DOLLAR SEARCHES FOR DIRECTION US GDP TAKES CENTRE STAGE

The economic calendar is back in focus on Friday, with a closely-watched report on the US economy taking centre stage.

At 12:30 GMT, the Commerce Department will release its preliminary estimate of second quarter gross domestic product (GDP), the broadest measure of economic growth. The world’s largest economy is forecast to grow 2.6% annually in the second quarter, according to a median estimate of economists polled by Bloomberg.

The consensus range is 2.2% to 3.2%, with some analysts expecting the reading to come in at the higher end following Thursday’s upbeat durable goods report. Orders for manufactured goods meant to last three years or more surged 6.5% in June, official data showed.

The US dollar will be highly sensitive to the GDP report as it was on Thursday to the durable goods data. A stronger than expected reading will shore up confidence in the US economy, which could trigger a rebound in the dollar.

North of the border, Canada will also issue monthly GDP data for May at 12:30 GMT.

Investors can also expect a deluge of European data on Friday, beginning at 05:30 GMT with preliminary French GDP. The Eurozone’s second-largest economy is forecast to expand 0.5% in the second quarter, following a similar increase in Q1.

Spain will also release Q2 GDP numbers at 07:00 GMT. The headline reading is expected to show 0.9% growth.

The European Commission’s statistical agency will release several sentiment indicators on Friday, including services sentiment, consumer confidence, business climate, industrial confidence and economic sentiment. All releases will take place at 09:00 GMT.

Meanwhile, Germany will issue its preliminary July consumer price index (CPI) at 12:00 GMT. The report is expected to show annual price growth of 1.4% in July.

Oil traders will be keeping a close eye on the weekly Baker Hughes oil-rig count, which is scheduled for release at 17:00 GMT. Oil prices are in a bullish uptrend at the moment, with US crude futures trading around $49.00 a barrel.

USD/CAD

The USD/CAD leapt from multiyear lows on Thursday, as the loonie ran into resistance following a dramatic month-long rally. The pair is currently in wait-and-see mode, as investors turn their attention to economic data later today. The pair has been highly sensitive to fundamental news events, which places more emphasis on the upcoming GDP numbers.

EUR/USD

The euro climbed to fresh two-year highs on Thursday, with the EUR/USD printing 1.1776 in Asian trade. At last check, the pair was down roughly 100 pips from yesterday’s peak. Immediate support is located at 1.1665, although the pair’s next move will be heavily dependent on the upcoming data releases.  

WTI Oil

US crude futures have gained 7% this week, and are fast approaching $50 a barrel. The extent of the weekly rally suggests prices could test year-to-date highs in relatively short order. WTI futures maxed out near $51.50 in late May.