American FX Outlook: US housing and Canada’s inflation take center stage

What you need to know

• The US Dollar is trading lower against Euro, Sterling, and Yen while gains against AUD and NZD after the US House of Representatives approved tax package passing the bill to the Senate on Thursday. Investors worry about fiscal burden from tax cuts weighing on prospects of interest rate increases.
• The EU leaders condition further EU-UK talks by further Brexit concessions and guarantees, putting the UK Prime Minister Theresa May under pressure with doubts whether talks will advance to the future trade relationship in December.

Friday’s market moving events

• US building permits are expected to rise 2.0% m/m to 1.247 million in October.
• The US housing starts are set to rise to 1.185 million in October.
• Canada’s CPI is seen rising 0.1% m/m and 1.4% y/y. The Bank of Canada gauge is set to rise 0.3% m/m and 0.8% y/y.

Major market movers

• The NZ Dollar was a loser of the day falling 1% against EUR and USD on Friday.
• Watch CAD moving after Bank of Canada preferred gauge of inflation is published later on Friday. 

Earlier in Asia/Europe

• ECB's Draghi said the Eurozone economy is not yet at a point where the recovery of inflation can be self-sustained without ECB’s accommodative policy.Draghi said the ECB has had increasing confidence that the recovery is robust and that this momentum will continue going forward. In terms of monetary policy, Draghi confirmed that the rate hike will come into play “in horizon well past after asset purchases”. 
• The Eurozone current account surplus rose further expanding to EUR 37.8 billion in September.
• The Bundesbank president and the ECB Governing Council member Jens Weidmann said that the economic recovery has progressed further than inflation figures currently suggest and the easy monetary policy needed but clear end date on quantitative easing would have been justified. 
• “If we have to wait for the new year, if we have to wait for further concessions, so be it,” Irish Prime Minister Leo Varadkar said before an EU summit in Gothenburg, Sweden.