Source: ForexYard
Today starts with Federal Open Market Committee statement, followed by GfK German Consumer Climate in Europe. The market disregards the European troubles. In the past week, the focus was on the Spanish credit crunch. Nevertheless, the Euro continued recovering, and so did other currencies, that truly enjoy good economies, such the Canadian Dollar.
American figures will dominate the scene today with New Home Sales expected to drop this month reaching 424K after the sharp rise in May’s report. The U.S. Dollar continued its consolidation last week falling against all the major world currencies and down especially against the commodities dollars of Australia, New Zealand and Canada.
Here’s an outlook for the major market moving events this Wednesday.
08:00 GMT EUR Flash Services PMI
Published on Wednesday, starting in France at 7:00 GMT, then in Germany at 7:30 and finally for the whole Euro-zone at 8:00 GMT. All the purchasing managers’ indices have been positive for several months, with the French services sector being the strongest at 61.4. And now, all of them are expected to remain positive, above 50 which mean economic expansion.
Although the Euro fell strongly in the past few weeks it is now stabilizing. Still, the European debt problems continue to loom over the single currency. But in the long term the Euro will resume falling and face more losses. In the meantime, range trading is more probable with the near-term support at $1.2220.
08:30 GMT GBP MPC Meeting Minutes
It’s a detailed record of the BOE MPC’s most recent meeting, providing in-depth insights into the economic conditions in U.K. In his last decision, Mervyn King made no change – he left the interest rate at the historic low of 0.5% and continued dismissing the rising inflation. We’ll now get to hear if any of the 9 member voted to raise the rate. Any outcome which isn’t unanimous will boost the Pound.
14:00 GMT USD New Home Sales
This indicator is expected to be different this time, and drop from 504K to 435K. Note that the impact will be rather muted due to the upcoming to rate decision. Nervous trading is predicted, as the greenback may continue weakening against the yen, pound and franc.
18:15 GMT USD Federal Funds Rate
The Federal Open Market Committee is expected to hold the benchmark interest rate at a record low range of zero to 0.25%. Employment is still problematic in the US, and inflation doesn’t pose a threat. Yet again, the focus won’t be on the Federal Funds Rate, but on the accompanying FOMC Statement. The greenback will likely to move higher after this release. A break down of 1.2220, the next major support line will open a way to 1.2160 & 1.20 in extension.
Forex Market Analysis provided by ForexYard.
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