Investing.com - The euro rallied to a nine-month high against
the U.S. dollar on Friday on signs that the crisis in the euro zone
is abating, while the greenback hit 22-month highs against the yen
as expectations for further easing by the Bank of Japan continued
to weigh on the yen.
The euro extended a rally that began on Thursday after the ECB kept
interest rates unchanged at 0.75% and said a gradual economic
recovery would begin this year, as structural reforms and actions
by the bank to tackle the debt crisis continued to take effect.
The euro had come under pressure ahead of the ECB meeting amid
speculation that ECB President Mario Draghi could hint at possible
rate cuts in the coming months.
The dollar hit its highest level since June 2010 against the yen on
Friday, with USD/JPY rising 0.45% to settle at 89.17 after Japan's
government approved a USD117 billion emergency stimulus package.
Japan's government, led by Prime Minister Shinzo Abe, also pledged
to work more closely with the BoJ to combat deflation and spur
growth, fuelling expectations that the central bank will implement
more aggressive easing measures at its upcoming policy meeting
later this month.
The euro hit 20-months highs against the broadly weaker yen on
Friday, with EUR/JPY rallying 0.98% to settle at 118.98. Elsewhere,
the single currency hit its highest level against the Swiss franc
in over a year, with EUR/CHF up 0.47% to settle at 1.2185.
The dollar was little changed on Friday after official data showed
that the U.S. trade deficit widened unexpectedly in November,
growing to USD48.7 billion, the biggest deficit since April.
Imports climbed 3.8% to USD231.3 billion, while exports rose 1% to
The data came one day after government data showed that China's
trade surplus widened unexpectedly in December, adding to signs of
recovery in the world's second largest economy. Exports rose 14.1%
in December from a year earlier while imports increased by 6%.
In the week ahead, investors will be anticipating a speech by
Federal Reserve Chairman Ben Bernanke on monetary policy and the
recovery from the global financial crisis on Monday, as well as
Tuesday's data on U.S. retail sales for December.
Data from China on fourth quarter gross domestic product and
industrial production will also be closely watched.
Ahead of the coming week, Investing.com has compiled a list of
these and other significant events likely to affect the markets.
Monday, January 14
Markets in Japan will be closed for a national holiday. Australia
is to publish a report on the change in the number of jobs
advertised, a strong indicator of demand in the labor market.
The euro zone is to release official data on industrial production,
while Italy is also to release a report on industrial production.
The Bank of Canada is to release its quarterly business outlook
survey, a leading indicator of economic health.
In the U.S., Fed Chairman Ben Bernanke is to speak at the
University of Michigan; his comments will be closely watched for
any indications on the future possible direction of monetary
Later Monday, New Zealand is to produce a report on business
Tuesday, January 15
The euro zone is to produce official data on the trade balance, the
difference in value between imports and exports.
The U.K. is to release official data on consumer price inflation,
which accounts for a majority of overall inflation, as well as
industry data on house prices, a leading indicator of inflation in
the housing market.
The U.S. is to publish government data on retail sales, the leading
indicator of consumer spending, which comprises the majority of
economic activity, as well as official data on producer price
inflation. In addition, the U.S. is to release data on
manufacturing activity in New York state and a report on business
Wednesday, January 16
Australia is to produce a report on consumer sentiment, a leading
indicator of consumer spending, as well as government data on new
Japan is to release official data on core machinery orders, a
leading indicator of production.
The euro zone is to publish official data on consumer price
inflation, while Germany is to hold an auction of 10-year
government bonds. Elsewhere in Europe, Switzerland is to release
official data on retail sales.
Later Wednesday, the U.S. is to produce government data on consumer
inflation, in addition to data on industrial production and the
capacity utilization rate. The country is also to publish official
data on crude oil stockpiles, while the Fed is to publish its Beige
Book, which looks at current economic conditions.
Thursday, January 17
Japan is release official data on tertiary industry activity, a
leading indicator of economic activity.
Australia is to produce official data on the monthly change in the
number of people claiming unemployment benefits and the
unemployment rate, a leading indicator of economic health. The
country is also to release a report on inflation expectations.
Switzerland is to publish government data on producer price
inflation, a leading indicator of consumer inflation.
The ECB is to release its monthly bulletin, which contains the data
policymakers evaluate when making the monthly interest rate
Canada is to publish official data on foreign securities purchases,
which is linked to currency demand.
Elsewhere, the U.S. was to produce official data on building
permits, a leading indicator of future construction activity, as
well as data on housing starts. The U.S. was also to release the
weekly government report on initial jobless claims and data on
manufacturing activity in Philadelphia.
Later Thursday, New Zealand is to publish official data on consumer
Friday, January 18
China is to release official data on fourth quarter gross domestic
product, the broadest measure of economic output and the leading
indicator of growth. Beijing is also to release government data on
industrial output, fixed asset investment and retail sales.
The U.K. is to produce official data on retail sales, the
government measure of consumer spending, which accounts for the
majority of overall economic activity.
Later in the day, Canada is to publish official data on
manufacturing sales, a leading indicator of economic activity.
The U.S. is to round up the week with preliminary data from the
University of Michigan on consumer sentiment, a leading indicator
of consumer spending.
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