By Dan Eduard – Upbeat US data gave riskier currencies a rare boost yesterday, as investor confidence in the global economic recovery went up. A batch of new data today will largely determine whether the currencies like the euro and UK pound will be able to extend their gains.
Here is a roundup of the day’s main news events:
11:45 GMT: EUR Minimum Bid Rate
The Minimum Bid Rate is the euro zone’s short term interest rate for refinancing operations. Interest rates are considered one of the more crucial indicators in any economy, and as such, continuously lead to market volatility. While a change from the existing 1.00% rate is not predicted, traders will want to also pay attention to any surprises from the ECB press conference, scheduled for 45 minutes after the rate is announced.
Should the ECB voice any optimism regarding the pace of the euro zone economic recovery, riskier currencies like the euro and sterling will likely extend their bullish trends throughout the day. At the same time, if the ECB voices pessimism regarding Europe’s pace of recovery, safe haven currencies like the USD could make a comeback.
12:30 GMT: USD Unemployment Claims
The US weekly Unemployment Claims figure measures the number of people who filed for first-time unemployment insurance over the last 7 days. With the employment situation at the forefront of the US economic recovery, this figure has consistently led to market volatility.
Last week’s unemployment figure came in slightly below expectations, resulting in a boost for riskier currencies. This week, analysts are predicting a slight increase in unemployment. If true, traders can expect the safe haven currencies to stage a slight comeback in afternoon trading. At the same time, this figure is notoriously difficult to predict. Anything below the forecasted number may lead to risk taking, and a boost for the euro.
Forex Market Analysis provided by ForexYard.
© 2006 by FxYard Ltd
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