A new trading week starts today, and though today the economic calendar has only one major announcement of very high importance related to the Eurozone Consumer Price Index, it will be a week with 2 central banks interest rate announcements, and the very important US non-farm payrolls on Friday.
On Friday 28th July 2017, the German Consumer Price Index for the month of July came in at 1.7%, higher than the estimate of 1.5% on a yearly basis, US Gross Domestic Product missed slightly the expectation of 2.7% for the 2nd quarter with a reading of 2.6%, and the Canadian Gross Domestic Product surpassed the expectation of 4.2% on yearly basis for the month of May, with a higher reading of 4.6%.
The US Dollar even with a higher revised GDP and a higher University of Michigan Confidence survey reading could not strengthen against its major counterparts. Can the current depreciation trend for the US Dollar continue or reverse this week? We will find out by this Friday.
Here are the most important economic news for today in the forex market to focus on:
Japanese Housing Starts (June)
Time: 05:00 GMT
The number of housing starts shows the economic activity in the housing sector and construction, and higher readings are positive for the Japanese Yen, indicating growth for the economy. The expectation is for a reading of 0.1%, higher than the previous reading of -0.3%.
German Retail Sales (June)
Time: 06:00 GMT
Retail Sales reflect consumer spending, which can have a positive or negative impact on the economic growth measured by the GDP. Higher readings are positive for the German economy and the Euro, reflecting increased consumer spending. The expectation is for a reading of 2.7% on a yearly basis, lower than the previous reading of 4.8%.
Eurozone Unemployment Rate (June)
Time: 09:00
A lower unemployment rate is positive for the Eurozone, resulting in a higher number of people working and spending, and therefore a higher economic growth. A lower unemployment rate can lead to a rising reading of inflation, boosted by consumer spending and this is positive for the Euro as the ECB could increase its key interest rate to fight inflation in such an event. The expectation is for a reading of 9.2%, lower than the previous reading of 9.3%.
Eurozone Consumer Price Index Estimate and Consumer Price Index – Core (July)
Time: 09:00
Consumer Price Index measures the rate of inflation, and higher than expected or rising readings are positive for the Euro, as they indicate higher inflationary pressures, and increased odds of future interest rate hikes by the ECB. Today the expectations are for readings exactly as the previous ones, for the Consumer Price Index – Core a reading of 1.1%, and for the Consumer Price Index Estimate a reading of 1.3%. Any positive of negative surprises can move the Euro, but if the expectations are met then this is a neutral reading showing stable prices and not any significant inflationary pressures.
US Chicago Purchasing Manager (July)
A monthly economic reading measuring business conditions and expectations, with higher readings being positive for the US Dollar and the US economy. The expectation is for a reading of 60.0, lower than the previous reading of 65.7.
