ECONOMIC DATA BACK IN THE SPOTLIGHT ON FRIDAY
An upsurge of economic data will make headlines on Friday, as US traders return from Thanksgiving. However, market participants can expect a fairly quiet trading session following the US holiday.
Action begins at 08:15 GMT with a Swiss government report on industrial production. The third quarter results will be released on a quarterly and year-over-year basis.
At 09:00 GMT, the CESifo Group will release its latest business survey for Germany. The business climate indicator is expected to nudge down to 116.5 from 116.7 for the month of November. The current assessment index is forecast to tick up to 125.0. Meanwhile, the indicator covering expectations is forecast to dip to 108.9 from 109.1 the previous month.
Over the next hour, reports on Italian industrial orders and British mortgage approvals will make their way through the financial markets.
Shifting gears to North America, IHS Markit will release the latest PMI indicators covering the US economy. The preliminary manufacturing purchasing managers’ index (PMI) is forecast to show slight growth in November, reaching 54.8. The services index is forecast to climb to 55.5 from 55.3 the previous month.
In terms of monetary policy, European Central Bank (ECB) officials Vitor Constancio and Benoit Coeure will deliver speeches throughout the day. The ECB has begun the long process of policy normalization, but is leaving plenty of leg room to extend quantitative easing for longer than previously expected. Therefore, currency traders are assessing remarks from the ECB very critically.
The common currency has gained ground on the dollar in recent sessions. The US dollar index, which tracks the greenback against a basket of six peers, is currently trading at its lowest level since mid-October. The greenback is in the midst of a sharp two-week downtrend, with investors doubting the Federal Reserve’s plan to normalize monetary policy.
The euro has received a large boost over the past two days, and now finds itself trading at more than one-month highs versus the greenback. The EUR/USD exchange rate was last seen trading at 1.1852 with strong upward bias. The pair continues to trade above the key 1.1790 level. Prices will remain in an uptrend so long as this critical zone is maintained.
Cable printed fresh highs earlier this week as the dollar lost ground on global counterparts. The GBP/USD had lost some of its momentum on Friday, declining 0.1% to 1.3290. The pair faces immediate resistance at Wednesday’s daily high of 1.3312. Support is located around 1.3213.
The dollar gained some ground on the Japanese yen Friday, but remained in a firm downtrend. USD/JPY was last seen trading at 111.45. The pair continues to see renewed buying interest around 111.20, which should keep the bears at bay.