Forex Investment and Currency Trading

Eurozone Wednesday’s data releases confirmed that April has seen a significant decline in business and consumer confidence, while inflation surprised on the downside compared to initial expectations. According to the European Commission index, the business climate index declined to 0.44 in April from a downward revised 0.79 in March. Consumer confidence was unchanged at -12. The overall economic confidence index fell to 97.1 from 99.6. As for inflation, the Euro area HICP inflation rate was 3.3% yoy, down from 3.6% in March. Country-specific data show that inflation fell most sharply in Germany, but it also declined in Spain, Belgium and [...]

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After a strong performance in the latter half of last week, USD was slightly weaker overnight with DXY dipping down to a low of 72.47. There are a number of key US data releases in the week ahead providing significant event risk for USD. The FOMC announces rates on Wednesday, when the market expects 25bp of easing to leave rates at 2.00%. Wednesday also sees the release of the 1st estimate of Q1 GDP which RBC expect at 0.5%m/m, while on Friday, market forecasts April Nonfarm payrolls to print at -80K. Other releases of note include Chicago PMI (Wed) and ISM [...]

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Canadian Economic Data and Events
                                                                                                                                                                                                                                                    110:30 Bank of Canada Monetary Policy Report                             
The Monetary Policy Report (MPR) will expand on the forecast changes included in the press release issued at the conclusion of Tuesday’s policy-setting meeting. In the press release, it was indicated that the Bank shaved their 2008 growth forecast to 1.4% from 1.8%, citing a “deeper and more protracted” U.S. slowdown coupled with more moderate business and consumer spending owing to tighter credit conditions.  These same factors have also resulted in a downgrade to their 2009 outlook for GDP growth as well.  Their new projections see the economy growing by [...]

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USD Despite the EUR/USD surge above 1.60, the USD Index did not fall to a record low. However, the likelihood of a setback in US interest rate expectations suggests new record lows during the weeks ahead.
EUR EUR/USD rose to a record high on continued hawkish ECB rhetoric. Market expects the break above 1.60 to be sustained with further EUR/USD gains during the weeks ahead.
JPY The JPY remains more vulnerable to risk appetite developments than Japan’s fundamentals and politics. Moderating risk aversion suggests limited risks of sharp USD/JPY declines.
GBP The BoE program to provide liquid bills in exchange for less liquid [...]

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USD (Current Rate = 2.25%)   
Meeting Market Rate Cumulative (BPs) Cumulative Probability of a 25 bps move
30-Apr 2.00%                      -25 
25-Jun 1.97%                      -28 
   
   
EUR (Current rate = 4%)   
Meeting Market Rate Cumulative (BPs) Cumulative Probability of a 25 bps move
08-May 4.00%                        0 0%
05-Jun 4.00%                        0 0%
   
AUD (Current rate = 7.25%)   
Meeting Market Rate Cumulative (BPs) Cumulative Probability of a 25 bps move
01-Apr 7.25%                        0 0%
06-May 7.27%                        2 8%
03-Jun 7.28%                        3 12%
   
CAD (Current rate = 3.5%)   
Meeting Market Rate Cumulative (BPs) Cumulative Probability of a 25 bps move
22-Apr 3.04%                      -46 
10-Jun 2.86%                      -64 
   
NZD (Current rate = 8.25%)   
Meeting Market Rate Cumulative (BPs) Cumulative Probability of a 25 bps move
24-Apr 8.25%                        0 0%
05-Jun 8.25%                        0 0%
GBP (Current rate = 5%   
Meeting Market Rate Cumulative (BPs) Cumulative Probability of a 25 bps move
08-May 4.92%                       -8 
05-Jun 4.81%                      -19 
   
SEK (Current rate = 4.25%)   
Meeting Market Rate Cumulative (BPs) Cumulative Probability of a 25 bps move
23-Apr 4.25%                        0 0%
   
   
   
JPY (Current [...]

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