HIGH PROFILE US DATA HEADLINES FRIDAY SESSION
A steady stream of economic data will make the rounds on Friday, rounding out a highly active week in the markets that saw the US dollar plunge to three-year lows.
Action on Friday begins at 07:45 GMT with reports on French consumer confidence and the business climate. Both indicators will be used to gauge the strength of the Eurozone’s second-largest economy.
The market will quickly shift its focus to the United Kingdom, whose government will unveil revised fourth quarter GDP figures. The revised estimate is forecast to show 0.4% quarter-on-quarter growth. That translates into year-over-year growth of 1.4%.
In the United States, the Department of Commerce will release the final estimate of fourth quarter GDP at 13:30 GMT. The world’s largest economy is projected to grow 3% annually in the fourth quarter.
In a separate release Friday, Commerce will report on durable goods orders for the month of December. Orders for manufactured goods meant to last three years or more are expected to climb 0.8% after rising 1.3% the month before.
Government economists will also report on the goods trade balance for December. The monthly report is expected to show a narrowing of the trade deficit to $68.6 billion from $70 billion in November.
North of the border, the Canadian government will report on the December consumer price index, a key measure of inflation.
In monetary policy, European Central Bank (ECB) governor Benoit Coeure will deliver a speech at 10:00 GMT. Three hours later, the Federal Reserve’s James Bullard will also deliver a speech.
In currencies, the US dollar index continued its long descent in Friday’s Asian session, where it fell to more than three-year lows. The dollar index (DXY) touched a session low of 89.12 before recovering near 89.20. The world’s most actively traded currency is down more than 3% since the new year. More declines are expected as the Trump administration wrestles Canada and Mexico for a new trade agreement to replace NAFTA.
The euro extended its winning streak on Friday, climbing 0.4% to 1.2427 US. The common currency is enjoying strong upside thanks to a weak US dollar and favorable economic developments throughout the euro area.
Cable resumed its uptrend on Friday, climbing 0.5% to 1.4185. The GBP/USD continues to break multi-year highs, although the bulk of the gains have been driven by renewed dollar weakness. This trend is expected to continue for the foreseeable future.
The dollar also lost ground against the Japanese yen, with the USD/JPY falling 0.2% to 109.39. The pair briefly traded below 109.00 on Thursday before staging a late recovery. However, the outlook remains firmly tilted to the downside as the two currencies continue to diverge.