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.