Happy Weekend, traders. 

The Euro fell to more than two-year lows against the dollar as anxieties about an explicit rise in the number of new cases of the coronavirus outbreak in China led investors to seek out U.S. assets.

Concerns about the length of the coronavirus in China following officials in Hubei proclaimed a sharp jump in new diseases and deaths had held both the safe-haven yen and the dollar well preserved. 

The greenback, which contains the currency against a box of competitors, increased to its strongest since October. It has increased by 0.4% this week – on top of gains of 1.3% last week. The United States is expected to weather the economic impact of the virus better than the Eurozone.

German ZEW Economic Sentiment – Tuesday – 10:00 GMT

On Tuesday, the investors should monitor German ZEW Economic Sentiment, which is expected to rise by 0.9 points. For your info, this Zew Economic Sentiment is a survey of about 300 German institutional investors and analysts, which asks respondents to rate the relative 6-month economic outlook for Germany.

The well-respected indicator index is released by the Zentrum für Europäische Wirtschaftsforschung and typically drives sharp fluctuations in Euro pairs and European stock Indices. Lately, it hit a high of 26.7

points in Jan — displaying substantial pessimism. Economists expect a minor increase to 20.0 points, pointing to a slight rise in the economy.

GBP – UK CPI y/y – Wednesday – 9:30 GMT

The office of Office for National Statistics will be releasing the U.K.’s inflation figures. British CPI fell sharply to 1.3% in Jan, precisely below the BOE’s target. Economists are expecting a slight rise in the inflation rate this month by 1.7%, so we may not see any changes from the BOE policy decision and tone. This can support the Sterling in the coming week. 

BP – Retail Sales m/m – Thursday – 9:30 GMT

The Office for National Statistics is due to release the retail sales data at 9:30 GMT. It’s the primary gauge of consumer spending, which accounts for the majority of overall economic activity. In Jan, the retail sales slipped by -0.6% vs. the forecast of -0.8%, extending slight support to Pound.

This month, economists are expecting a jump of 0.7% in retail sales. A positive number of sales indicate strong inflation and growth in the economy. Therefore, the Sterling bears can face challenges on Thursday.

Eurozone Manufacturing & Services PMO Figures – Friday 

French Flash Manufacturing PMI – The figure is due at 08:15 GMT with a forecast of 51.5 vs. 51.7 during the previous month.

French Flash Services PMI – Besides the French Manufacturing PMI, the services PMI will be observed. It’s expected to soar slightly to 52.1 vs. 52.2.

German Flash Manufacturing PMI – The data will be released at 08:30 GMT, around 15 minutes after France’s figures. Germany is one of the biggest business hubs of the Eurozone, but it’s been struggling with the manufacturing figures. Since Q4 2018, the PMI figures are staying below 50, which show slacks in the German manufacturing sector. Even now, in 2019, the German manufacturing PMI has dropped gradually from 49.9 in January to 41.9 in November.

The economy is expected to show a slight surge in PMI figure from 44.1 to 44.6, which is likely to support the single currency Euro.

German Flash Services PMI – On the other hand, Services PMI is scheduled with a forecast of 52.0, slightly above the previous month’s figure of 51.7.

Flash Manufacturing PMI – At 9:00 GMT, Markit is due to release Flash Manufacturing PMI with a positive forecast of 47.3 vs. 46.9 during the prior month.

Although it’s below 50, it may not place any significant impact on the market as speculators have already priced in the 47.3 figure. By any means, if the number crosses 50, we may see some great price action in the Euro today.

Flash Services PMI – Alongside the flash services, PMI stays over 50 and is expected to be 52.0. It’s slightly above the previous month 51.9 but may not place any significant impact on the market.

Good luck today, and see you soon with the next update!