Sunday, January 16, 2011

Forex Weekly Outlook - January 17-21: A busy schedule awaits Forex traders this week with the Euro-Zone German ZEW Economic Sentiment

*A busy schedule awaits Forex traders this week with the Euro-Zone
German ZEW Economic Sentiment*, *American* *TIC Long-Term Purchases,
British and American employment data and many more influential events.
Here is an outlook on the major market-movers this week.*

The U.S. Federal Reserve's $600 billion bond-buying program is
likely to continue in light of recent data indicating that the
battered U.S. economy is slowly recovering. Atlanta Federal Reserve
Bank President Dennis Lockhart claims that QE2 had a positive role in
this recovery and purchases should proceed as planned. Will we see a
robust recovery in the US market this year?

* *Britain* *Inflation Report:* Tuesday, 9:30. The UK annual
inflation rate rose 3.3% in November from 3.2% in October thanks
to a price rise in food, clothing and furniture. Due to the VAT
increase CPI is expected to hit 4% in 2011. Inflation rate is
expected to remain 3.3% this month.

* *Euro-Zone German ZEW Economic Sentiment:* Tuesday, 10:00. German
economic sentiment rose to 4.3 in December more-than the 3.8 rise
expected. This is the second consecutive rise indicating optimism
among investors and analysts owing to a rise in export and
domestic demand as well as positive labor market conditions.
Further improvement is expected this month with a 5.9 reading.

* *Canada* *Rate Decision:* Tuesday, 14:00. The Bank of Canada
maintained its target for the overnight rate at 1% claiming the
recovery in Canada is proceeding at a moderate pace though exports
were weaker than expected and continued to weigh on growth. The
Current overnight rate provides monetary stimulus to the market
and may raise inflation rate target to 2%. The rate is expected to
remain 1%.

* *US TIC Long-Term Purchases:* Tuesday, 14:00. U.S. Treasury
International Capital purchases representing the balance of
domestic and foreign investment, plunged unexpectedly to USD 27.6
billion in October after USD 77.2 billion in September. Analysts
had expected purchases of long-term securities to increase to USD
82.3 billion in October. A rise to USD 46.7 billion is predicted

* *Britain**, Employment data:* Wednesday, 9:30. The number of
people claiming unemployment benefits in the U.K. fell 1,200 in
November after a drop of 5,200 in October. Analysts had expected
the claimant count to fall by 3,000 in November. However, the
total is still well above its pre-recession level of 5,086 in
November 2008. Further improvement is expected with a decrease of
1,400 in the number of unemployed.

* *US Building Permits:* Wednesday, 13:30. The number of building
permits issued in the U.S. in November fell 4.0% to 530.000 down
from 0.55 million in October after 570.000 was expected while
housing starts rose more-than-expected to a seasonally adjusted
0.56 million, after falling to 0.53 million in October. A climb to
0.56 million is expected this month.

* *US Unemployment Claims:* Thursday, 13:30. The number of Americans
filing first-time claims for unemployment surged last week to the
highest level since October following the holidays. Unemployment
Claims increased by 35,000 to 445,000 while economists expected
410,000. U.S. added fewer jobs than forecasted in December,
showing the labor market is still struggling with slow economic
growth. Following the big climb last week a smaller number of
426,000 is predicted now.

* *Canada* *BOC Monetary Policy Report:* Thursday, 14:30. The Bank
of Canada maintained its benchmark interest rate steady at 1.0 %
stating in its Monetary Policy Report that there was still
considerable monetary stimulus in place. The BOC Press
Conference scheduled at 15:15 will shed more light on further
monetary policy.

* *US Existing Home Sales:* Thursday, 15:00. Existing homes Sales
rose to a 4.68 million annual rate in November 5.6 % better than
in the prior month but slightly lower than the 4.75 million
forecasted. Economists predict sales would rise since previous
decreases in prices and mortgage rates have made houses more
affordable, stimulating demand after the end of a government tax
credit caused the industry to slump. A rise to 4.92 million is

* *American Philly Fed Manufacturing Index*: Thursday, 15:00.
Factory activity growth in the U.S. rose to 24.3 in December after
22.5 in the month before. This is considered the highest reading
since April 2005. Economists had expected a reading of just 15.0.
The survey covers factories in eastern Pennsylvania, southern New
Jersey and Delaware and perceived as the first monthly indicator
of U.S. manufacturing leading up to the national report by the
Institute for Supply Management, which is next due in January. A
small decrease to 22.3 is expected now.
* All times are GMT.

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