Yesterday, the euro advanced sharply against the U.S. dollar after the International Monetary Fund said that it could expand its capacity to 1 trillion dollars from 385 billion dollar in order to support the global economy and prevent the debt crisis from spreading outside the euro-area region.
The German successful bond sale also added positivity to the market and supported the euro to hold onto the gains despite the government’s act of revising growth forecasts.
Today, the pair could fluctuate heavily with the heavy load of fundamentals awaited from the euro-zone and the United States, where during the European session the concentration is expected to remain on the Spanish bond sale and the trade balance figures, where better than expected data could support the euro to continue the upside move against the weakening U.S. dollar.
The data from the United States are expected weak; however, better than expected fundamentals could also support the sentiment to remain positive in the market, in case it was seen in the first place during the European session.
The ECB will release the monthly report for January at 09:00 GMT. At the same time we have the Current Account for November which is likely to improve from the previous recorded 7.5 billion euro deficit in October after the reported huge trade surplus on the back of exports gains.
The U.S. economy will release initial jobless claims for the week ended Dec. 24 and continuing claims for the week ended Dec. 16, where they will be available at 13:30 GMT. At 14:45 GMT,Chicagopurchasing manger is estimated to retreat to 60.2 in Dec. from the previous 62.6. 15 minutes later, pending home sales for Nov. will signal 1.8% advance compared with the preceding 10.4% rise.
The U.S. will start the data at 13:30 GMT with the Inflation Report. The CPI index is expected with 0.1% rise on the month after holding unchanged the previous month and on the year to slow to 3.1% after 3.4%. Excluding food and energy the index is expected with 0.1% rise on the month after 0.2% gain and on the year to hold at 2.2%.
December Housing Starts index is also due the same time and expected flat at 685,000 while Building Permits are expected with 0.7% drop to 675,000 from 681,000.
As for the Jobless Claims for the week ending in January 14 it is also due at 13:30 GMT as usual after last week they rose 24,000 to 399,000 last week.
As for the Philadelphia Fed Index for January the index is due 15:00 GMT and expected to improve slightly to 11.0 from 10.3.
Auctions:
09:30 GMT Spain sells bills
source www.fxempire.com..
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