ECB’S DRAGHI HEADLINES SLOW RELEASE SCHEDULE ON FRIDAY
The global financial markets could end the week on a whimper, as a slow stream of economic data keeps investors on the sidelines. Monetary policy will be the main focus, with investors zeroing in on an important speech from a top European Central Bank (ECB) official.
ECB President Mario Draghi is scheduled to deliver a speech at 08:30 GMT. Draghi’s comments will be scrutinized for clues about the pace and timing of future monetary policy changes within the ECB. The central bank has already announced plans to wind down its stimulus program but has also said it will likely extend the duration of bond buying.
On the economic calendar, the European Commission’s statistical agency will report on the current account deficit at 09:00 GMT.
Shifting gears to North America, the US Department of Commerce will report on building permits and housing starts at 13:30 GMT. Permits are forecast to rise 2% to a seasonally adjusted 1.247 million-unit pace in October. Housing starts are expected to gain 5.6% to a 1.185 million-unit pace.
Later in the day, the Kansas City Fed will release its monthly manufacturing activity survey for November. Separately, Baker Hughes Inc. will release its weekly rig count numbers.
North of the border, the Canadian government will report on consumer inflation data at 13:30 GMT. The consumer price index (CPI) is forecast to climb 1.4% annually in October, following a 1.6% year-over-year gain the month before.
In currencies, the US dollar index declined 0.3% on Friday to reach 93.61. That was DXY’s third consecutive drop.
The euro was back in the driver’s seat on Friday, as the dollar lost ground against a basket of world peers. The EUR/USD exchange rate climbed 0.3% to 1.1810, just one day after visiting the 1.1850 region. Looking at the longer-term horizon, the EUR/USD continues to trade in the 1.1479-1.1880 range. An analysis of the short term reveals initial resistance at 1.1850.
Cable took advantage of broad dollar weakness to push higher on Friday. The GBP/USD exchange rate added 0.3% to 1.3235, its highest in two weeks. The pair pushed higher on Thursday following the release of better than expected UK retail sales data. However, Brexit rumours are expected to dictate cable’s long-term investment appeal. Immediate support levels are located at 1.3140, 1.3100 and 1.3060. On the opposite side of the ledger, resistance is likely found at 1.3270, followed by 1.3310.
The greenback also fell against its Canadian counterpart Friday, with the USD/CAD slipping 0.2% to 1.2726. The decline marks the continuation of a sharp down move that pulled the pair below 1.2800. The 1.2800 region provides a good short-term bellwether of the pair’s bullish potential.