Forex: Monday's review
01.03.2011, 09:26

Forex: Monday's review

On Monday the dollar fell to its lowest since November on bets Federal Reserve Chairman Ben S. Bernanke will signal to Congress the central bank plans to maintain economic stimulus.
The euro rose against the dollar on speculation European Central Bank President Jean-Claude Trichet may indicate this week a readiness to increase borrowing costs. 
U.S. consumer spending rose less than forecast in January, accelerating 0.2%, data from the Commerce Department showed today. Another report showed European inflation stayed above the ECB’s 2% target for a second month in January.
An ECB governing council member, Mario Draghi, said on Feb. 26 that inflation pressures are forcing policy makers to focus more closely on the timing of future interest-rate increases.
The ECB, which has kept its key interest rate at 1% since May 2009, will hold its next policy meeting on March 3.
Bernanke is scheduled to deliver the Fed’s semiannual report on monetary policy tomorrow to the Senate Banking Committee and is due to testify to the House Financial Services Committee the following day. The Fed has kept its benchmark interest rate at zero to 0.25% since December 2008.
Crude oil for April delivery rose as much 2.1% to $99.96 a barrel in New York before trading at $97.88. It rose last week to $103.41, the highest level since September 2008.
Canada’s dollar reached a three-year high versus the greenback after a government report showed the nation’s economy grew at a 3.3% annual pace in the fourth quarter, more than economists forecast.
The currency was headed for a 2.7% rally this month before tomorrow’s meeting of the Bank of Canada, which has expressed concern that its strength may stall growth.

EUR/USD: the pair shown high in the field of $1,3680 then  decreased.
GBP/USD: on results of yesterday's session the pair  become stronger in around $1,6250.
USD/JPY: the pair bargained within the limits of Y81,60-Y82,00

At 1000GMT, the flash measure of EMU HICP is expected to come in at a reading of 2.4% y/y, while at the same time, the unemployment rate is expected to remain steady, at 10%. 
UK data continuess at 0928GMT with the PMI Manufacturing data for February, which is expected to edge lower, but remain at a reading of 61.0. This is followed at 0930GMT by BoE Lending to Individuals and Final M4 Data.
US data starts at 1245GMT with the weekly ICSC-Goldman Store Sales data, which is followed at 1355GMT by the weekly Redbook Average. The main event for Tuesday will likely be at 1500GMT, when Federal Reserve Chairman Ben Bernanke gives his semi-annual monetary policy report to the Senate Banking Committee in Washington. US data also heats up at 1500GMT, when ISM manufacturing data is expected to fall to 60.5 in February, continuing its upward trend. The regional data already released have pointed to continued expansion. At the same time, construction spending is expected to fall 0.8% in January following the residential-related plunge in December. Housing starts rose sharply in the month, suggesting that residential construction rebound in the month.
n other US events for Tuesday, Treasury Secretary Tim Geithner testifies on GSEs to the House Financial Services Committee, while auto-maker data is expected to show that domestic-made light vehicle sales rose slightly to a 9.5 million annual rate in February after rising slightly to 9.4 million in January. Seasonal factors are less accommodative than in January.

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