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Weekly Market View

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Unwinding Carry Trades Roil the Markets

Fri, Sep 5 2008, 12:04 GMT
by Tatsuya Kawanishi

FXstreet.com

Unstable global economic environment has brought “unwinding carry trades. We have seen the free fall JPY crosses, especially the GBP/JPY that hit a remarkable low at 186.07. looking back the week on September 8th, both the Bank of England and the European Central Bank decided to hold the rates unchanged at 5.00% and 4.25% respectively. The ECB president Trichect's comments seemed as dovish side that has pushed the EUR/USD down further. On the other hand, as the BoE decided to hold the ongoing rates, no policy statement was released. We will have to wait the release of the MPC minutes on September 17th. Okay! we keep on paying close attention to the markets during the week (Sept 7th to Sept 12th ) where there are many significants events are scheduled. Alright! Let's review them all.

On Sunday (Sept 7th) we have the following events to watch:

• In Australia, the RBA governor Stevens will have a press conference at 23:00 GMT.

On Monday (Sept 8th) we have the following events to watch:

• In Switzerland, Unemployment Rate is released at 05:45 GMT.
• In the U.K. PPIs (both input and output), RBC Retail Sales, and NIESR GDP Estimate are notable events to monitor.
• In Canada, Building Permits is scheduled at 12:30 GMT.
• In the U.S. Consumer Credit (Previous 14.3 B) should be taken into account.

On Tuesday (Sept 9th ) we have the following events to watch:

• In Australia, Retail Sales (Previous -1.0%) and NAB Business Confidence (Previous -9) are important events to watch.
• In Germany, Trade Balance is released at 06:00 GMT.
• In the U.S. Pending Home Sales is a remarkable event to monitor.
• In New Zealand, Overseas Trade Index (Previous 4.1%) is scheduled at 22:45 GMT.
• In Japan, Current Account is an event to monitor.

On Wednesday (Sept 10th) we have the following events to watch:

• In Australia,WMI Consumer Sentiment (Previous 9.1% ) is an event to monitor.
• In Japan, Leading Indicator is released at 05:00 GMT.
• In the UK, Trade Balance (Previous -7.5B) and Leading Index are remarkable events to watch.
• In New Zealand, the RBNZ Interest Rate Announcement (Current 8.00 %) is scheduled at 21:00 GMT. Be aware NZD/USD traders.

On Thursday (Sept 11th ) we have the following events to watch:

• In New Zealand, Business NZ manufacturing Index is released at 00:00 GMT.
• In Australia, Unemployment Rate is an event to follow.
• In the Euro zone, ECB Bulletin is released at 08:00 GMT.
• In the U.K. BoE inflation Attitudes is scheduled at 08:30 GMT.
• In the U.S. Trade Balance and Import Price are remarkable events to watch.
• In New Zealand, Retail Sales and Core Retail Sales are important events to follow.
• In Japan, Gross Domestic Product is released at 23.50 GMT.

On Friday (Sept 12th) we have the biggest day of the week with the following events:

• In Japan, Industrial Production is released at 04:30 GMT.
• In the Euro zone, Industrial Production and Employment Change are to be taken into account.
• In Canada, Capacity Utilization (Previous 79.8%) is an event to monitor.
• In the U.S. Retail Sales, Core Retail Sales and Michigan Consumer Sentiment are important events to monitor. These events are expected to generate a good deal of volatility for the USD against the other majors.

Published on  Fri, Sep 5 2008, 12:08 GMT