CHINA, US DATA HEADLINE ACTIVE THURSDAY SESSION
The economic calendar heats up on Thursday with key reports from Asia and the United States. Meanwhile, the European session will provide little in the way of market-moving events, giving investors time to shift their focus to North America.
Action begins at 07:00 GMT with a deluge of Chinese economic reports. The central government in Beijing will report on retail sales, industrial production, fixed asset investment and gross domestic product (GDP). The Chinese economy is projected to grow at an annualized rate of 6.7% in the fourth quarter, down slightly from 6.8% in Q3. Compared to the previous quarter, that amounts to 1.6% growth.
The US government will issue fresh real estate data at 13:30 GMT with a report on housing starts and building permits. Starts are forecast to decline slightly in December to a seasonally adjusted annual rate of 1.275 million units. Permits, which are a bellwether of future construction plans, are expected to fall to 1.29 million.
The Labor Department will also issue its weekly jobless claims report at 13:30 GMT. The number of Americans filing for first time unemployment benefits is expected to fall by 11,000 in the week ended 13 January to reach 250,000.
Meanwhile, the Federal Reserve Bank of Philadelphia will release the January version of its manufacturing survey at the same time as the other reports. The monthly gauge is forecast to decline slightly.
Energy traders will also be keeping an eye on the weekly crude oil inventory report courtesy of the US Energy Information Administration (EIA). Crude stockpiles are forecast to fall by nearly 3.6 million barrels in the week ended 13 January.
In currencies, the US dollar bounced back on Tuesday, rising 0.4% against a basket of world currencies. However, the greenback is down 1.4% since the start of the year, and faces more downside risk now that central banks all over the world are gradually tightening the screws on monetary policy.
Europe’s common currency experienced a volatile Wednesday session, as prices fell 100 pips to breach the 1.2200 handle. The EUR/USD bounced back on Thursday, climbing 0.2% to 1.2190. Immediate resistance is located at around 1.2230, with opposite side support located at 1.2120.
The US dollar briefly declined below 1.2400 CAD on Wednesday after the Bank of Canada (BOC) raised interest rates for the third time since last summer. However, it would quickly rebound as investors took in an overly cautious BOC rate statement. The pair was last seen trading at 1.2451.
The dollar gained ground on the yen Wednesday, with the USD/JPY climbing back above 111.00. The pair was last seen trading at 111.40, where further upside is challenged by weak dollar fundamentals.