The euro is almost unchanged on Friday, following losses in the Thursday session. Currently, EUR/USD is trading at 1.1140. In economic news, Friday promises to be busy, in sharp contrast to what has been an uneventful week. German Preliminary GDP gained 0.4%, edging above the estimate of 0.3%. German inflation numbers were also within expectations. The US will release a host of key indicators, including PPI, Retail Sales and UoM Consumer Sentiment. Traders should be prepared for possible volatility from EUR/USD after these releases.
Germany’s economy expanded 0.4% in the second quarter, within expectations. However, this figure was considerably weaker than the 0.7% gain in the first quarter. As the largest economy in the Eurozone, German numbers are often a bellwether for the Eurozone. With the after-effects of the Brexit vote just beginning to be measured, third quarter numbers, including GDP, could drop considerably. On the inflation front, deflation remains a major concern. German CPI and WPI posted small gains of 0.3% and 0.2% respectively, as Eurozone inflation numbers are nowhere near the ECB target of about 2%. France, the number two economy in the Eurozone, saw Final CPI decline 0.4% in July, marking the first decline since January. Last week’s dramatic moves by the BoE, which lowered rates and expanded asset purchases, has put further pressure on the ECB to follow suit with further easing.
The US will release a host of key indicators to wrap up the week. Retail sales and PPI numbers in June were respectable, but the markets are expecting softer numbers in the July reports. UoM Consumer Sentiment is expected to rebound and move back above the 90-level, with an estimate of 91.5 points. Federal Reserve policymakers will be keeping a close eye on Friday’s numbers, as the Fed must decide in September whether to raise interest rates. A soft GDP report last month had dampened expectations about a rate hike before 2017, but sharp employment numbers, led by a stellar NFP report have raised the odds of a September hike. The Fed has made no secret that its next rate decision will be data-dependent, so if Friday’s numbers beat the estimates, speculation will increase regarding a September hike. Conversely, weak numbers will likely mean that the markets will have to wait until December for a move by the Fed.
Friday (August 12)
- 6:00 German Preliminary GDP. Estimate 0.3%. Actual 0.4%
- 6:00 German Final CPI. Estimate 0.3%. Actual 0.3%
- 6:00 German WPI. Estimate 0.3%. Actual 0.2%
- 6:45 French Preliminary Non-Farm Payrolls. Estimate 0.2%
- 8:00 Italian Preliminary GDP. Estimate 0.2%
- 9:00 Eurozone Flash GDP. Estimate 0.3%
- 9:00 Eurozone Industrial Production. Estimate 0.6%
- 12:30 US Core Retail Sales. Estimate 0.2%
- 12:30 US PPI. Estimate 0.1%
- 12:30 US Retail Sales. Estimate 0.4%
- 12:30 US Core PPI. Estimate 0.2%
- 14:00 US Preliminary UoM Consumer Sentiment. Estimate 91.5
- 14:00 US Business Inventories. Estimate 0.1%
- 14:00 US Preliminary UoM Inflation Expectations
* Key releases are in bold
*All release times are GMT
EUR/USD for Friday, August 12, 2016
EUR/USD August 12 at 7:30 GMT
Open: 1.1138 High: 1.1156 Low: 1.1131 Close: 1.1149
- EUR/USD has been flat in the Asian and European sessions
- 1.1054 is providing support
- 1.1150 remains fluid. It is providing weak resistance and could see further action during the Friday session
Further levels in both directions:
- Below: 1.1054, 1.0925 and 1.0821
- Above: 1.1150, 1.1278, 1.1376 and 1.1467
- Current range: 1.1054 to 1.1150
OANDA’s Open Positions Ratio
EUR/USD ratio is showing movement towards long positions. Currently, short positions have a strong majority (57%), indicative of trader bias towards EUR/USD breaking out and moving to lower levels.