Investors won’t get any reprieve from the economic calendar on Wednesday, as governments in Europe and the United States unleash a fresh wave of economic data.
Action begins at 07:00 GMT with a report on German consumer confidence courtesy of the GfK research institute. The monthly reading is expected to dip slightly to 10.9 in March from 11.0 the month before.
Over the next two hours, investors can expect a deluge of economic reports that include French and Portuguese GDP, German unemployment, Italian consumer inflation and Swiss business confidence.
The French economy is expected to grow 0.6% in the fourth quarter. Meanwhile, Germany’s employment report is expected to show a jobless rate of 5.4%, unchanged from the previous month.
At 10:00 GMT, the European Commission’s statistical agency will report on the consumer price index (CPI) for February. The preliminary reading is expected to show annualized inflation at 1.2% for February, down from 1.3% the month before. So-called core consumer prices, which strip away volatile goods such as food and energy, are expected to rise to 1.1% from 1% in January.
Shifting gears to North America, the US Department of Commerce will unveil its second estimate of fourth quarter GDP at 13:30 GMT. The report is expected to show annualized growth of 2.4% in the final three months of 2017. The report will also contain the latest quarterly reading of the core personal consumption expenditure index, which is the Federal Reserve’s preferred measure of inflation.
Later in the session, ISM-Chicago will release the February purchasing managers’ index (PMI), which tracks business conditions in the US Midwest. The National Association of Realtors (NAR) will also release the latest pending home sales index for January.
On the monetary policy front, Federal Reserve Chairman Jerome Powell will testify before the House Financial Services Committee at 15:00 GMT.
EUR/USD
Europe’s common currency nosedived on Tuesday, as the US dollar regained its momentum. The EUR/USD fell from a high of 1.2343 all the way down to 1.2222. It was last seen trading at 1.2217, where it was on track for fresh two-week lows.
GBP/USD
Cable also fell sharply on Tuesday, hitting a session low of 1.3831. After a failed rally attempt, the GBP/USD found itself closing below the 1.3900 threshold. Cable now faces immediate support at 1.3825.
USD/CAD
The USD/CAD was among the better performing crosses on Tuesday, as the pair shot up more than 100 pips to close at 1.2770. The USD/CAD is currently trading at yearly highs and could be poised for further gains now that investors are beginning to speculate about four US interest rate hikes this year. The Federal Reserve is widely expected to raise rates at its forthcoming meeting 20-21 March.
