and the ongoing turmoil in the financial system may lead the European Central Bank to take additional steps in order to avoid a prolonged recession. As the ECB’s Long Term Refinancing Operations appear to be having a limited impact on the real economy, Governing Council member Joerg Asmussen argued that the loans were an effort to buy time, and the central bank may have little choice but to stick to its easing cycle as the governments operating under the single currency become increasingly reliant on monetary support. Although the EURUSD seems to be carving a lower high around 1.3200, we may see 1.3300 come in as resistance as the figure lines up with the upper bounds of the descending triangle, and we anticipate to see a larger decline in the exchange rate as the bearish formation continues to take shape.

British Pound: Sticky Inflation To Limit Dovish Tone, Upward Trend In Focus

The British Pound showed a bullish reaction to the producer price report amid the higher-than-projected print, but the sterling struggled to hold its ground amid the shift away from risk-taking behavior. Nevertheless, the stickiness in price growth may keep the Bank of England on the sidelines as the central bank anticipates to see a stronger recovery later this year, and we may see the sterling track higher next week should the policy meeting minutes dampen expectations for more quantitative easing. Should the MPC continue to soften its dovish outlook for monetary policy, the shift in central bank rhetoric would support our bearish forecast for the GBPUSD, and the pair certainly looks poised to mark fresh highs for 2012 as it maintains the upward trend from earlier this year.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Resume the Downward Trend From 2011? Join us in the Forum

Related Articles: Weekly Currency Trading Forecast

FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
USD	12:00	8:00	Fed's Dudley to Speak on Economy in Buffalo
USD	12:30	8:30	Consumer Price Index (MoM) (MAR)	0.3%	0.4%
USD	12:30	8:30	Consumer Price Index (YoY) (MAR)	2.6%	2.9%
USD	12:30	8:30	Consumer Price Index Ex Food & Energy (MoM) (MAR)	0.2%	0.1%
USD	12:30	8:30	Consumer Price Index Ex Food & Energy (YoY) (MAR)	2.2%	2.2%
USD	12:30	8:30	Consumer Price Index n.s.a. (MAR)	229.352	227.663
USD	12:30	8:30	Consumer Price Index Core Index s.a. (MAR)		227.907
USD	13:55	9:55	U. of Michigan Confidence (APR P)	76.5	76.2
USD	17:00	13:00	Fed Chairman Ben Bernanke Speaks on the Financial Crisis

Currency	GMT	Release	Expected	Actual	Comments
CNY	2:00	Industrial Production (YTD) (YoY) (MAR)	11.3%	11.6%	Slowest pace of growth since July 2009.
CNY	2:00	Industrial Production (YoY) (MAR)	11.5%	11.9%
CNY	2:00	Fixed Assets Investment ex Rural (YTD) (YoY) (MAR)	21.0%	20.9%	Lowest since December 2002.
CNY	2:00	Real GDP (YTD) (YoY) (1Q)	8.4%	8.1%	Slowest pace of growth since 2Q 2009.
CNY	2:00	Real GDP (QoQ) (1Q)	1.9%	1.8%
CNY	2:00	Real GDP (YoY) (1Q)	8.4%	8.1%
CNY	2:00	Retail Sales (YTD) (YoY) (MAR)	14.8%	14.8%	Lowest reading since February 2011.
CNY	2:00	Retail Sales (YoY) (MAR)	15.1%	15.2%
EUR	6:00	German CPI (MoM) (MAR F)	0.3%	0.3%	Slowest pace of growth since January.
EUR	6:00	German CPI (YoY) (MAR F)	2.1%	2.1%
EUR	6:00	German CPI - EU Harmonised (MoM) (MAR F)	0.4%	0.4%
EUR	6:00	German CPI - EU Harmonised (YoY) (MAR F)	2.3%	2.3%
EUR	8:00	Italian Industrial Production s.a. (MoM) (FEB)	-0.7%	-0.7%	Contracts for the second consecutive month.
EUR	8:00	Italian Industrial Production w.d.a. (YoY) (FEB)	-5.1%	-6.8%
EUR	8:00	Italian Industrial Production n.s.a. (YoY) (FEB)	--	-3.5%
GBP	8:30	PPI Input n.s.a. (MoM) (MAR)	1.4%	1.9%	Lowest since November 2009.
GBP	8:30	PPI Input n.s.a. (YoY) (MAR)	4.8%	5.8%
GBP	8:30	PPI Output n.s.a. (MoM) (MAR)	0.5%	0.6%	Slowest pace of growth since January 2010.
GBP	8:30	PPI Output n.s.a. (YoY) (MAR)	3.5%	3.6%
GBP	8:30	PPI Output Core n.s.a. (MoM) (MAR)	0.2%	0.1%
GBP	8:30	PPI Output Core n.s.a. (YoY) (MAR)	2.6%	2.5%
EUR	9:00	Italian CPI (NIC incl. tobacco) (MoM) (MAR F)	0.5%	0.5%	Headline reading for inflation holds steady for the second month.
EUR	9:00	Italian CPI (NIC incl. tobacco) (YoY) (MAR F)	3.3%	3.3%
EUR	9:00	Italian CPI - EU Harmonized (MoM) (MAR F)	2.5%	2.5%
EUR	9:00	Italian CPI - EU Harmonized (YoY) (MAR F)	3.8%	3.8%

