Today in the economy

[killersheep]

3/2/09

Canada - GDP

Actual-1.00%|Forecast-0.70%|Previous-0.70%

Gross Domestic Product (GDP) determines the total worth of all goods and services produced by the economy. GDP is the broadest measure of activity and the primary gauge of the economy's health. To foreign investors, a strong economy is viewed favorably as it spurs investment opportunities in the domestic stock and bond markets. More importantly, the central bank is more likely to raise interest rates in the face of a strong and growing economy. The combination of these effects can have a large impact on the demand for the country's currency. An upward trend has a positive effect on the country's currency.

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USA - ISM Manufacturing Index

Actual35.80|Forecast34.00|Previous35.60|


The Institute of Supply Management (ISM) Manufacturing Index determines the activity level of purchasing managers in the manufacturing sector, with a reading above 50 indicating expansion. To produce the index, purchasing managers are surveyed on a amount of subjects including employment, production, new orders, supplier deliveries, and inventories. Traders watch these surveys closely as purchasing managers, by virtue of their jobs, have early access to data about their company’s performance, which can be a leading indicator of overall economic performance. A rising trend has a positive effect on the nation's currency.

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Australia - Retail Sales

Actual0.20%|Forecast-0.50%|Previous3.80%|

Determines the worth of sales at the retail level. Traders pay close attention to Retail Sales as it is usually the first significant indicator of the month that relates to consumer behavior and is susceptible to surprises. A rising trend has a positive effect on the nation's currency as Retail Sales make up a large portion of consumption, which is a key driver of the economy and has a sizable impact on GDP.

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Australia - Interest Rate Statement

Actual3.25%|Forecast3.00%|Previous3.25%

Each month, excluding January, the Reserve Bank of Australia (RBA) Board meets to set the nation's short term interest rate (i.e., "cash rate"). The Board announces the decided rate shortly after the meeting, and when there is a change in rates they also releases a statement that contains the economic conditions that effected their decision. The primary objective of the central bank is to achieve price stability; when inflation rises above an annualized rate of approximately 3%, they will respond by raising interest rates in an attempt to bring prices down. A rising trend in interest rates has a positive effect on the nation's currency. Short term rates are the paramount factor in currency valuation; traders look at most other indicators merely to predict how interest rates may change in the future. High interest rates attract foreigners looking for the best "risk-free" return on their money, which can dramatically increases demand for the nation's currency. The decision on where to set interest rates depends mostly on inflation.