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Dailyfutures.com
Australian dollar, British pound, Canadian dollar, Euro, and the Japanese yen
Australian dollar
Chart Comments
Long-term (not shown): The Australian dollar fell from 95 to 60 cents in the financial panic of 2008, but has now bounced back to roughly 80 cents, helped by the fact that Australia's economy is one of the better performers in the world right now. It may be tough to trade much above 85 cents (updated 6-23-09).
Daily (below): Australia is one of the better-performing economies on this page and it shows in the currency price. On March 19th, the Australian dollar closed above its 125-day average and, on April 13th, closed at its highest level in six months - impressive signs of strength (updated 6-12).
Key Events - Australia
2009
7-1 - Retail sales +1.0% in May, stronger than expected.
6-25 - IMF est.: Real GDP -.5% in 2009 and +1.5% in 2010.
6-24 - OECD est.: Real GDP -.4% in 2009 and +1.2% in 2010.
6-11 - May unemployment rate jumps from 5.5% to 5.7%, the highest in seven years. Job losses total 1,700, not as bad as expected.
6-3 - Q1 real GDP was up .4% from a year ago, better than expected.
5-7 - Australia becomes the first economy among our currencies to show job growth. The unemployment rate in April improved from 5.7% to 5.4% with a net gain of 27,300 jobs.
4-9 - Unemployment rate increased from 5.2% to 5.7% in March, the highest in seven years.
4-7 - Reserve Bank reduced its interest rate from 3.25% to 3.00%, the lowest in 49 years.
3-12 - Unemployment rate increased from 4.8% to 5.2% in February, the highest in almost four years.
3-4 - Q4 real GDP was down .5%, the first negative quarter in eight years.
Fundamental Notes
Australia has been the strongest performing economy of the currencies that we cover and its downturn is probably over already. On May 7th, the Bureau of Statistics reported that the economy had an unexpected increase in the number of jobs and that is signficant. Real GDP was up .4% in the first quarter from a year ago. On June 24, 2009, the OECD predicted that real GDP will be down .4% in 2009 and up 1.2% in 2010. On March 31, 2009, the Reserve Bank of Australia predicted that real GDP will be down slightly in 2009. On October 9, 2008, the World Economic Forum said that Australia's banking system was the fourth soundest in the world.
Australia's government spends 35% of the nation's income, which is low when you consider that they also provide universal healthcare. Overall tax revenues only amount to 31% of the nation's income.
Australia Stats:
Latest real GDP growth: +.4% in the first quarter v. year ago.
Unemployment rate: 5.7% in May (seven-year high) v. 5.5% in April.
Consumer price index: +2.5% in first quarter v. year ago.
Latest interest rate change: Reduced from 3.25% to 3.00% on April 7, 2009 (49 yr low).
GDP: US$800 billion (2008 CIA estimate).
Public debt/GDP: 15% (CIA estimate).
Population: 21.3 million (2009 CIA estimate).
Heritage Foundation Economic Freedom Ranking: 3rd in 2009.
British Pound
Chart Comments
Long-term (not shown): In August of 2008, the British pound broke lower, hit hard by the financial panic. Prices found support at the two-decade low of $1.40 and are now above $1.60 as the economy shows some improvement. Big questions still remain about the future of this economy. A new range could be $1.40 to $1.80? (updated 6-23-09).
Daily (below): The British pound has had some better-than-expected economic news lately and prices are above the 125-day average, but how much farther will it go? In 2010, the U.K. and Europe are expected to have no growth while the U.S. and others return to slow growth - that is not bullish for the pound (updated 6-24).
Key Events - U.K.
2009
6-3- - Q1 GDP -4.9% from a year ago - worst quarter since 1958.
6-24 - OECD est.: Real GDP -4.3% in 2009 and flat in 2010.
6-17 - Feb-Apr unemployment increases from 7.1% to 7.2%, better than expected.
6-10 - Industrial output up .3% in April, better than expected and the first monthly gain since February of 2008.
6-8 - OECD: U.K. economy may have bottomed.
6-3 - Index of services for May shows first expansion in a year.
5-22 - Q1 GDP down 4.1% from a year ago - still the worst quarter in 30 years.
