EUR/USD continues to have a quiet week. Currently, EUR/USD is trading at 1.1887, up 0.24% on the day. In economic news, there are no eurozone events on the schedule. In the U.S, the markets are expecting a strong release from CB Consumer Confidence, with an estimate of 128.2 points. Pending Home Sales is forecast to decline by 0.4%.
Recent US housing reports beat expectations, and the markets are hoping for a similar result from Pending Home Sales. Last week, Housing Starts came in at 1.30 million, beating the forecast of 1.25 million. On Tuesday, New Home Sales sparkled, with a gain of 733 thousand. This easily beat the estimate of 654 thousand, and was the highest reading since September 2007.
The week of Christmas is light on fundamentals, with only a handful of economic indicators. On Friday, Germany releases Final CPI, with the markets forecasting a strong gain of 0.5%. If Final CPI meets or exceeds the estimate, the euro should gain some ground against the US dollar. In November, the indicator improved to 0.3%, marking a 4-month high. In the eurozone, annual average inflation also inched higher to 1.5% in November, up from 1.4% in October. This marked a multi-year high. In a nod to stronger economic activity in 2017, the ECB raised its forecasts for growth and inflation for the eurozone from this year through to 2019. Still, inflation remains well below the ECB target of around 2.0%, and ECB policymakers are unlikely to announce an end to their stimulus package until inflation moves closer to the 2.0% target.
