The euro seems to be locked into a bullish trend as investor confidence in the global economic recovery seems to be on the rise. How long this trend lasts will largely be determined by economic indicators from around the world.
Here is a roundup of the days main events:
8:30 GMT GBP – PPI Input
While being more volatile than the CPI, producer prices have also exceeded expectations, showing that inflation is on the rise in the U.K. Following last month’s drop of 0.6% in PPI Input (the main figure), a rise is expected now. Also PPI Output is expected to rise and boost the Pound.
Assuming that the PPI Input comes in at its forecasted level of 0.1%, traders can assume that the GBP will make some gains against its main currency rivals throughout today’s trading. At the same time, if a negative figure is released, investors may turn to safe-haven assets, thereby boosting the USD.
12:15 GMT CAD – Housing Starts
The Housing Starts Report is an annualized number of new residential buildings that began construction during the previous month. This figure might be disregarded if there’s a big surprise in the employment data. After topping 200K, the number of starts slowed down and dropped to 189K last month, causing some worries. We’ll now see if this was a one time drop or a change of trend for USD/CAD.
Should the Housing Starts figure come in at the forecasted 193K, traders can assume the CAD will move up against the greenback in afternoon trading. That being said, an unexpected drop could help the USD after a fairly bearish week.
