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DISCUSSION POINTS – EURO, IPC, AMERICAN DOLLAR, YEN, PAY, ISM
- The euro could fall as progressive CPI data cool bets on the ECB rate hike for 2019
- Dollar and yen could rise as good US statistics reduce risk appetite
- Australian dollar down on Chinese PMI, CAD down with crude oil
CPI of the euro area the data represent the economic calendar in European trading hours. The overall year-over-year inflation gauge is expected to fall to 1.4% in January, its lowest level since April 2018. A weak result could cool the ECB's rate hike outlook for 2019, weighing on the prospects. euro.
Later in the day, the spotlight turns to Data on employment in the United States and ISM manufacturing survey. The first should see the growth of the payroll slow downwhile the activity of the factory sector picked up steam in January. The flow of information in the United States has improved significantly compared to the baseline forecast recently, opening the door to surprises on the rise.
Optimal results could offer a lifeline to the besieged US Dollars. The currency hit the lowest level in almost three months this week after a dovish FOMC policycall. Officials shrank from the promise of gradual rate hikes and even hinted that the pace of liquidation of balance sheets could be slowed.
The data may also have important implications for more general trends in risk appetite. Markets praised the Fed's timid position despite its truly troubling origins of change, from slowing global growth to political instability in much of the G10 and beyond.
Bearing this in mind, it is possible that the evidence of a healthier US economy than that envisioned by investors elicits a somewhat counter-intuitive response. If it is deemed likely to dispel the Fed's concerns, it could result in a risk-free response that will raise Japanese yen alongside the bank note.
ALSO DOLLAR TO CHINA ON CHINESE PMI WITH RAW OIL
the Australian dollar underperforming in Asia-Pacific trade. The currency fell alongside local bond yields after disappointing Chinese PMI data it is concerned about the negative impact on growth, inflation and the RBA's monetary policy of a slowdown in Australia's main export market.
the Canadian dollar decreased in line with the decline in crude oil prices. The currency sometimes fails to take the example of one of the main export products of its home country, believing that large price fluctuations can have wider implications for economic performance and, hence, monetary policy. the BOC.
See our market forecasts learn what will drive currencies, commodities and equities in the first quarter!
ASIA-PACIFIC TRADING SESSION
EUROPEAN COMMERCIAL SESSION
** Every time listed in GMT. To see the complete economic calendar here.
FX TRADING RESOURCES
— Written by Ilya Spivak, Currency Strategist for DailyFX.com
To contact Ilya, use the comments section below or @IlyaSpivak on Twitter
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