By FX Empire.com
The EUR/USD retreated on Thursday as the market started to lock on profits amid generally eased woes over the outlook for the euro area where investors returned to focus on the weak data and the fragile state of the global economy.
Investors remain upbeat on the prospect for a resolution to the debt crisis and see leaders walking in the right path, especially after EC President Jose Barroso presented a broad plan to contain the crisis including economic governance, bank recapitalization, utilization of the EFSF, and helping Greece contain its crisis.
The market though remain tensed as the plans to recapitalize banks is still not clear and with the end of the week on Friday the eyes will turn to the G20 finance chiefs meeting as they will surely discuss the development in Europe and how to contain the crisis including the focus on the banking sector.
On Friday the euro area will end the week with inflation figures for September at 09:00 GMT where the CPI index is expected with 0.8% rise on the month following 0.2% gain and on the year to come in line with the flash estimate at 3.0% after 2.5% in August. Core CPI inflation is expected to rise to 1.5% from 1.2%.
As for the August trade balance that data is also due at 09:00 GMT and investors will assess if exports are helping the euro area growth and whether the trade improved from July’s seasonally adjusted 2.5 billion euro deficit.
The U.S. economy will end the week with heavy data starting at 12:30 GMT with the September Retail Sales as the index is expected to rise moderately by 0.2% less autos after 0.1% gain in August and excluding gas and auto sales are also expected with 0.2% rise after 0.1%.
At 13:55 GMT the University of Michigan confidence for October is expected with a rise to 60.0 from 59.4; and finally at 14:00 GMT Business Inventories for August are expected to hold at 0.4%.
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