Dollar Tracks Lower Ahead of U.S Inflation Release
The US dollar was lower against its major trading partners early Wednesday as a quiet data day will give markets time to prepare for Thursday’s consumer inflation release.
Mortgage application data released earlier showed an 8.1% decrease in the most recent week after a 12% jump in the previous week due to rising mortgage rates, higher prices, and a shortage of available homes for sale.
The remaining data on Wednesday’s schedule includes wholesale inventory and sales for December, weekly oil stocks and an update to the Atlanta Fed’s estimate of first-quarter gross domestic product (GDP) growth.
In addition, there are appearances by Federal Reserve officials scheduled for Wednesday that could shed light on the Fed’s thinking following Friday’s impressive January employment report and before Thursday’s consumer price report.
The schedule for the rest of the week includes weekly initial claims on Thursday and the preliminary Michigan Sentiment index for February on Friday. A quick summary of foreign exchange action heading into Wednesday shows that USD-CAD fell slightly to 1.2692 from 1.2704 at the Tuesday US close and from 1.2702 a day earlier.
There is no Canadian data scheduled for release on Wednesday but there is a speech by Bank of Canada Governor Tiff Macklem at noon, with comments on last Friday’s weak Canadian employment report possible.
USD-JPY fell to 115.4411 from 115.5483 at the Tuesday US close, but up from 115.2917 a day earlier. Japanese data released overnight showed service sector confidence fell to a five-month low. GBP-USD rose to 1.3582 from 1.3548 at the Tuesday US close and 1.3548 a day ago.
There is no UK data scheduled for release on Wednesday, leaving the focus on the GDP and industrial production data scheduled for release on Friday. Bank of England Chief Economist and monetary policy committee (MPC) member Huw Pill speaks at 8:10 am ET Wednesday.
EUR-USD rose to 1.144 from 1.1417 at the Tuesday US close and 1.1423 a day earlier. In data released overnight, Germany reported that its trade surplus narrowed in December, while Italy’s industrial production declined in the same month.
There are no speeches by European Central Bank officials scheduled for Wednesday, but there are three set for Thursday and one for Friday. ECB officials have sought to dispel market concerns that a rate increase is near. #Dollar Tracks Lower Ahead of U.S Inflation Release
