Last week, trading was fairly dynamic, the dollar recovered and traded in the green zone after the bulls overcame the resistance. On the first day of the new week there will be 3 key data releases in the US, the EU and Canada.
In Canada, there are data of the trade sector, which tends to have a tremendous impact on the value of the national currency: the more the country’s exports, the higher the demand for the currency needed to pay for goods. Conversely, the more a country imports goods, the greater the supply of the national currency, it is necessary to pay for imports. Index of current accounts will reflect the change in the value of imports and exports, therefore, if it comes out higher than expected, the Canadian dollar will grow due to increased demand for the currency. If the report falls below expectations, the Canadian dollar will fall due to the increased supply of currency.
In Germany, preliminary data on the Consumer Price Index (MoM) came out yesterday with a forecast of -0.1%. This indicator measures the change in the value of goods and services purchased by German consumers. The CPI is an indicator of inflation, and an increase in the rate of inflation in the country speaks of its economic growth. While a slowdown in inflation indicates an economic downturn. Given that Germany is the largest member of the EU, the CPI above the expected will testify to the rise not only of the national economy, but of the eurozone as a whole. Consequently, the euro exchange rate will increase. Whereas the disappointing CPI will lead to the fall of the euro due to the economic recession in Germany and the EU.
Finally, the CB Consumer Confidence Index came out in the US yesterday. The report showed the degree of confidence of the surveyed households in the country. The indicator is considered the leading indicator of the economic health of the country, as it is directly related to the indicator of consumer spending, which is the lion’s share of economic activity. If the index exceeds expectations, the US dollar will rise, as the market price will likely increase economic activity. The disappointing indicator will lead to the fall of the dollar against the backdrop of the expected decline in economic activity.