American FX Outlook: US Dollar set to correct loses before w/end as housing headlines
|What you need to know before markets open:
- Haruhiko Kuroda won the re-nomination for the second 5-year term at the helm of the Bank of Japan with dovish Masayoshi Amamiya and Masazumi Wakatabe as Deputy Governors.Kuroda’s nomination was widely expected.
- The UK retail sales rose much less than expected in January with the Office for National Statistics pointing to the long-term slowdown in sales that are hammered by high inflation.Read more in my Preview here.
- The US housing market and the Michigan consumer confidence are the macro highlights of Friday.
Friday’s market moving events
- The US building permits are seen rising 3.5% m/m to 1.3 million in January.
- The US housing starts are expected to increase 3.4% m/m to 1.234 million in January.
- Canada’s manufacturing sales are seen decelerating to 0.2% m/m in December.
- Michigan consumer confidence is predicted to ease slightly to 95.5 in February.
Major market movers
- The US Dollar corrected small part of its previous loses on Friday after falling to 3-year low vs EUR and to 15-months low against JPY earlier on Friday.
- The GBP/USD was a leading currency pair to drive US Dollar slightly higher as the UK retail sales missed the estimated in January.
- The US Dollar is likely to continue to correct slightly higher after losing streak of 4 days as investors are seen likely to book profits before the weekend.
Earlier in Asia/Europe
- Chinese Lunar New Year is today with the world entering the era of “the dog” and lower market liquidity in Asia.
- German wholesale prices rose 0.9% m/m while increasing 2.0% y/y in January.
- The UK retail sales rose 0.1% m/m in January while rising 1.6% y/y. Core retail sales excluding motor fuel rose 0.1$ m/m in January while increasing 1.5% y/y.
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