Last Friday’s US non-farm payrolls report gave market players more reason to think the US is already in a recession. A loss of 22,000 jobs in January and 63,000 jobs in February - that’s two straight months of employment declines in the US. The market now thinks the Fed will cut the fed funds rate by 0.75 percentage point from its current 3% when it next meets on March 18. The dollar fell for a fourth straight week against the Euro and to an eight-year low versus the Japanese yen. Need we say the carry trade is long dead?

Broad US dollar weakness could continue this week if we see worse than forecast economic numbers; there is more room for USD to fall against other currencies compared to versus the Euro after ECB president Jean-Claude Trichet said on Friday he supports the US government’s strong-dollar policy. This week, watch out for US trade balance, retail sales, inflation and confidence data.

Monday:

Japan Eco Watchers survey 0500 GMT

Germany trade balance 0700 GMT

UK PPI, industrial production 0930 GMT

Canada housing starts 1215 GMT

US wholesale inventories 1400 GMT

Posted in Categories: Forex, Videos.

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