News from Europe: The poor industrial production numbers from France and Italy yesterday are beginning to fan flames of pessimism already. According to the president of Italian research group ISAE it could even mean that Italy’s Q1 GDP could be negative. “This year, a slowing of investments is likely” he said adding that Italy may find it difficult to achieve a growth of 1% over the year. Early days but comments like that will add fuel to the fire being fanned already. The risk is however that these views may well be correct.
The following economic releases are due today:
January
U.K. CPI (MoM) - 0.6%
U.K. CPI (YoY) +2.3%
U.K. CPI Core (YoY) +1.5%
U.K. RPI (MoM) - 0.5%
U.K. RPI (YoY) +4.1%
U.K. RPI Excl Mortgage Pay (YoY) +3.3% February
German ZEW Survey: Econ Sentiment - 45.0
German ZEW Survey: Current Situation 50.0
Euro-zone ZEW Survey: Econ Sentiment - 43.0
U.S. ABC Consumer Sentiment (10th)
The States has a relatively quiet week as far as economic releases are concerned. Not that the Dollar need necessarily reflect that with sufficient chance of comment to cause a stir within market players.
Indeed, recently it hasn’t really been events in the States that have governed the course of the Dollar. More it has been a growing disquiet over the European economy. Yesterday’s French and Italian industrial production numbers are just the latest in the growing evidence of a possible sharper fall than expected scenario in Europe’s mainland. Today’s German and Euro-zone ZEW survey will be another crucial point for the market. Thursday’s Q4 GDP from Germany, France and the Euro-zone will be the other numbers that could shape the next move for the Dollar. More and more the interest differential argument is being touted less and less. Indeed, it is just about ignored. We are also finally beginning to see calls from other commentators that we could see a recovery in the Dollar. The anticipation of a H2 recovery in the States following the implementation of the fiscal stimulus while the market perceives the continued tight ECB rate policy may well be a driving factor over the coming months.
Note important support and resistance areas:
USDJPY EURUSD USDCHF GBPUSD
Res: 108.57-96 1.4677-95 1.1135-76 1.9622-72
Res: 107.46-88 1.4545-75 1.1046-65 1.9558-84 Spt: 106.65-70 1.4480-95 1.0969-90 1.9482-00
Spt: 105.88-03 1.4364-00 1.0871-15 1.9400-38 | 
