Euro Vulnerable as German CPI, Draghi Commentary Looms Ahead

Date

11/27/2014 1:52:45 AM

(MENAFN- DailyFX) DailyFX.com - r>

" style="text-align:justify"> Talking Points:

Aussie NZ Dollars Rise as Australian 3Q Capex Data Tops Expectations
Japanese Yen Higher as Nikkei 225 Drops Fueling Safe-Haven Demand
Euro Vulnerable with German CPI Draghi Commentary in the Spotlight

The Australian and New Zealand Dollars outperformed in overnight trade rising as much as 0.5 percent apiece against the majors. The move followed a supportive Australian Capital Expenditure figures that showed spending on fixed assets unexpectedly rose 0.2 percent in the third quarter. Economists were forecasting a decrease of 1.9 percent ahead of the release.

An increase in capex outlays bodes well for Australian economic growth which is in turn supportive for RBA interest rate bets. It is likewise positive for New Zealand’s output and monetary policy prospects considering Australia is the island nation’s largest export market accounting for over 20 percent of cross-border sales.

The Japanese Yen likewise advanced adding as much as 0.4 percent on average against its leading counterparts. The move paced a drop in Japan’s benchmark Nikkei 225 stock index pointing to risk aversion as the catalyst behind demand for the safety-linked currency.

Looking ahead November’s preliminary German CPI report is in focus in European trading hours. The baseline year-on-year inflation rate is expected to decline to 0.6 percent the lowest in nearly five years. A soft outcome may fuel speculation about ECB stimulus expansion weighing on the Euro.

The single currency may find added downward pressure from scheduled commentary by ECB President Mario Draghi. The central bank chief may echo yesterday’s remarks from Vice President Vitor Constancio who said doubts about the potency of QE are “not well founded” and alluded that the decision to buy sovereign bonds could be made as soon as the first quarter of next year.

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Asia Session

" style="text-align:center"> GMT	" style="text-align:center"> CCY	" style="text-align:center"> EVENT	" style="text-align:center"> ACT	" style="text-align:center"> EXP	" style="text-align:center"> PREV
" style="text-align:center"> 21:45	" style="text-align:center"> NZD	Trade Balance (NZ$) (OCT)	" style="text-align:center"> -908M	" style="text-align:center"> -642M	" style="text-align:center"> -1367M
" style="text-align:center"> 21:45	" style="text-align:center"> NZD	Trade Balance YTD (NZ$) (OCT)	" style="text-align:center"> -107M	" style="text-align:center"> 183M	" style="text-align:center"> 633M
" style="text-align:center"> 21:45	" style="text-align:center"> NZD	Imports (NZ$) (OCT)	" style="text-align:center"> 4.94B	" style="text-align:center"> 4.60B	" style="text-align:center"> 4.98B
" style="text-align:center"> 21:45	" style="text-align:center"> NZD	Exports (NZ$) (OCT)	" style="text-align:center"> 4.03B	" style="text-align:center"> 3.85B	" style="text-align:center"> 3.61B
" style="text-align:center"> 0:00	" style="text-align:center"> AUD	HIA New Home Sales (MoM) (OCT)	" style="text-align:center"> 3.0%	" style="text-align:center"> -	" style="text-align:center"> 0.0%
" style="text-align:center"> 0:30	" style="text-align:center"> AUD	Private Capital Expenditure (3Q)	" style="text-align:center"> 0.2%	" style="text-align:center"> -1.9%	" style="text-align:center"> 1.6%
" style="text-align:center"> 1:30	" style="text-align:center"> CNY	Industrial Profits (YoY) (OCT)	" style="text-align:center"> -2.1%	" style="text-align:center"> -	" style="text-align:center"> 0.4%
" style="text-align:center"> 2:00	" style="text-align:center"> NZD	RBNZ Net Currency Sales (OCT)	" style="text-align:center"> -1M	" style="text-align:center"> -	" style="text-align:center"> -30M

