Trump Deflates USD Ahead of Inflation Data

Daily Update

Yesterday’s Market

• AUD Home Loans
• JPY Industrial Production
• GBP Producer Price Index – Output & Input, Consumer Price Index, Core Consumer Price Index
• EUR ZEW Survey – Current Situation and Economic Sentiment
• GBP UK Prime Minister Theresa May speech

Yesterday Explained

Early morning Australia released its Home Loans reported a positive figure which was better than expected. This helped Australian dollar gain positive growth in the early trading hours. This was followed by Industrial production report from japan which came out as expected, supported JPY to maintain its positive gains against USD.

UK Inflation data came out with mixed results which gave positive boost to GBP ahead of Theresa Mays speech. UK Prime Minister Theresa May and the Sterling stole the show this Tuesday, by confirming the UK is ready to go for a hard Brexit, but with a quite conciliatory tone and even agreed to  submit to the local parliament the final Brexit deal. Her wording helped to ease near-term concerns over a hard-Brexit, but indeed it will be a bumpy road ahead. Her comments sent GBP 2.8% up for the first time since 2008.

President-elect Trump could not wait for after his inauguration and gave an interview to the Wall Street Journal where he said the American currency was “too strong”. The USD has lost close to 1% versus major rivals since the interview was published yesterday morning.

Today’s Market

• AUD Westpac Consumer Confidence Index
• EUR Consumer Price Index, Consumer Price Index - Core, Harmonized Index of Consumer Prices
• GBP Claimant count rate & Change, ILO Unemployment rate, Average Earnings including Bonus
• USD Consumer Price Index & Consumer Price Index ex Food & Energy, Industrial Production, Capacity Utilization, NAHB Housing Market Index & Fed’s Beige Book
• CAD BOC Rate statement & Interest Rate decision
• USD Fed’s Janet Yellen's Speech

Today’s Focus

The day will be full of major economic reports from USA, Europe, Canada and UK while Investors will also focus on what Janet Yellen has to say in her speech later in the evening.

Day will start with Westpac Consumer Confidence Index from Australia which captures economic sentiment of residents and their view on economic conditions over the next 5 years. Final half of the day will be filled with major economic reports on Inflation from Europe and UK which will be followed USA.

Next will be Rate statement & Interest Rate decision from bank of Canada. Canada’s central bank maintained its overnight rate at 0.5% at its December’s meeting. Despite an improvement in global conditions, uncertainty remains high, badly affecting business confidence and investment. The day will finally end with a speech by Federal Reserve Chairperson Janet Yellen.