1. German IFO Business Climate
2. UBS Consumption Indicator
3. US Consumer Confidence
4. FOMC Rate Decision

German IFO - Business Climate (Mar) (8:00 GMT; 03:00 EST)
Consensus:  102.9
Previous:      103.3

Outlook:   The German IFO survey of 7000 executives is expected to report a slight dip in optimism from February's 14 year high 103.3 to 102.9, as businesses feel the effects of this month's rate hike. While companies have been increasing their acquisition of factory equipment, suggesting a steady run in growth, industrial production unexpectedly fell to -0.1%.  Global demand for German goods, which has been a key driver in growth, may have been offset by stingier spending habits at home.  Consumer consumption has begun to show slowing, an effect of increased job cuts and higher borrowing costs, that has in turn cooled inflation to 1.9%, below the European Central Bank's 2.0% ceiling.  The burden on company's borrowing could come under further pressure in the future.  Consumer prices remain high, and the market adopted a firm belief that the probability of rate hikes to 3.0% by the end of the year could be well within the ECB's scope, given the Bank's position on excess liquidity, threats to price stability, and risks of inflation. While this gauge slow slightly for the current month, its influence on the euro should be reserved, as rate speculation remains the overall theme.

Previous:  Last month, German business confidence matched a high last seen in October 1991.  The survey showed a reading of 103.3 from expectation of 101.5 as receding oil prices and a consistently lower exchange rate boosted sales abroad, further lifting business sentiment. Data suggests that a recovery in Europe's largest economy may be gathering momentum, as imports have been following pace.  Subsequently, analysts predict that the country's economy will expand by 1.5% this year, up from last year's 0.9% growth.  The acceleration is anticipated to boost the Euro-Zone's economy by 1.9%, from 1.4% in 2005.  The optimistic outlook and growth projections in the region led the European Central Bank to raise interest rates by 0.25%, bringing borrowing costs to 2.50%, a week after the IFO results.

UBS Consumption Indicator (FEB) (8:00 GMT, 3:00 EST)
Consensus:  0.40 
Previous:      1.46

Consensus: Economists are predicting the consumption index issued by UBS to fall to 0.40 for February.  After hitting a seven-month high in January, a drop of this magnitude will be rather dramatic.  Higher consumer prices in February will be one of the major factors having an effect on consumption over the month.  Switzerland's CPI rose by 0.3% in February in spite of expectations that prices would increase only 0.1%.  The higher than expected rise in the CPI is likely to have an adverse effect on spending considering that in the previous month, consumer prices actually deflated by 0.2%.  Enthused that spending may have begun an uptrend with the end of 2005, Swiss businesses started rapidly increasing their prices.  These price increases may prove to have been too intense over the month, and could possibly put a damper on consumption levels.  Although consumption growth is expected to cool in coming months, it still has potential to fuel overall economic expansion.  As such, the Swiss National Bank is likely to remain steadfast in its recent adoption of a tighter monetary policy. 

Previous: In January, the UBS Consumption Indicator issued a reading of 1.46, suggesting that the Swiss economy's export-led expansion may be coupled by growth on the domestic front as well.  January's strong consumption report figure was the highest since June of 2005 and an improvement over the previous month's already healthy reading of 1.33.  UBS's report makes an attempt to predict the annual rate of growth in private consumption when adjusted for inflation.  With this in mind, it seems that the Swiss National Bank made the right decision to raise interest rates to 1.00% in December in preparation for a period of intense domestic growth.  The case for acceleration in consumer expenditures is bolstered by employment data from the fourth quarter of 2005.  In the three months ending last year, employment levels increased by the most in 3 years.  Furthermore, retail sales posted their largest gains in four years over that same quarter.  With potential for consumption-led expansion finally taking form, many are expecting four more interest rate hikes to come this year. 

U.S. Consumer Confidence (MAR) (15:00 GMT, 10:00 EST)
Consensus:   102.0
Previous:       101.7

Consensus: The Conference Board's measure of consumer confidence in the U.S. is expected to rise to 102.0 in March.  Although an index value of 102.0 would be an improvement from February, the minimal gain reflects consumer's lingering uncertainty about the future.  Given February's marked improvements in employment conditions, one would expect confidence levels in March to be higher.  Over February, 243,000 people were newly employed in comparison to last year's average of 165,000.  Additionally, hourly wages rose 3.5% from the same time a year earlier-the biggest gain since September 2001.  In spite of such positive employment data, however, consumer confidence is expected to improve only minimally as future expectations continue to suffer from political conflict overseas and a downward trend in housing markets.  If confidence levels begin to stall for a sustained period of time, it is likely that the Federal Reserve will have enough evidence to convince them to step away from its current tightening policy.  For the time being, only negligible evidence exists of waning consumer confidence, which means that the Fed will probably stick to its policy for a little while longer. 

Previous: Consumer confidence in the U.S. fell off considerably in February to 101.7 from 106.8.  What is most interesting about this drop in confidence is that it forecasts a potentially slower pace of domestic growth for later in the year as opposed to the quarter in which the fall in confidence actually occurred.  This is because the headline index figure suffered most from poor expectations of the U.S. economy's future-the worst since October of last year.  Sentiment regarding the current state of the economy and labor market, on the other hand, was still rather optimistic, suggesting that first quarter growth will be in line with economist's high expectations.  Much of the loss in consumer optimism likely resulted from a softening in the U.S. housing market. As existing home sales plummet and the number of unsold homes on the market rises, consumers are likely to feel less secure in their real estate investments, and thus, less hopeful about their future economic situations.  Extreme volatility in energy prices since the beginning of the year has also contributed to uncertainty in U.S. households.  A prolonged presence in Iraq and potential for political conflict elsewhere has only added to feelings of economic insecurity among U.S. consumers.

FOMC Interest Rate Decision (19:15 GMT; 14:15 EST)
Consensus:  4.75%
Previous:      4.50%

Consensus:  There is plenty of reason for dollar bulls to cheer as it is increasingly expected that the Federal Reserve will elect to raise rates by 25 basis points for a fifteenth time tomorrow.  Leading the attributions look to be sustained inflationary suggestions and continued productivity as the world's largest economy seemingly expanded in the first quarter of the new year.  Sustainable evidence of growth came from the latest quarterly report that showed gross domestic product expanding at 1.6 percent annualized pace, up from the 1.1 previous calculations. Even more so, inflationary suggestions remain on the upper end as a product of a rebound in manufacturing over the past month.  According to the most recent producer price report release by the U.S. Labor Department, prices paid at the producer level sustained a relatively higher level on the monthly comparison, rising three times consensus figures as manufacturing activity ticked higher in the New York area.  The February rise of 0.3 percent continued the 0.4 percent pace seen in January even as lower energy prices contributed to a 1.4 percent decline in the overall index.  Subsequently, core consumer prices additionally remained higher rising 0.1 percent following a 0.7 percent surge in the month of January.  Even employment and higher consumer confidence looks to assure higher price inflation as we approach the spring and summer months.  In the month of February, suggestions pointed towards a tighter labor market as non farm employment reports added another 243,000 jobs to the economy as worker earnings rose 3.5 percent on an annualized basis.  Ultimately, in order to preemptively remain atop the recently and visibly strong inflationary suggestions, another hike by policy makers looks imminent.  The question remains, however, as to the duration of the current tightening bias.  Should policy makers continue to raise the benchmark rate, consumers may become reluctant, as the economy sports a deficit equating to almost 7 percent of overall output.

Richard Lee is a Currency Strategist at FXCM.