EUR/USD News, Oct.18-22, 2010

EUR/USD

Last week the euro’s growth slowed down although it still attempted to race against the dollar until the middle of the week. On Monday, Oct. 11 it opened the week at 1.3995 and closed it at 1.3975 dollars on Friday, Oct. 15. The highest the euro managed to reach during the previous week was 1.4158 on Friday.

The opening price of the euro this Monday was 1.3951 and is currently 1.3945. The euro fell 1% versus the U.S. dollar on a broad short-covering rally in the U.S. currency, which triggered stop-loss orders, reported Reuters.

The dollar also rose from a 10-month low against several other currencies (such as the Australian dollar) on Monday for the second straight session as investors continued to bet recent declines against the greenback are overdone.

Tuesday

Current Account, 9:00 a.m. GMT. The current account measures the difference in value between imported and exported goods, services, income flows, and unilateral transfers during the previous month. It’s an important index for investors as a rising surplus indicates that foreigners are buying more of the domestic currency to use for transactions in the area.

German ZEW Economic Sentiment, 10:00 a.m. GMT. ZEW=Zentrum for Europaische Wirtschaftsforschung. For this index, 350 German institutional investors and analysts are asked to rate the 6-month economic outlook for Germany in a survey. The German economic sentiment is a leading indicator of economic health because investors and analysts are highly informed by virtue of their job, and every change in their sentiment signals of future economic activity. The index is predicted to fall down to -7 this month from the current -4.3.

Buba President Weber Speaks, 3:00 p.m. GMT. Buba=Deutsche Bundesbank, ECB=European Central Bank. The Deutsche Bundesbank President Axel Weber will speak on Tuesday about the path to a more stable financial system. The event will take place in Munich.

Wednesday

German PPI m/m, 7:00 a.m. GMT. PPI=Producer Price Index. The index measures the change in the price of goods sold by manufacturers. It is also a major indicator of consumer inflation – if manufacturers charge more for goods, the consumer will be affected with higher costs as well. Last month’s 0.0% is predicted to rise to 0.2% this time. If the forecast comes true, it will have a positive effect on the currency.

Thursday

French Flash Manufacturing PMI, 8:00 a.m. GMT. PMI=Purchasing Managers’ Index. This index is also a major indicator of economic health because the purchasing managers are expected to hold the most current and relevant insight into the company’s view of the economy. A small decrease is expected this month – from the current 56.0 to 55.3 which, if true, should not affect significantly the economy.

French Flash Services PMI, 8:00 a.m. GMT. While the Manufacturing PMI concerns the purchasing managers in the manufacturing industry, the Services PMI is the index related to the purchasing managers in the services industry, and is as important. Experts say the index will show a little decrease this month – from 58.2 to 57.5.

German Flash Manufacturing PMI and German Flash Services PMI, 8:30 a.m. GMT. These two indexes are the same as the above two, but are focused on the German market instead. The Manufacturing PMI is said slightly decrease to 54.6 from the current 55.1. The Services PMI is predicted to go down a bit by 0.2 points (from 54.9 to 54.7).

Friday

German Ifo Business Climate, 9:00 a.m. GMT. Ifo=Information and Forschung. In a survey, 7,000 businesses are asked to rate the level of current business conditions and expectations for the next 6 months. The index is also of a high impact because businesses react quickly to market conditions, and can signal of future economic activities such as spending, hiring, and investment.  The forecast shows an insignificant decrease from 106.8 to 106.5.

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