American FX Outlook: US Dollar set to correct loses before w/end as housing headlines

Mario Blascak, PhD Independent Analyst

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.

Author

Mario Blascak, PhD

Independent Analyst

Dr. Mário Bla&scaron;čák worked in professional finance and banking for 15 years before moving to journalism. While working for Austrian and German banks, he specialized in covering markets and macroeconomics.

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