Dollar stays steadily in range in early US session after mixed economic data. Q4 GDP showed only 2.6% qoq growth, missing expectation of 3.0% qoq. Though, GDP price index rose 2.4%, above expectation of 1.3%. Headline durable goods orders rose 2.9% in December, well above expectation of 0.9%. Ex-transport orders rose 0.6%, inline with consensus. Trade deficit widened to USD -71.6b in December. Wholesale inventories rose 0.2% mom in December.
Selloff in the greenback accelerated earlier this week after Treasury Secretary Steven Mnuchin said a weak Dollar is good for trade and opportunities. That was taken by the markets as an endorsement of a weak dollar policy. But the greenback gained some footing after President Donald Trump said he wants to see a strong Dollar. For the moment, there is no sign of reversal yet. Today’s recovery could just be consolidations after selling momentum got exhausted.
Also released in US session. Canada CPI slowed to 1.9% yoy in December, in line with expectation. CPI core-trimmed rose to 1.9% yoy. CPI core-common rose to 1.6% yoy. CPI core median was unchanged at 1.9% yoy. USD/CAD is range bound after the release.
UK GDP rose 0.5% qoq in Q4, accelerated from prior quarter’s 0.4% qoq and beat expectation of 0.4% qoq. Index of services rose 0.4% 3mo3m in November. Sterling is the second strongest currency for the week, just next to Swiss Franc. And it also looks like Sterling’s rally is getting exhausted for now. Also fro Europe, Eurozone M3 rose 4.6% mom yoy in December.
Released earlier today, Japan national CPI core was unchanged at 0.9% yoy in December. Tokyo CPI core slowed to 0.7% yoy in January. Corporate services price rose 0.8% yoy in December.
GBP/USD Mid-Day Outlook
Daily Pivots: (S1) 1.4031; (P) 1.4188; (R1) 1.4294; More…..
Intraday bias in GBP/USD remains neutral for consolidation below 1.4345 temporary top. More sideway trading could be seen with risk of another fall. But downside of retreat should be contained above 1.3651 resistance turned support and bring another rise. Above 1.4345 will extend medium term rally to 100% projection of 1.2108 to 1.3651 from 1.3038 at 1.4581 next.
In the bigger picture, sustained break of 1.3835 key resistance level indicates that rebound from 1.1946 is at least correcting the long term down from from 2007 high at 2.1161. Further rise should now be seen back to 38.2% retracement of 2.1161 (2007 high) to 1.1946 (2016 low) at 1.5466. Medium term outlook will stay bullish as long as 1.3038 support holds, in case of pull back.
Economic Indicators Update
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
|---|---|---|---|---|---|---|
| 23:30 | JPY | National CPI Core Y/Y Dec | 0.90% | 0.90% | 0.90% | |
| 23:30 | JPY | Tokyo CPI Core Y/Y Jan | 0.70% | 0.80% | 0.80% | |
| 23:50 | JPY | Corporate Service Price Y/Y Dec | 0.80% | 0.80% | 0.80% | |
| 23:50 | JPY | BOJ Minutes | ||||
| 09:00 | EUR | Eurozone M3 Money Supply Y/Y Dec | 4.60% | 4.90% | 4.90% | |
| 09:30 | GBP | Index of Services 3M/3M Nov | 0.40% | 0.40% | 0.30% | |
| 09:30 | GBP | GDP Q/Q Q4 A | 0.50% | 0.40% | 0.40% | |
| 13:30 | CAD | CPI M/M Dec | -0.40% | -0.30% | 0.30% | |
| 13:30 | CAD | CPI Y/Y Dec | 1.90% | 1.90% | 2.10% | |
| 13:30 | CAD | CPI Core – Trimmed Y/Y Dec | 1.90% | 1.80% | ||
| 13:30 | CAD | CPI Core – Common Y/Y Dec | 1.60% | 1.50% | ||
| 13:30 | CAD | CPI Core – Median Y/Y Dec | 1.90% | 1.90% | ||
| 13:30 | USD | GDP Annualized Q/Q Q4 A | 2.60% | 3.00% | 3.20% | |
| 13:30 | USD | GDP Price Index Q4 A | 2.40% | 2.30% | 2.10% | |
| 13:30 | USD | Durable Goods Orders Dec P | 2.90% | 0.90% | 1.30% | |
| 13:30 | USD | Durables Ex Transportation Dec P | 0.60% | 0.60% | -0.10% | |
| 13:30 | USD | Advance Goods Trade Balance Dec | -71.6B | -68.6B | -70.0B | |
| 13:30 | USD | Wholesale Inventories M/M Dec P | 0.20% | 0.30% | 0.80% |
