Previous Day's Market Highlights
Sterling threw off the pressure seen Monday and picked up ahead of testimony from BoE Governor Carney before the Economic Affairs Committee. Sterling-euro held above 1.13 to test 1.14, while sterling-dollar regained 1.41. The weaker dollar and euro strength, in part stemming from strong Q4 and 2017 economic growth figures, pushed euro-dollarback above 1.24.
The dollar had a relatively muted reaction to President Trump’s State of the Union address last night. Trump focused on immigration, infrastructure, and the economy, calling for a more united America.
After a disappointing Q4 CPI print, the Australian dollar weakened. This saw sterling-Aussie jump above 1.75.
|Currency Pairing||08:00 Today||Vs 08:00 Yesterday||Four-Week High||Four-Week Low||% Change|
Today's Market Highlights
Eurozone data are in focus first today (10:00 GMT). Inflation is forecast to have slowed in January, and the Unemployment Rate to have held steady at 8.7% in December. A subdued inflation print could weaken the euro as it would further push back expectations of an ECB rate rise.
The main data releases this afternoon are the US’s ADP Employment Change and Canada’s monthly GDP (13:30 GMT). A pick up in Canada’s economic growth could strengthen the loonie this afternoon.
Investors will primarily be waiting for this evening’s Fed meeting (19:00 GMT), the last under Chair Yellen. The Fed is widely expected to keep interest rates on hold at a target range of 1.25% to 1.5%, which means that investors will be focusing on any changes in the guidance provided.
With no press conference or updated economic forecasts at this meeting, any such shifts would occur in the language of the monetary policy statement. The dollar could strengthen if the Fed strikes a relatively upbeat tone on the economy and takes a hawkish view on rate hikes for the year. Markets are currently pricing in the next hike in March, with odds at around 77% according to the CME FedWatch Tool.
Today's Economic Calendar
|10:00||EUR||Eurozone Unemployment Rate||8.7%||8.7%|
|10:00||EUR||Preliminary Eurozone CPI YoY (Jan)||1.3%||1.4%|
|10:00||EUR||Preliminary Eurozone Core CPI YoY (Jan)||1.0%||1.1%|
|13:15||USD||ADP Employment Change (Jan)||185K||250K|
|13:30||CAD||GDP MoM (Nov)||0.4%||0.0%|
|14:45||usd||Chicago Purchasing Managers' Index (Jan)||64.1||67.8|
|15:00||USD||Pending Home Sales MoM (Dec)||0.4%||0.2%|
|15:00||USD||Pending Home Sales YoY (Dec)||-0.2%||0.6%|
|15:30||USD||EIA Crude Oil Inventories (26 Jan)||-0.100M||-1.071M|
|19:00||USD||Fed Interest Rate Decision||1.5%||1.5%|
|19:00||USD||Fed's Monetary Policy Statement|
|00:30||AUD||Building Permits YoY (Dec)||17.1%|