GLOBAL DATA FLOWS ON FRIDAY
A steady stream of economic data will dominate the headlines on Friday, with the United Kingdom and the United States set to produce high-profile releases.
Action begins at 06:45 GMT with a pair of French reports on industrial output and nonfarm payrolls. France’s industrial production likely rose 0.5% for June. Nonfarm payrolls are projected to climb 0.3% in the second quarter.
The Italian government will report on the national goods trade balance at 08:00 GMT. Rome’s trade surplus is projected to narrow slightly.
At 08:30 GMT, the UK’s Office for National Statistics will report on second-quarter GDP, trade, manufacturing production and industrial production. Gross domestic product – the value of all goods and services produced in the economy – is forecast to rise 0.4% in Q2 and 1.3% annually.
London’s total trade deficit with the rest of the world likely narrowed to £2.5 billion in June from £2.79 billion. Meanwhile, industrial production is forecast to rise 0.4% in June. Manufacturing output is also pegged at 1% growth.
Shifting gears to the United States, the Department of Labor will produce the monthly consumer price index (CPI) at 12:30 GMT. CPI is forecast to rise 0.2% in July and 3% annually. Excluding food and energy, so-called core inflation is expected to gain 2.3% year over year.
North of the border, the Canadian government will produce monthly employment numbers at 12:30 GMT. Canada’s economy likely added 17,000 jobs for July compared with a net gain of 31,800 in June. The jobless rate is forecast to edge down to 5.9% from 6%.
The North American pair has experienced tepid trading conditions over the past two days, as prices continue to claw back from Wednesday’s sharp decline. The USD/CAD exchange rate is currently trading at 1.3048, with the bulls eyeing a return to the 1.3100 level, which is consistent with the high from Wednesday. Volatility in the commodity markets could make this pair an attractive bet for those expecting further depreciation in the loonie.
Cable was unable to break free from the downtrend on Thursday, as prices continued to hover near yearly lows. At the time of writing, the GBP/USD exchange rate was trading at 1.2832, where it was little changed compared with yesterday. Although cable is oversold, the fundamental picture shows a further decline is possible. The trend remains bearish, with the next support level located at 1.2774, the low from 24 August 2017.
Europe’s common currency swung lower on Thursday, reaching its lowest level since 30 May. The EUR/USD exchange rate now sits at 1.1531, where it is testing immediate support. On the opposite side of the spectrum, the pair is likely to face immediate resistance at 1.1580, followed by 1.1600.