Sunday, January 23, 2011

Forex Weekly Outlook - January 24-28: US CB Consumer Confidence, US Rate Decision and US Unemployment Claims are the main activities this week

*US CB Consumer Confidence, US Rate Decision and US Unemployment
Claims are the main activities this week. Here is an outlook on key
events to watch for.*

Analysts and investors look forward to earnings reports from major
U.S. manufacturers over the next two weeks, in order to assess revenue
growth. This is the best indicator of health for the industrial sector
over the next year. Sales growth will be critical to profits and will
disclose whether recovery is real.**

* *Australian Inflation Data:* Monday, 0:30. CPI rose 0.7% in the
September quarter, for an annual rate of 2.8 percent. The figures
were less than economists had predicted although removing some
urgency for the Reserve Bank to lift rates. However, there is
almost certainly to be another string of rate rises at some point
over the next months. A further rise of 0.8% is expected now.

* *Japan**'s Rate Decision:* Tuesday. The central bank left its
credit programs unchanged and kept the key interest rate between
zero and 0.1 percent. The rate decision was given by a unanimous
vote. The BOJ left the size of its asset-buying fund at 5 trillion
yen ($60 billion) and the credit program at 30 trillion yen. The
bank will steadily purchase various financial assets and provide
longer-term funds to efficiently affect the market. The rate is
expected to remain 0.10%.

* *Canadian inflation Data:* Tuesday, 12:00. Bank of Canada kept its
overnight rate at 1%. The main concerns impelled it to keep the
overnight rate at 1% were the weak exports and the sovereign debt
crisis in Europe. The bank rate stays at 1.25% and the deposit
rate at 0.75%. According to U.S. counterpart Scotiabank chief
economist Warren Jestin the Bank of Canada is not expected to
raise rates until the fourth quarter and there is even a chance
the next move could even be downwards if the loonie strengthens
too much. Inflation rate is forecasted to drop by -0.1%.

* *US CB Consumer Confidence:* Tuesday, 14:00. Consumer confidence
has gone down by 1.8 to 52.5 in the month of December despite the
encouraging consumer spending data. Based on 5000 surveyed
households this index is a leading indicator of consumer
confidence. Nevertheless consumer confidence in December is no
worse off than it was a year ago suggesting that the economic
expansion will continue well into 2011. An improvement in Consumer
Confidence is expected with 54.5 reading.

* *US New Home Sales:* Wednesday, 15:00. New home sales, like
existing home sales, show a promising improvement in November. New
home sales rose 5.5 % to a 290,000 unit annual rate. Previously
released data on pending home sales point to continuing strength
for the housing sector. The growth trend is expected to continue
with 303,000 units forecast.

* *US Rate Decision:* Wednesday, 19:15. At the last monetary policy
meeting The Fed said it would continue buying long-term Treasury
notes from banks to promote a stronger economic recovery and the
Fed's rate-setting Open Market Committee kept the key short-term
interest rate near zero. The Fed's rate is expected to be

* *New Zealand Rate Decision:* Wednesday, 20:00. New Zealand's
central bank has executed two rate increases of 25 basis points
each in June and July 2010. Since then, no further change in
rates was made. Interest rates are predicted to rise moderately
over the next two years, for now it seems prudent to keep the OCR
low until the recovery becomes more robust and underlying
inflationary pressures show more obvious signs of increasing. The
same rate of 3.0% is predicted.

* *US Core Durable Goods Orders:* Thursday, 13:30. Core Durable
Goods Orders excluding transport made a big jump by increasing
2.4% the largest increase since March, after a 1.9 percent drop in
October. However, overall orders dropped by a larger than expected
1.3 percent last month, dragged down by a plunge in bookings for
civilian aircraft and motor vehicles. Nevertheless it is still
encouraging news for producers. An increase of 0.9% is expected

* *US Uemployment Claims:* Thursday, 13:30. The number new claims
for unemployment benefits fell by 37,000 to 404,000. The decrease
was more than the expected forecast of 420,000. Following the
signs of growth in the US economy at the end of last year,
companies started hiring more workers and improving the labor
market. A small rise to 409,000 is anricipated.

* *American Pending Home Sales:* Thursday, 15:00. The number of
contracts to buy existing homes rose 3.5% in November 1.8% more
than forecasted signaling improvement in sales following a
post-tax credit plunge. Housing demand should continue its
recovery entering as housing oversupply should keep pushing
housing prices down. A rise of 1.1% is expected this time.

* *US* *Advance GDP*: Friday, 13:30. The third quarter Advance GDP
increased by 2.0% and revised up to 2.6% in the second estimate
following 1.7% increase in the second quarter due to rising
personal consumption expenditures (PCE), private inventory
investment, nonresidential fixed investment, federal government
spending, and exports. GDP is expected to continue its growth by
* All times are GMT.

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