European Session

" style="text-align:center"> GMT	" style="text-align:center"> CCY	" style="text-align:center"> EVENT	" style="text-align:center"> EXP	" style="text-align:center"> PREV	" style="text-align:center"> IMPACT
" style="text-align:center"> 8:15	" style="text-align:center"> CHF	Industrial Production (YoY) (3Q)	" style="text-align:center"> -	" style="text-align:center"> 3.1%	" style="text-align:center"> Low
" style="text-align:center"> 8:55	" style="text-align:center"> EUR	German Unemployment Change (NOV)	" style="text-align:center"> -1K	" style="text-align:center"> -22K	" style="text-align:center"> Medium
" style="text-align:center"> 8:55	" style="text-align:center"> EUR	German Unemployment Rate s.a. (NOV)	" style="text-align:center"> 6.7%	" style="text-align:center"> 6.7%	" style="text-align:center"> Medium
" style="text-align:center"> 9:00	" style="text-align:center"> EUR	ECB's Constancio Presents FSR	" style="text-align:center"> -	" style="text-align:center"> -	" style="text-align:center"> Medium
" style="text-align:center"> 9:00	" style="text-align:center"> EUR	Eurozone M3 s.a. (YoY) (OCT)	" style="text-align:center"> 2.6%	" style="text-align:center"> 2.5%	" style="text-align:center"> Low
" style="text-align:center"> 9:00	" style="text-align:center"> EUR	Eurozone M3 s.a. (3M) (OCT)	" style="text-align:center"> 2.4%	" style="text-align:center"> 2.1%	" style="text-align:center"> Low
" style="text-align:center"> 9:30	" style="text-align:center"> GBP	Lloyds Business Barometer (NOV)	" style="text-align:center"> -	" style="text-align:center"> 35	" style="text-align:center"> Low
" style="text-align:center"> 10:00	" style="text-align:center"> EUR	Eurozone Economic Confidence (NOV)	" style="text-align:center"> 100.3	" style="text-align:center"> 100.7	" style="text-align:center"> Low
" style="text-align:center"> 10:00	" style="text-align:center"> EUR	Eurozone Industrial Confidence (NOV)	" style="text-align:center"> -5.5	" style="text-align:center"> -5.1	" style="text-align:center"> Low
" style="text-align:center"> 10:00	" style="text-align:center"> EUR	Eurozone Consumer Confidence (NOV F)	" style="text-align:center"> -11.6	" style="text-align:center"> -11.6	" style="text-align:center"> Low
" style="text-align:center"> 10:00	" style="text-align:center"> EUR	Eurozone Services Confidence (NOV)	" style="text-align:center"> 4	" style="text-align:center"> 4.4	" style="text-align:center"> Low
" style="text-align:center"> 10:00	" style="text-align:center"> EUR	Eurozone Business Climate Indicator (NOV)	" style="text-align:center"> 0.02	" style="text-align:center"> 0.05	" style="text-align:center"> Low
" style="text-align:center"> 11:30	" style="text-align:center"> EUR	ECB's Draghi Speaks in Helsinki	" style="text-align:center"> -	" style="text-align:center"> -	" style="text-align:center"> Medium
" style="text-align:center"> 12:00	" style="text-align:center"> EUR	German GfK Consumer Conf (DEC)	" style="text-align:center"> 8.6	" style="text-align:center"> 8.5	" style="text-align:center"> Low
" style="text-align:center"> 12:15	" style="text-align:center"> EUR	ECB's Weidmann Speaks in Frankfurt	" style="text-align:center"> -	" style="text-align:center"> -	" style="text-align:center"> Low
" style="text-align:center"> 13:00	" style="text-align:center"> EUR	German CPI (MoM) (NOV P)	" style="text-align:center"> 0.0%	" style="text-align:center"> -0.3%	" style="text-align:center"> High
" style="text-align:center"> 13:00	" style="text-align:center"> EUR	German CPI (YoY) (NOV P)	" style="text-align:center"> 0.6%	" style="text-align:center"> 0.8%	" style="text-align:center"> High
" style="text-align:center"> 13:00	" style="text-align:center"> EUR	German CPI - EU Harmonised (MoM) (NOV P)	" style="text-align:center"> 0.0%	" style="text-align:center"> -0.3%	" style="text-align:center"> High
" style="text-align:center"> 13:00	" style="text-align:center"> EUR	German CPI - EU Harmonised (YoY) (NOV P)	" style="text-align:center"> 0.5%	" style="text-align:center"> 0.7%	" style="text-align:center"> High

Critical Levels

" style="text-align:center"> CCY	" style="text-align:center"> Supp 3	" style="text-align:center"> Supp 2	" style="text-align:center"> Supp 1	" style="text-align:center"> Pivot Point	" style="text-align:center"> Res 1	" style="text-align:center"> Res 2	" style="text-align:center"> Res 3
" style="text-align:center"> EURUSD	" style="text-align:center"> 1.2318	" style="text-align:center"> 1.2406	" style="text-align:center"> 1.2456	" style="text-align:center"> 1.2494	" style="text-align:center"> 1.2544	" style="text-align:center"> 1.2582	" style="text-align:center"> 1.2670
" style="text-align:center"> GBPUSD	" style="text-align:center"> 1.5505	" style="text-align:center"> 1.5632	" style="text-align:center"> 1.5712	" style="text-align:center"> 1.5759	" style="text-align:center"> 1.5839	" style="text-align:center"> 1.5886	" style="text-align:center"> 1.6013

" style="text-align:justify"> --- Written by Ilya Spivak Currency Strategist for DailyFX.com

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" style="text-align:justify"> Contact and follow Ilya on Twitter: @IlyaSpivak

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