5-21 - S&P lowers its outlook for the economy - U.K. at risk of losing its AAA credit rating.
5-12 - Jan-Mar unemployment hits 7.1%, the highest since 1997.
5-1 - Manufacturing index for April shows contraction, but also the best score in eight months.
4-22 - Dec-Feb unemployment rate up to 6.7%.
3-27 - Q4 real GDP down 1.6%, but up .7% for all of 2008.
3-18 - Nov-Jan unemployment rate hits 6.5%, the highest in 12 years.
3-5 - Bank of England reduced its interest rate from 1.00% to .50%, a record low, as expected.
3-2 - Manufacturing index shows contraction for the tenth consecutive month.
Fundamental Notes
This economy is in its first recession in 17 years with real GDP down 2.4% in the first quarter and down 4.9% from a year ago. The government spends 45% of the GDP which is high, but of course, they also offer more public services like universal healthcare. Altogether, tax revenues amount to 39% of the nation's income. On June 24, 2009, the OECD said that they expect real GDP will be down 4.3% in 2009 and flat in 2010.
U.K. Stats:
Latest real GDP growth: -4.9% in the first quarter v. year ago (worst quarter since 1958).
Unemployment rate: 7.1% in Jan-Mar v. 6.7% in Dec-Feb.
Consumer price index: +2.2% in May v. year ago.
Latest interest rate change: Reduced from 1.00% to .50% on March 5, 2009.
GDP: US$2.23 trillion (2008 CIA estimate).
Public debt/GDP: 47% and rising (2008 CIA estimate).
Population: 61.1 million (2009 CIA estimate).
Heritage Foundation Economic Freedom Ranking: 10th in 2009.
Canadian dollar
Chart Comments
Long-term (not shown): In the second half of 2008, the Canadian dollar sold off in the financial panic, but not as hard as most other currencies. Canada's economy is struggling, but it is said to have the soundest banking system in the world and the IMF thinks it will be one of the better performers in 2010. So far, 80 cents has been good support (updated 6-22-09).
Daily (below): The economy is slowly improving and the currency is slowly improving. On April 9th, the Canadian dollar closed above the 125-day average and, after a brief pull-back, closed back above it on April 23rd - an impressive sign of strength. When prices were above 90 cents, the Bank of Canada was concerned that the loonie was too expensive for the economy's good (updated 6-25).
Key Events - Canada
2009
6-3- - April GDP -3.0% from a year ago.
6-24 - OECD est.: Real GDP -2.6% in 2009 and +.7% in 2010.
6-19 - Retail sales down .8% in April, weaker than expected after three months of positive gains.
6-15 - Manufacturing sales down .1% in April.
6-10 - Exports fall 5.1% in April, results in trade "deficit" (December of 2008 posted first trade deficit in three decades).
6-8 - OECD: Canadian economy may have bottomed.
6-5 - Unemployment rate increased from 8.0% to 8.4%, the highest in 11 years.
6-4 - Bank of Canada warns that rising Canadian dollar threatens the economy.
6-1 - Q1 real GDP down 1.4%, the weakest since 1991, and down 2.1% from a year ago, a little better than expected.
5-18 - Canada's 16th confirmed case of mad cow disease since 2003 in a dairy cow in Alberta.
5-15 - Manufacturing sales down 2.7% in March, the lowest in almost ten years.
5-14 - Existing home sales up 11% in April, the biggest monthly gain in five years.
5-13 - Vehicle sales up 6.3% in March, the biggest increase in over a year.
5-8 - Unemployment rate stays at 8.0% in April, but economy gained 36,000 new jobs, the first increase in six months. Also, housing starts down 20% in April, much weaker than expected.
5-6 - Building permits up 23% in March, much stronger than expected.
5-4 - Herd of pigs in Alberta tested positive for H1N1 virus.
4-30 - Real GDP down .1% in February and down 2.3% from a year ago, better than expected.
4-21 - Bank of Canada reduces rate from .50% to 25%.
4-16 - Manufacturing sales up 2.2% in Feb., the first increase since July of 2008.
4-9 - Unemployment rate increased from 7.7% to 8.0% in March, more jobs lost than expected.
4-8 - Housing starts up 14% in March, much stronger than expected.
