Euro/USD Daily Outlook –February 16

The Euro continued to decline for the fourth consecutive day; currently the Euro/USD is traded slightly down. Greece didn’t receive yet the bailout package from the EU and IMF. Moody’s is looking into downgrading the credit rating of 17 global banks.

Today, Bernanke will give a speech, US housing starts will come out, and the US unemployment claims weekly update will be published.        

Here is a short outlook for the Euro /USD exchange rate including the main news items and events that may affect forex trading for February 16th:

Forex Market February Update:

The Euro to US Dollar fell again by 0.52% on Wednesday to 1.3066; during February, the EUROS/USD fell by 0.1%. The Canadian Dollar slightly depreciated against the USD; the CHF also depreciated against the USD. On the other hand the Australian dollar moderately appreciated against the USD.

The chart below shows the development of the Euro to US Dollar during 2012 (UTD).

Chart Euro to us dollar Exchange Rates  16  FebruaryCorrelations among Exchange Rates –February 16th

The chart herein shows the linear correlation (moving correlation) between the CHF and the Euro/USD (daily percent changes) during recent months (up to February 15th).

Correlations Euro to us dollar and CHF USD  2011-2012 February 16

The chart presents the relation between the two exchange rates has weakened in recent days even though it is still very strong. The current correlation between the two daily percent changes of these currencies is nearly -0.89 for February. This might suggest the influence (if at all) of the Euro/USD on the direction of the USD/CHF is still robust.

Current Forex Indexes February 16th 

Euro to US Dollar is traded at 1.3012 a 0.41% decrease as of 08:10*.

GBP to USD rate is at 1.5679 a 0.09% decrease as of 08:10*.

(* GMT)

Forex and Commodities News for the Day

Department of Labor– U.S. Jobless Claims: initial claims declined by 15,000 to 358,000 claims for the week ending on February 4th; the number of insured unemployment also decreased by 33k to 3.451 million during the week of January 28th; the upcoming weekly update might affect the USD;

U.S. Housing Starts and Building Permits: the U.S Census Bureau will publish the U.S housing starts and building permits report; in the housing started declined by 4.1% and the building permits fell by 0.1%  (for the recent review);

U.S. Producer Price Index: In the last report regarding December this index for finished goods slightly declined by 0.1%;

Bernanke Speech: following the Chairman of the Federal Reserve testimony and the recent FOMC meeting, Bernanke’s upcoming speech might have some influence on the forex and commodities markets. The title of the speech is named “Community Banking“;

Philly Fed Manufacturing Index: In the January survey, the growth rate increased to +7.3 in January 2012. This index might affect the U.S Dollar (see here last report);

Euro to USD Daily Outlook

The new developments from Greece might affect the direction of the Euro at least until the rescue package will be approved by the EU leader. Until then, I speculate the Euro will continue to trade down. Finally, the upcoming reports that will come out today regarding the U.S. might also affect the direction of the EURO/USD if there will be large shifts.

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