http://forexforums.dailyfx.com/eur-usd/

Euro Relief Rally To Set Lower Top, Sterling Eyes Fresh Highs

David Song, Currency Analyst — Thu, 12 Apr 2012 13:35:00 GMT

The Euro continued to gain ground on Thursday despite the dismal bond auction in Italy, but we will stick with our bearish bias for the EURUSD as the fundamental outlook for the Europe remains weak.

Talking Points

Euro: ECB Softens Dovish Tone, Italy Bond Auction Disappoints
British Pound: Poised For Fresh Yearly High As Upward Trend Gathers Pace
U.S. Dollar: Index Eyes 9,900 For Support, Fed Officials In Focus

Euro:ECB Softens Dovish Tone, Italy Bond Auction Disappoints

The Euro climbed to a fresh weekly high of 1.3175 as the European Central Bank pledged to ‘address upside risks to medium-term price stability in a firm and timely manner,’ but we are likely to see the Governing Council take additional steps to shore up the ailing economy as the sovereign debt crisis continues to heighten the risk for a prolonged recession. Indeed, Italy sold EUR 2.88B in 3-year bonds versus the EUR 3.00B target, while the government offered 3.89% on its debt, which compares to the 2.76% yield seen in March.

Meanwhile, ECB board member Joerg Asmussen argued that commercial banks in Ireland need to ‘substantial’ reduce their reliance on central bank funding, and it seems as though the Governing Council is looking to preserve a wait-and-see approach throughout the remainder of the year as it maintains its one and only mandate to ensure price stability. However, the ECB may have little choice but to expand policy further as the debt crisis continues to drag on investor confidence, and the threat for contagion may bring about another wave of non-standard measures as the governments operating under the single currency become increasingly reliant on monetary support. As there appears to be a descending triangle in the EURUSD, we will maintain our bearish outlook for the pair, and we may see the pair carve out another lower top ahead of May as the relative strength index maintains the downward trend from earlier this year. In turn, the short-term rebound in the exchange rate may provide a selling opportunity for FX traders, and we should see 1.3000 ultimately give way as the debt crisis continues to dampen the fundamental outlook for the region.

British Pound: Poised For Fresh Yearly High As Upward Trend Gathers Pace

The British Pound extended the advance from earlier this week amid the rise in risk-taking behavior, and we expect to see fresh yearly highs in the GBPUSD as the upward trending channel continues to take shape. However, as the economic docket is expected to show easing price pressures in the U.K., we may see the GBPUSD consolidate going into the end of the week, and we will look to buy the pair on a pullback as it carves out a higher low in April. As the Bank of England is scheduled to release its policy meeting minutes next week, the fresh batch of central bank rhetoric could set the stage for another move to the upside, and we may see the sterling outperform against its major counterparts should the Monetary Policy Committee continue to soften its dovish tone for monetary policy.

U.S. Dollar: Index Eyes 9,900 For Support, Fed Officials In Focus

The greenback tumbled lower on Thursday, with the Dow Jones-FXCM U.S. Dollar Index (Ticker: USDOLLAR)slipping to a fresh weekly low of 9,913, and the reserve currency may track lower throughout the North American trade as the U.S. equity market continues to pare the decline from earlier this week. As the rise in risk-taking behavior gathers pace, we may see the dollar index fall back towards 9,900 to test for interim support, and the slew of central bank rhetoric on tap for later today may help to prop up the greenback should Fed officials talk down speculation for additional monetary support. Indeed, we will be closely watching the remarks from FOMC voting members William Dudley and Sarah Bloom Raskin as central bank officials take note of the more robust recovery, and we may see the committee continue to soften its dovish tone for monetary policy as the fundamental outlook for the world’s largest economy improves.

--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong

To be added to David's e-mail distribution list, send an e-mail with subject line "Distribution List" to dsong@dailyfx.com.

