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The euro strengthened to a one-week high against the dollar after a German report showed inflation accelerated to the fastest pace in more than two years.
The common currency was set for a weekly advance versus all of its 16 major counterparts as European finance ministers may increase the size of aid reserves and lower rates on bailout loans at a meeting next week.
The yen rose for the first time in four days against the euro on speculation Japan’s exporters took advantage of yesterday’s biggest drop in six weeks to buy it.
Europe’s currency headed for a weekly gain versus the greenback after the Federal Statistics Office in Wiesbaden said today the inflation rate, calculated using a harmonized European method, rose to 1.9 percent in December from 1.6 percent in November. That’s the fastest since October 2008.
The yen rose versus 15 of its 16 major counterparts on speculation that Japanese exporters purchased the currency after it touched the weakest level since December.
EUR/USD: the pair bargained in the field of the high reached yesterday.
GBP/USD: the pair bargained in the field of the high reached yesterday.
USD/JPY: the pair decreased in around Y82,50.
European data for Friday starts at 0700GMT with the latest ACEA new car registrations data. This morning also sees the release of final HICP data from the German states, including Germany at 0700GMT.
At 0935GMT, ECB Governing Council member Axel Weber is due to speak at the Otto Beisheim School of Management. EMU data includes the November trade balance at 1000GMT as well as the final December HICP data, which
is expected to confirm the preliminary release of 2.2% y/y.
UK data at 0930GMT includes Producer Prices for December, where PPI output is expected to come in at 0.4% m/m, 4.0% y/y, with core output at 0.3% m/m, 3.0% y/y and input prices 1.5% m/m, 10.2%
US data starts at 1330GMT with retail sales and CPI. Retail sales are expected to rise 0.8% in December. Industry auto sales rose slightly in the month, while gasoline prices rose further according to AAA. Sales
excluding motor vehicles are expected to post a 0.7% increase on the higher gasoline prices as well as solid holiday sales. Consumer prices are expected to rise 0.4% in December, on solid gains in both food and
energy prices. AAA reported another rise in gasoline prices in the middle of December from a month earlier. Core CPI is forecast to rise only 0.1%, as pricing power remains very weak. US data continues at
1415GMT, when industrial production is expected to rise 0.5% in December on rising utilities production and moderately stronger manufacturing production. Factory payrolls 10,000 in the month, while auto production
jobs rose 3,000. The factory workweek fell 0.1 to 40.2 hours, while the ISM production index rose to 60.7. Capacity utilization is forecast to rise to 75.6%.
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