Dollar strengthens against European majors and Canadian Dollar today. But the greenback weakens against commodity currencies and Yen. Focus is turning to FOMC minutes. The minutes could reveal that FOMC members are more comfortable on the path of growth and inflation. But there’s probably nothing new other than that. In particular, some FOMC members have openly noted that fiscal policies, due to the lack of details, were not taken into account in their decisions and projections. We’d view the March FOMC meeting, with new economic projections, as a much more important one. Released in US session, Canada retail sales dropped -0.5% mom in December. Ex-auto sales dropped -0.3% mom.

German business sentiment brightened

German Ifo business climate rose to 111.0 in February, up from 109.8, above expectation of 109.6. Expectation gauge rose to 104.0, up from 103.2, above expectation of 103.0. Current assessment gauge rose to 118.4, up from 116.9, above expectation of 116.7. The headline number matched a four-year yield. Ifo president Clemens Fuest noted in the statement that "manufacturers were far more satisfied with their current business situation." And, "after deteriorating in January, the business outlook also brightened slightly. Current demand and the number of incoming orders picked up markedly. This positive development was mainly driven by food producers, as well as mechanical and electrical engineering firms." Eurozone CPI was finalized at 1.8% yoy in January. Core CPI was finalized at 0.9% yoy. From Swiss, ZEW expectations rose to 19.4 in February.

UK Q4 GDP revised higher

UK Q4 GDP growth was revised up to 0.7% qoq, up from 0.6% qoq. Total business investments, however, dropped -1.0% qoq versus expectation of 0.0% qoq. Index of services rose 0.8% 3mo3m in December. Investors appeared to take BoE Governor Mark Carney’s parliamentary testimony yesterday positively. Carney noted that there were a range of paths for the economy over the next few years. According to him, "there are scenarios where rates could rise at a faster rate than the market curve, and there are ones where they’d rise more slowly… We didn’t come to an explicit view as a committee on explicit guidance that we wanted to give, so I’m not going to invent one now". BOE in its February inflation report revised higher the growth forecast to 2% in 2017, from 1.4% previously.

Released earlier today, Australia Westpac leading index rose 0.0% mom in January. Wage cost index rose 0.5% qoq in Q4 while construction work done dropped -0.2%.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.0502; (P) 1.0558 (R1) 1.0591; More…..

Break of 1.0520 support confirms resumption of fall from 1.0828. Intraday bias is back on the downside for 1.0339 low. As noted before, corrective rise from 1.0339 has completed at 1.0828 already. Fall from there is likely resuming larger down trend. Break of 1.0339 low will confirm our bearish view and target parity. On the downside, break of 1.0678 is needed to confirm completion of fall from 1.0828. Otherwise, outlook will remain mildly bearish in case of recovery.

In the bigger picture, whole down trend from 1.6039 (2008 high) is in progress. Such down trend is expected to extend to 61.8% projection of 1.3993 to 1.0461 from 1.1298 at 0.9115. On the upside, break of 1.1298 resistance is needed to confirm medium term bottoming. Otherwise, outlook will stay bearish in case of rebound.

Economic Indicators Update