Thursday’s Forex Outlook

The Dollar declined its weakest level versus the Euro in almost a year as an increase in America’s industrial output encouraged investors to sell the U.S. currency and buy higher-yielding assets. The CPI came out unchanged at 0.10%. TIC Net Long-Term Transactions came out worse than forecast at 15.3B vs. 60.30B also Current Account came out worse at -98.8B vs. -92.0B forecast. NASDAQ and Dow Jones rose by 1.45% and 1.12% respectively, Crude oil strengthened by 1.4% closing at 72.5$ a barrel, Gold (XAU) rose by 1.45% reaching its highest price in 18 months closing at 1020.2$ an ounce. Today, Initial Jobless Claims are expected to remain unchanged at 555K and Philadelphia\’s Fed Manufacturing Index is expected at 8.1 vs. 4.2 prior.

EURO (EUR)

The Euro gained versus the Dollar as traders succeeded in pushing the currency past $1.4720, a technical level just above December 2008 highs. Overall, EUR/USD traded with a low of 1.4640 and with a high of 1.4737. The CPI was published and remained at -0.20%. Today, Trade Balance is expected at 1.2B vs. 1.0B prior.

EUR/USD - Last: 1.472

British Pound (GBP) -

The Pound traded with a narrow range versus the Dollar closing almost unchanged after Unemployment Rate came out better than expected at 7.9% vs. 8.0% forecast but the Average Earnings Index came out worse at 1.7% vs. 2.10% expected. Overall, GBP/USD traded with a low of 1.6432 and with a high of 1.6532. Today, Retail Sales are expected at 0.30% vs. 0.40% prior, CBI Industrial Trends Orders are expected at -49 vs. -54 forecast.

GBP/USD - Last: 1.65

Japanese Yen (JPY) -

The Yen weakened mildly versus most majors after Governor Masaaki Shirakawa and his colleagues said that they don’t want to interrupt the Forex market. USD/JPY traded with a low of 90.12 and with a high of 91.36. No economic data expected today.

USD/JPY-Last: 91.10

Canadian dollar (CAD) -

The Canadian dollar continued to advance versus the Dollar as manufacturing came out better than the forecast at 5.5% vs. 2.3%. Overall, USD/CAD traded with a low of 1.0643 and with a high of 1.0736. Today, The CPI is expected to rise by 0.30% vs. -0.30% prior and Leading Indicators are expected at 0.50% vs. 0.40% previously.

CAD/USD - Last: 1.0660

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