LIGHT RELEASE SCHEDULE ON MARTIN LUTHER KING DAY
The global financial markets are off to a whimper this week, as only a small trickle of economic data makes its way to investors. In the United States, traders will be on pause to observe Martin Luther King Day.
The only data release of note on Monday already happened. The Australian TD Securities inflation report showed a 0.1% increase in consumer prices last month, following a gain of 0.2% in November. This translated into year-over-year growth of 2.3% following a gain of 2.7% the previous month.
The Australian dollar rose following the release to trade at fresh three-and-a-half-month highs against the greenback.
In terms of upcoming data releases, the European Commission’s statistics agency will release the November trade balance, which provides a broad glimpse of the regional economy.
The region’s trade surplus is forecast to rise sharply to €28.2 billion in November from €18.9 billion. Germany, which is Europe’s biggest economy and largest manufacturing base, is largely responsible for regional trade.
Later in the session, investors will also have the opportunity to gauge New Zealand’s consumer-driven economy as the government reports on electronic card retail sales.
At 23:50 GMT, Japan will release the domestic corporate goods price index.
It’s important to note that the New Zealand and Japanese releases will take place on Tuesday local time.
The Australian dollar reached a significant milestone on Monday, as the currency clocked in above 79 US cents for the first time in nearly four months. The improvement has coincided with a broad decline in the US dollar, which ended last week at a three-year low. The US dollar has been unable to muster any gains despite a growing likelihood of higher interest rates over the next 12 months. The AUD/USD exchange rate rose 0.5% to 0.7841, where it was trading near session highs. Investors can expect the pair to make an attempt at 0.8000 level. Along the way, the market could be rangebound.
Europe’s common currency was little changed on Monday, as traders consolidated last week’s massive rally. The EUR/USD exchange rate is currently trading at 1.2200, its highest level since December 2014. The euro is being pushed higher by an improving regional economy and signs of gradual easing by the European Central Bank (ECB). The euro is now testing new frontiers, as the bulls continue to push the market higher. In the meantime, support is expected to hold near 1.2100.
Like other dollar crosses, the British pound is enjoying a broad upsurge thanks to prevailing USD weakness. The GBP/USD exchange rate inched higher on Monday to trade at 1.3736. It is currently trading at its highest level since before Brexit, setting the stage for further gains.