Forex - Weekly outlook: December 3 - 7
The euro ended the week close to a five-week high against the dollar and a seven-month high against the broadly weaker yen as hopes for an agreement to avoid the U.S. fiscal cliff supported market sentiment.
Markets continued to focus on negotiations between Democrats and Republicans to avoid a set of spending cuts and tax increases due to come into effect on January 1 if U.S. lawmakers cannot reach an agreement on reducing the budget deficit.
House Speaker John Boehner said Thursday that there has been little progress in talks but Senate Majority Leader Harry Reid said he thought Congress could finalize a deal this year.
The euro found support after Germany’s parliament approved a new aid package for Greece on Friday by a large majority.
However, concerns over the economic outlook for the euro zone continued to weigh after official data on Friday showed that German retail sales fell sharply in October, while a separate report showed that the unemployment rate in the euro zone hit a record high 11.7% in October.
The yen remained under broad selling pressure amid expectations that upcoming elections on December 16 will result in growing political pressure on the Bank of Japan to implement more aggressive monetary easing measures.
On Friday, Japanese opposition leader Shinzo Abe, widely expected to become the new prime minister, reiterated that he favors more easing by the BoJ to spur growth.
The pound ended the week slightly lower against the greenback on Friday as concerns over the outlook for the economic recovery kept alive speculation over the possibility of further easing by the Bank of England.
Speaking on Thursday, BoE Governor Mervyn King warned that the environment in the UK economy was "exceptionally challenging."
Investors will be looking ahead to policy decisions by the European Central Bank and the BoE later in the week, while Friday’s data on U.S. nonfarm payrolls will also be closely watched.
Ahead of the coming week, Forexpros has compiled a list of these and other significant events likely to affect the markets.
Monday, December 3
Australia is to publish official data on retail sales, the primary indicator of consumer spending, which accounts for the majority of economic activity.
Elsewhere, BoJ Governor Masaaki Shirakawa is to speak at an event in Paris; his comments will be closely watched for any indications on the future possible direction of monetary policy.
In the euro zone, Spain and Italy are to release official data on manufacturing activity, a leading indicator of economic health. In addition, the eurogroup of euro zone finance ministers are to hold talks in Brussels.
Switzerland is to publish government data on retail sales and a separate report on manufacturing activity.
The U.K. is also to release data on manufacturing activity, a leading indicator of economic health.
Later Monday, the Institute of Supply Management is to produce a report on manufacturing growth in the U.S.
Tuesday, December 4
The Reserve Bank of Australia is to announce its benchmark interest rate. The rate announcement is to be accompanied by the bank’s rate statement, which contains important insights into current and future economic conditions from the bank’s perspective.
Australia is also to release official data on building permits, an excellent gauge of future construction activity.
In the euro zone, Spain is to publish government data on the change in the number of unemployed people, a leading indicator of economic health. Meanwhile, finance ministers from the European Union are to hold talks in Brussels.
The U.K. is to produce data on construction sector activity, a leading indicator of economic health.
Also Tuesday, the Bank of Canada is to announce its benchmark interest rate. The rate announcement is to be accompanied by the central bank’s rate statement.
Read Full Article>>>
The euro ended the week close to a five-week high against the dollar and a seven-month high against the broadly weaker yen as hopes for an agreement to avoid the U.S. fiscal cliff supported market sentiment.
Markets continued to focus on negotiations between Democrats and Republicans to avoid a set of spending cuts and tax increases due to come into effect on January 1 if U.S. lawmakers cannot reach an agreement on reducing the budget deficit.
House Speaker John Boehner said Thursday that there has been little progress in talks but Senate Majority Leader Harry Reid said he thought Congress could finalize a deal this year.
The euro found support after Germany’s parliament approved a new aid package for Greece on Friday by a large majority.
However, concerns over the economic outlook for the euro zone continued to weigh after official data on Friday showed that German retail sales fell sharply in October, while a separate report showed that the unemployment rate in the euro zone hit a record high 11.7% in October.
The yen remained under broad selling pressure amid expectations that upcoming elections on December 16 will result in growing political pressure on the Bank of Japan to implement more aggressive monetary easing measures.
On Friday, Japanese opposition leader Shinzo Abe, widely expected to become the new prime minister, reiterated that he favors more easing by the BoJ to spur growth.
The pound ended the week slightly lower against the greenback on Friday as concerns over the outlook for the economic recovery kept alive speculation over the possibility of further easing by the Bank of England.
Speaking on Thursday, BoE Governor Mervyn King warned that the environment in the UK economy was "exceptionally challenging."
Investors will be looking ahead to policy decisions by the European Central Bank and the BoE later in the week, while Friday’s data on U.S. nonfarm payrolls will also be closely watched.
Ahead of the coming week, Forexpros has compiled a list of these and other significant events likely to affect the markets.
Monday, December 3
Australia is to publish official data on retail sales, the primary indicator of consumer spending, which accounts for the majority of economic activity.
Elsewhere, BoJ Governor Masaaki Shirakawa is to speak at an event in Paris; his comments will be closely watched for any indications on the future possible direction of monetary policy.
In the euro zone, Spain and Italy are to release official data on manufacturing activity, a leading indicator of economic health. In addition, the eurogroup of euro zone finance ministers are to hold talks in Brussels.
Switzerland is to publish government data on retail sales and a separate report on manufacturing activity.
The U.K. is also to release data on manufacturing activity, a leading indicator of economic health.
Later Monday, the Institute of Supply Management is to produce a report on manufacturing growth in the U.S.
Tuesday, December 4
The Reserve Bank of Australia is to announce its benchmark interest rate. The rate announcement is to be accompanied by the bank’s rate statement, which contains important insights into current and future economic conditions from the bank’s perspective.
Australia is also to release official data on building permits, an excellent gauge of future construction activity.
In the euro zone, Spain is to publish government data on the change in the number of unemployed people, a leading indicator of economic health. Meanwhile, finance ministers from the European Union are to hold talks in Brussels.
The U.K. is to produce data on construction sector activity, a leading indicator of economic health.
Also Tuesday, the Bank of Canada is to announce its benchmark interest rate. The rate announcement is to be accompanied by the central bank’s rate statement.
Read Full Article>>>