EUR Minimum Bid Rate to Drive Forex Market Today

June 4th, 2009 Posted in Daily Forex Overview

Name: Dan Eduard

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The most important economic news event of the day is the EUR Minimum Bid Rate at 11:45 GMT. Traders are advised to take up position in the EUR and its major crosses most prior to and after the release of the Euro-Zone Interest rates.

11:45GMT- EUR Minimum Bid Rate

•Although some analysts speculate that ECB might cut its Interest Rate today, the chances that the ECB reduction will indeed take place are quite small.
•If the ECB cuts its Interest Rates, the immediate reaction for such announcements is usually a massive depreciation of the EUR.
•However, overall impact of the Interest Rate reduction may in fact strengthen the European currency in the longer run.
•Traders should focus their attention on this release, as it is expected to be the highlight of the week for European markets.

12:00 GMT – U.S Unemployment Claims

•This indicator reflects the number of individuals who filed for unemployment insurance for the first time during the past week.
•This release is expected to print better results than the previous one, meaning the USD could continue to show further bullishness during the day.
•On the other hand, if the results turn out to be lower than the forecast, the Dollar may in fact record a fairly bearish session in today’s trading.

Crude Oil

•Crude Oil dropped yesterday by 3.5% to $66.12 per barrel, pulling back after the US government data showed an unexpected increase in Crude Oil Inventories last week.
•Overall, in recent weeks Oil has surged primarily on weakening USD and not on actual demand.