4-30 - Feb. real GDP down 2.3% from a year ago, better than expected.
5-2 - 2008 real GDP up .5%.
3-31 - January real GDP down 2.4% from a year ago, the sixth consecutive month of decline.
3-14 - Existing home sales up 8.6% in February, the first gain since September.
3-13 - Unemployment rate increased from 7.2% to 7.7% in February, the highest in over five years.
3-3 - Bank of Canada reduced its interest rate from 1.00% to .50%, as expected.
Fundamental Notes
Canada's economy is slowing improving, affected by the financial crisis in the U.S. Real GDP was down 3.0% in April from a year ago. For all of 2008, real GDP was up just .5% after gaining 2.7% in 2007. On June 24, 2009, the OECD predicted that real GDP will be down 2.6% in 2009 and up .7% in 2010. On April 22, 2009, the International Monetary Fund predicted that real GDP will be down 2.5% in 2009, but up 1.2% in 2010.
The government spends 39% of the nation's income and offers universal healthcare. Tax revenues amount to 33% of the nation's income. Fiscal year 2008-2009 is expected to show another budget surplus for the 12th consecutive year (Hey U.S. - it can be done!), but a deficit is expected in 2009-2010 due to recession. On October 9, 2009, a survey by the World Economic Forum said that Canada had the soundest banking system in the world. According to Credit Suisse, Canadian banks have the second highest ratio of bank deposits to liabilities in the G-7, just behind Japan.
Canada Stats:
Latest real GDP growth: -3.0% in April v. year ago.
Unemployment rate: 8.4% in May (11 yr high).
Consumer price index: +.1% in May v. year ago.
Latest interest rate change: Reduced from .50% to .25% on April 21, 2009.
GDP: US$1.31 trillion (2008 CIA estimate).
Public debt/GDP: 62% (2008 CIA estimate).
Population: 33.5 million (2009 CIA estimate).
Heritage Foundation Economic Freedom Ranking: 7th in 2009.
Euro
Chart Comments
Long-term (not shown): Like most currencies, the euro lost value in the financial panic of 2008, but found support at $1.25. Prices currently appear to be in a range between $1.25 and $1.45? It is hard to be bullish the euro when the outlook for Europe's economy is for no growth in 2010. Also, several European banks are still having serious problems (updated 7-1-09).
Daily (below): The euro is not going down easy, but the high of June 2nd still looks like a top (updated 6-24).
Key Events - EU-27
2009
6-24 - OECD est.: Real GDP -4.8% in 2009 and flat in 2010.
6-12 - Industrial production in the EU-27 was -.9% in April, weaker than expected.
6-8 - OECD: Economies in France and Italy may have bottomed.
6-3 - Update: Q1 real GDP was down 4.5% from a year ago.
6-2 - Unemployment rate increased from 8.4% to 8.6% in April, the highest in three years.
5-15 - Q1 real GDP down 4.4% from a year ago, weaker than expected.
5-7 - ECB reduced its interest rate from 1.25% to 1.00% and will do more quantitative easing.
4-2 - ECB reduced its interest rate from 1.50% to 1.25%, but not 1.00% as some expected.
3-5 - ECB reduced its interest rate from 2.00% to a record low 1.50%, as expected.
Fundamental Notes
The European economy is suffering and things do not look good for 2009. Real GDP in the EU-27 was down 4.5% in the first quarter of 2009 from a year ago. On June 24, 2009, the OECD predicted that real GDP will be down 4.8% in 2009 and flat in 2010. On April 22, 2009, the International Monetary Fund predicted that real GDP will be down 4.2% in 2009 and down .4% in 2010.
The governments of Germany, France, and Italy spend 45%, 53%, and 50% of their nation's incomes, respectively. That is high compared to most democracies due to the level of social programs that they offer. Tax revenues in the same three countries total 41%, 46%, and 43% of GDP and public debt amounts to 63%, 67%, and 104% of GDP.
European Union (27) Stats:
Latest real GDP growth: -4.5% in the first quarter v. year ago.
Unemployment rate: 8.6% in April (3-yr high) v. 8.4% in March.
Consumer price index: +.7% in May v. year ago.
Latest interest rate change: Reduced from 1.25% to 1.00% on May 7, 2009.
