A steady stream of economic data will make its way through the financial markets on Wednesday, giving investors the latest glimpse of the Eurozone and US economies.
Action begins at 07:00 GMT with a report on German industrial production. Factory output in Europe’s largest economy is forecast to drop 0.5% in December after climbing 3.4% the month before. In annualized terms, this translates into growth of 6.8%.
French trade data will make the rounds later in the morning, with Paris set to report a smaller deficit. The French Republic likely saw its deficit shrink to €4.9 billion in December from €5.69 billion the month before.
Later in the morning, the Italian government will report on retail sales for the month of December.
In terms of monetary policy, European Central Bank (ECB) official Sabine Lautenschlager will deliver a speech at 09:00 GMT. The ECB is one of several central banks slowly unwinding record stimulus, a trend that could benefit the euro.
Shifting gears to North America, reports on US consumer credit change and Canadian building permits will make headlines. Meanwhile, Federal Reserve Bank of Chicago President Charles Williams will deliver a speech at 15:15 GMT.
Energy traders will also keep an eye on weekly crude inventory data courtesy of the US Energy Information Administration (EIA). The EIA is expected to show a weekly inventory build of 3.189 million barrels in the period ended 2 February, following an increase of 6.77 million barrels the week before.
Earlier in the session, New Zealand reported much better than expected employment data for the fourth quarter. Total employment rose by 0.5% in October-December, much higher than the 0.2% expansion predicted by economists. Meanwhile, the unemployment rate fell unexpectedly to 4.5% from 4.6%.
NZD/USD
The New Zealand dollar failed to rally following the upbeat jobs numbers, as the NZD/USD fell 0.5% to 0.7309. The pair faces immediate support at the psychological 0.7300 handle. Below that level, the next support zone is clustered around 0.7255. On the flipside, resistance is likely seen all the way up near 0.7375. A breach of this level is needed to test the all-important 0.7400 region.
EUR/USD
Europe’s common currency held its ground on Wednesday after a series of volatile moves the day before. The EUR/USD exchange rate was last seen trading at 1.2389 for a gain of 0.1%. The pair faces immediate resistance at the 1.2430 level, which corresponds to the previous day’s high. Support is located around the 1.2300 level.
GBP/USD
Cable traded slightly higher on Wednesday but held below the key 1.400 region. The GBP/USD has lost some of its luster after scoring multi-year highs at the end of January and early February. Despite the recent skid, the outlook remains generally favourable.
