Wednesday will be an active session in the global financial markets, as investors sift through a steady stream of economic data and key remarks from a parade of central bank speakers.
Monetary policy is on the docket early Wednesday as European Central Bank (ECB) President Mario Draghi delivers a speech at 08:10 GMT. A stronger Eurozone recovery through the first nine months of the year suggests the ECB could be willing to begin normalizing monetary policy in the near future.
ECB officials Peter Praet and Benoit Coeure are also scheduled to speak during the North American session.
Europe’s data wire kicks off at 08:30 GMT with British employment numbers. The UK’s claimant count change is forecast to rise by 1,000 for the month of September. The ILO-calculated unemployment rate is projected to hold steady at 4.3% annually in the three months ending August.
Average hourly earnings for UK workers is forecast to rise 2% annually over the same period.
The European Commission’s statistical agency will report on Eurozone construction output at 09:00 GMT.
A pair of Federal Reserve officials will kick off the North American session. Federal Open Market Committee (FOMC) member Robert Kaplan and New York Fed president William Dudley will deliver speeches around 12:00 GMT.
Data from the US Commerce Department will report on housing starts and building permits at 12:30 GMT. North of the border, Canada will also release manufacturing data at the same time.
Traders will also be keeping an eye on the Fed’s Beige Book, which is scheduled for release at 18:00 GMT. The Beige Book provides a snapshot of the current US economic situation.
Finally, energy traders will monitor the weekly crude inventory report at 14:30 GMT.
EUR/USD
The euro succumbed to pressure on Tuesday, falling back below 1.1800 US. While the common currency remains supported over the short-term, there is a risk of a further breakdown toward the 1.1700 region. The EUR/USD is currently feeling the pinch of a rebounding US dollar. The world’s most actively traded currency has gained in each of the past four sessions.
GBP/USD
The British pound also backtracked on Tuesday, as investors continued to back the US dollar. Cable opened around 1.3190, and was little changed at the time of writing. Above 1.32, the GBP/USD is likely to run into resistance near 1.3260. On the flipside, a fall back toward the 1.3160 region would expose the short-term support signal near the 12 October low of 1.3120.
USD/CAD
The USD/CAD reached a high of 1.2573 on Tuesday, which would have marked the best settlement in 11 days. The pair would later surrender most of its gains to settle near 1.2500. The bulls appear to be hesitating now that the USD/CAD is back at 1.2500. This suggests the market will remain neutral for the time being.