Population: 492 million (2009 ECB estimate).
GDP: US$14.82 trillion (2008 CIA estimate).
Heritage Foundation Economic Freedom Rankings: Denmark is 8th; Germany is 25th; France is 64th; Italy is 76th.
Japanese Yen
Chart Comments
Long-term (not shown): The outlook for the yen is confusing. In October of 2008, the yen broke up to its highest prices in 13 years - normally a very bullish sign, but it wasn't due to a strong economy. The economy is struggling after posting its worst year since World War II and it is hard to believe that Japan could tolerate a much higher yen at this time. This will be interesting... (updated 7-1-09).
Daily (below): Japan's economy may be improving as many are trying to say, but so far there is not a lot of hard evidence. Technically, prices are still below the 125-day - a sign of weakness (updated 6-24).
Key Events - Japan
2009
6-30 - Unemployment rate increased from 5.0% to 5.2%, the highest in five years.
6-29 - Industrial output +5.9% in May, the third consecutive increase.
6-26 - Consumer prices down 1.1% in May from a year ago - record annual drop.
6-24 - OECD est.: Real GDP -6.8% in 2009 and +.7% in 2010.
Real GDP revised to -3.3% in fiscal year 2008-2009.
5-29 - Industrial output up 5.2% in April, the biggest monthly gain in 56 years. Retail sales up .6% in April, the first gain in eight months. Unemployment rate increased from 4.8% to 5.0% in April, the highest in five years.
5-22 - Bank of Japan improves its assessment of the economy for the first time in nearly three years.
5-20 - Real GDP down 3.5% in 2008-2009, the worst performance since 1955.
5-1 - Unemployment rate increased from 4.4% to 4.8% in March, the highest in four years.
4-30 - Industrial production up 1.6% in March, better than expected and the first positive gain in six months.
4-9 - Core machinery orders up 1.4% in February, the first gain in five months.
3-31 - Unemployment rate increased from 4.1% to 4.4% in February, the highest in three years.
3-12 - Real GDP down 3.2% in Q4 and down .6% for all of 2008.
3-7 - Exports down 46% in January and less than imports for the first time in 13 years.
Fundamental Notes
Real GDP in Japan was down 3.3% in 2008-2009, the worst fiscal year performance since records began in 1955. That comes after a .7% decline in real GDP for calendar year 2008. On June 24, 2009, the OECD predicted that real GDP will be down 6.8% in 2009 and up .7% in 2010. On April 22, 2009, the International Monetary Fund predicted that real GDP will be down 6.2% in calendar year 2009, but up .5% in 2010. On April 29th, the Bank of Japan said that it expects real GDP to be down 3.1% in 2009-2010, but up 1.2% in 2010-2011. Japan's fiscal year ends on March 31st.
Japan's government spends 36% of the nation's income, fairly low compared to other democracies and that includes universal healthcare. Tax revenues amount to only 27% of GDP, but public debt is a whopping 170% of GDP.
Japan Stats:
Latest real GDP growth: -3.3% in the first quarter v. year ago.
Unemployment rate: 5.2% in May (5 yr. high) v. 5.0% in April.
Consumer price index: -1.1% in May v. year ago.
Latest interest rate change: Reduced from .30% to .10% on December 19, 2008.
GDP: US$4.35 trillion (2008 CIA estimate).
Public debt/GDP: 170% (2008 CIA estimate).
Population: 127.1 million (2009 CIA estimate).
Heritage Foundation Economic Freedom Ranking: 19th in 2009.
Terms and Abbreviations
CBO - Congressional Budget Office.
Euro area or EU-16 - Includes Belgium, Germany, Greece, Spain, France, Ireland, Italy, Luxembourg, the Netherlands, Austria, Portugal, Finland, Slovenia, Cyprus, Malta, and Slovakia.
EU-27 - Includes the EU-16 plus Denmark, U.K., Sweden, (non-Turkish) Czech Republic, Estonia, Latvia, Lithuania, Hungary, Poland, Bulgaria, and Romania.
GDP - Gross Domestic Product.
IMF - International Monetary Fund.
OECD - Organization for Economic Co-operation and Development. The OECD groups 30 member countries sharing a commitment to democratic government and the market economy.
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