Will the EUR/USD Resume the Downward Trend From 2011? Join us in the Forum

Related Articles: Weekly Currency Trading Forecast

FX Upcoming

Currency	GMT	EDT	Release	Expected	Prior
USD	15:00	11:00	Fed's William Dudley Speaks on U.S. Economy
EUR	15:45	11:45	ECB's Carlos Costa Speaks on Euro Economy
USD	16:30	12:30	Fed's Charles Plosser Speaks on U.S. Economy
USD	17:00	13:00	Fed's Narayana Kocherlakota Speaks on U.S. Economy
GBP	18:00	14:00	BoE's Adam Posen Speaks on Financial Stability
USD	19:30	15:30	Fed's Sarah Bloom Raskin Speaks on U.S. Economy

Currency	GMT	Release	Expected	Actual	Comments
NZD	22:30	Business NZ Performance of Manufacturing Index (MAR)	--	54.5	Slows for the first time since June.
NZD	22:45	Card Spending - Retail (MoM) (MAR)	0.4%	0.3%	Rises for the third time in the last six-months.
NZD	22:45	Card Spending - Total (MoM) (MAR)	0.5%	-0.2%
JPY	23:50	Japan Money Stock M2+CD (YoY) (MAR)	2.8%	3.0%	Rises for the first time since December.
JPY	23:50	Japan Money Stock M3 (YoY) (MAR)	2.5%	2.6%
JPY	23:50	Domestic Corporate Goods Price Index (MoM) (MAR)	0.4%	0.6%	Holds steady for the second month.
JPY	23:50	Domestic Corporate Goods Price Index (YoY) (MAR)	0.4%	0.6%
NZD	0:00	QV House Prices (YoY) (MAR)	--	3.0%	Fastest pace of growth since August 2010.
AUD	1:00	Consumer Inflation Expectation (APR)	--	3.3%	Highest since July 2011.
AUD	1:30	Employment Change (MAR)	6.5K	44.0K	Biggest rise since January, jobless rate holds steady for second month.
AUD	1:30	Unemployment Rate (MAR)	5.3%	5.2%
AUD	1:30	Full Time Employment Change (MAR)	--	15.8K
AUD	1:30	Part Time Employment Change (MAR)	--	28.2K
AUD	1:30	Participation Rate (MAR)	65.3%	65.4%
EUR	5:30	French CPI (MoM) (MAR)	0.6%	0.8%	Headline reading holds steady for the third month.
EUR	5:30	French CPI (YoY) (MAR)	2.1%	2.3%
EUR	5:30	French CPI - EU Harmonised (MoM) (MAR)	0.7%	0.9%
EUR	5:30	French CPI - EU Harmonised (YoY) (MAR)	2.3%	2.6%
EUR	5:30	French CPI Ex Tobacco Index (MAR)	124.38	124.63
EUR	6:45	French Current Account (euros) (FEB)	--	-5.0B	Largest deficit since May 2011.
GBP	8:30	Visible Trade Balance (Pounds) (FEB)	-7.650B	-8.772B	Largest deficit since November.
GBP	8:30	Trade Balance Non EU (Pounds) (FEB)	-3.825B	-5.017B
GBP	8:30	Total Trade Balance (Pounds) (FEB)	-2.000B	-3.396B
EUR	9:00	Euro-Zone Industrial Production s.a. (MoM) (FEB)	-0.2%	0.5%	Rises for the first time since August.
EUR	9:00	Euro-Zone Industrial Production w.d.a. (YoY) (FEB)	-1.8%	-1.8%
CAD	12:30	New Housing Price Index (MoM) (FEB)	0.2%	0.3%	Fastest pace of growth since November.
CAD	12:30	New Housing Price Index (YoY) (FEB)	--	2.3%
CAD	12:30	International Merchandise Trade (Canadian dollar) (FEB)	2.30B	0.29B	Surplus narrows for the second month.
USD	12:30	Trade Balance (FEB)	-$52.0B	-$46.0B	Narrows as oil imports fell the most in 15-years.
USD	12:30	Producer Price Index (MoM) (MAR)	0.3%	0.0%	Slowest pace of growth since June 2010.
USD	12:30	Producer Price Index (YoY) (MAR)	3.1%	2.8%
USD	12:30	PPI Ex Food & Energy (MoM) (MAR)	0.2%	0.3%
USD	12:30	PPI Ex Food & Energy (YoY) (MAR)	2.8%	2.9%
USD	12:30	Initial Jobless Claims (APR 7)	355K	380K	Highest since January.
USD	12:30	Continuing Claims (MAR 31)	3328K	3251K	Lowest since July 2008.

DailyFX - DailyFX Daily Briefing - US

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