Forex - Weekly outlook: June 24 - 28
Investing.com - The dollar ended the week sharply higher against
the other major currencies on Friday after the Federal Reserve said
Wednesday it could start scaling back its bond buying program by
the end of the year.
The dollar strengthened against the yen, with USD/JPY climbing 3.82% for the week to settle at 97.88, the largest weekly gain since December 2009.
The euro fell against the dollar, with EUR/USD dropping 1.7% for the week, to close at 1.3119, the biggest weekly decline since early February.
The dollar rallied after Fed Chairman Ben Bernanke said the bank could begin slowing asset purchases by the end of 2013 and wind them down completely by the middle of 2014 if the economy picks up as the central bank expects.
The bank said it expects the U.S. economy to grow between 2.3% and 2.6% in 2013. The Fed also said it expects the unemployment rate to fall to between 6.5% and 6.8% by the end of 2014 and inflation to edge closer to its 2% target.
The euro came under pressure on Friday after Greece's Democratic Left party withdrew from the coalition government in protest over planned public sector layoffs, leaving the government with only a slim majority in parliament.
The Canadian dollar fell to 20-month lows against the greenback on Friday after official data showed that Canadian consumer inflation rose less-than-expected in May, and Canadian retail sales came in below expectations in April.
USD/CAD hit 1.0487 on Friday, the pair's highest since late November 2011, before trimming gains to settle at 1.0451, up 2.67% for the week.
The Australian dollar ended the week close to 33-month lows against the greenback as a combination of concerns over an end to the Fed's assets purchase program and fears over a deepening slowdown in China weighed.
AUD/USD hit 0.9161 on Thursday, the pair's lowest since September 2010, before settling at 0.9217 by the close of trade on Friday, down 3.58% for the week.
The New Zealand dollar fell to one-year lows against the greenback on Friday, with NZD/USD falling 3.76% for the week.
In the week ahead, investors will be closely watching U.S. data on durable goods orders, jobless claims and consumer confidence for signs that the economic recovery is on track. A European Union economic summit will also be in focus as concerns over the economic outlook for the euro zone linger.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, June 24
The Ifo institute is to release a report on German business climate, a leading indicator of economic health.
Tuesday, June 25
The U.K. is to publish industry data on mortgage approvals, a leading indicator of demand in the housing sector. Meanwhile, Bank of England policymakers are to testify on inflation and the economic outlook before the parliamentary treasury committee.
In the euro zone, Italy is to hold an auction of 10-year government bonds.
The U.S. is to publish official data on durable goods orders, a leading indicator of production, as well as closely watched reports on consumer confidence and new home sales.
Wednesday, June 26
Germany is to release the Gfk report on consumer climate, a leading indicator of consumer spending.
The BoE is to release its financial stability report, while the U.K. is to release private sector data on retail sales.
Later Wednesday, the U.S. is to release revised data on first quarter economic growth as well as government data on crude oil stockpiles.
Thursday, June 27
New Zealand is to release official data on the trade balance, the difference in value between imports and exports, as well as data on business confidence.
In the euro zone, European Union leaders are to hold the first day of a two day economic summit. Germany is to release official data on the change in the number of people unemployed, a leading economic indicator.
The U.K. is to publish official data on the current account and revised data on first quarter economic growth.
Later Thursday, the U.S. is to release the weekly government report on initial jobless claims along with data on personal income and expenditure, which is to be followed by private sector data on pending home sales.
Friday, June 28
Japan is to release a series of economic data, including reports on household spending, inflation, retail sales and preliminary data on industrial production.
Australia is to publish government data on private sector credit.
In the euro zone, EU leaders are to hold the second day of a two day economic summit in Brussels.
Germany is to release preliminary data on consumer price inflation, which accounts for a majority of overall inflation, while France is to produce data on consumer spending.
Switzerland is to publish its KOF economic barometer, an important indicator of economic health.
Later in the day, Canada is to publish its monthly report on gross domestic product, the broadest indicator of economic activity and the leading measure of the economy's health.
The U.S. is to round up the week with a report on manufacturing activity in Chicago and revised data from the University of Michigan on consumer sentiment.
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