Forex Crunch

Wednesday, June 24, 2009

Forex Crunch

Forex Daily Outlook - June 24th 2009

Posted: 23 Jun 2009 02:00 PM PDT

Big day today in the forex market - the FOMC Statement is made. What will Bernanke hint about future interest rates? Apart from tensions towards the statement, the market will move on other important figures. Here’s the menu:

Iran is still in the news. How will the public react to the regime’s refusal to nullify the election results. Up to now, the Iran election crisis supported the dollar.

In New Zealand, Westpac Consumer Sentiment will shake the kiwi. BOJ Governor Masaaki Shirakawa will speak about the Japanese economy.

After hitting 1.40, EUR/USD will be moved today by the Current Account, which is expected to show a deficit of 4.7 billion. In Switzerland, SNB Governing Board Chairman Jean-Pierre Roth will talk.

It’s a big day in Britain, as well, with many important events. CBI Realized Sales will start, and it’s expected to fall by 17 points. Later, Inflation Report Hearings are due in the parliament, and they will be interesting to follow. A speech by BOE Governor Mervyn King will close the Pound’s events, long enough before the FOMC Statement.

For more on the British Pound, check out the British Pound Outlook.

In the US, Durable Goods Orders are expected to fall by 0.6%. After the disappointing Existing Home Sales, this could disappoint as well. The Core Durable Goods Orders are also expected to fall, this time by 0.2%.

And if we’re talking about home sales, today it’s the turn of the New Home Sales, which are expected to rise to 360K. As aforementioned, the disappointing yesterday, it could be lower.

FOMC Statement - the event that all eyes are looking at happens at 18:15 GMT. The big question is about the future interest rate. Will Ben Bernanke hint about a raise sooner than later? Or will he calm the markets with declaring no hikes till the end of the year?

For traders of the kiwi, the day isn’t over - Current Account is published at 22:45 GMT, and the deficit is expected to squeeze to 1.26 billion.

Another note: the Canadian dollar has crossed the critical 1.1470 resistance line. USD/CAD is now supported by this line, that was already tested after Moody’s sent the dollar down. Now this support line seems stable.

For more the loonie, read the Canadian Dollar Outlook.