INVESTORS EYE ECONOMIC DATA AS HURRICANE IRMA APPROACHES FLORIDA
A steady stream of economic data will keep investors preoccupied on Friday ahead of the expected landfall of Hurricane Irma on Florida’s southern shores this weekend.
The economic calendar will see a deluge of market-moving events from both sides of the Atlantic. Germany will get the ball rolling at 06:00 GMT with its monthly trade report.
A few hours later, the Bank of England (BOE) will release its consumer inflation expectations report. The release will be accompanied by data on industrial production, manufacturing production and trade. The United Kingdom’s industrial production is forecast to expand 0.2% in July. Manufacturing output is forecast to grow 0.3% month-on-month.
In North America, Canada will release its latest employment numbers at 12:30 GMT. The red-hot Canadian economy has added jobs every month this year.
In terms of US data, the Commerce Department will report on wholesale inventories for the month of July. Baker Hughes Inc. will also release its latest rig-count figures.
In terms of monetary policy, Federal Open Market Committee (FOMC) member Patrick Harker will deliver a speech during the morning session.
Earlier in the day, China reported a much smaller than expected August trade surplus, as import growth outpaced exports by swide margin. Beijing’s dollar-denominated trade surplus narrowed to $41.99 billion in August, down from $46.73 billion the previous month.
Hurricane Irma is expected to smash Florida’s southern shores by Sunday. The storm is considered one of the most powerful Atlantic hurricanes ever recorded. The latest satellite images suggest there is a strong probability that Irma will make its way farther inland and may even impact Georgia.
The euro is riding fresh multi-year highs on Friday, as the dollar continues to decline. The EUR/USD exchange rate approached 1.21 during the Asian session before pulling back slightly toward 1.2075. That represents a gain of 1.2075. Meanwhile, the US dollar index is down another half percent against a basket of world peers to trade at its lowest level since January 2015. The common currency’s next major target is 1.21. Based on recent market movement, that level is a distinct possibility.
The Canadian dollar’s enormous rally continued Friday, as the USD/CAD plunged another 0.5% to 1.2072. That’s the lowest level the pair has traded since May 2015. The USD/CAD has declined around 600 pips since the start of September. Prices appear poised to consolidate around the 1.20-1.21 level as the market awaits fresh news on US monetary policy.
The British pound also benefited from the dollar’s slump, as cable extended recent highs. The GBP/USD pushed through 1.31 on Thursday, and was last seen trading near 1.3130. That represents a gain of 0.3%. The pair faces immediate support at 1.3065. The next resistance target is likely seen at 1.3200.