Economic Events Outlook, Dec 18 – Series of Fundamentals Lining Up

Posted Tuesday, December 18, 2018 by
Arslan Butt • 2 min read

It’s a day before the FOMC and the US dollar remains under pressure. The forex traders countdown to a significant Federal Reserve meeting tomorrow. Fellas, considering the slowdown in global economies, there’s a speculation that Federal Reserve will soon hit the pause button to its monetary tightening cycle. Which is why we aren’t seeing major moves in the market for now as most of the market participants are securing theirs for the rate hike. It’s the only major event due ahead of the Christmas holidays.

In this update, I’m going to highlight a few low and medium impact economic events which may cause 30/40 pips to move on their release. Let’s look at them.

Watchlist – Key Economic Events Today

Eurozone – EUR

German Ifo Business Climate – At 9:00 (GMT), Ifo Institute for Economic Research will be releasing the German Business Climate data. For your info, it’s a survey of about 7K businesses which asks respondents to rate the relative level of current business conditions and expectations for the next six months.

As per economists forecast, a slight drop is expected from 102 to 101.8 which may not place any impact on single currency Euro. However, a significant change can offer us a quick trade opportunity in Euro currency pairs.

U.S. Dollar – USD

Building Permits m/m – The Census Bureau will be there to release the building permits. It’s an excellent gauge of future construction activity because obtaining a permit is among the first steps in constructing a new building. Inevitably, we only invest in capital assets when the economic activities are on track. As per economist’s forecast, the building permits are likely to rise from 1.26M to 1.27M in December. Investors should be ready to trade it at 13:30 (GMT).

The Housing Starts are also due at 13:130 (GMT) and it’s expected to be steady at 1.23M, the same figure as the previous month. It shows the annualized number of new residential buildings that began construction during the previous month.

Both data are releasing at the same time, so in order to have a significant reaction, both figures would need to go in the same direction. This way, we can capture a quick trade in dollar-denominated currency pairs.

New Zealand Dollar – NZD

Current Account – At 21:45 (GMT), the Statistics New Zealand will be releasing the current account figure. The current account deficit is expected to fall to -5.94B vs. -1.262B in October.

How it Impacts New Zealand Dollar?
Newbies, the current account is directly linked to currency demand. A rising surplus indicates that foreigners are buying more of the domestic currency to execute transactions in the country. Hence, a rising demand for a currency improves its exchange rate among peer currencies.

Good luck today!

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