Forex - Weekly outlook: August 26 - 30 2013-08-25 09:28:19 GMT (Investing) Investing - The dollar was lower against the euro and gave up gains against the yen on Friday, after data showing that U.S. new home sales fell last month dampened expectations that the Federal Reserve will begin tapering in September. The Commerce Department said new home sales fell by a larger-than-forecast 13.4% in July, the largest decline in more than three years. The euro gained ground against the dollar after the data, with EUR/USD briefly rising to highs of 1.3410 before settling at 1.3378, 0.17% higher for the day and ending the week 0.33% higher. The dollar retreated from three-week highs against the yen, with USD/JPY pulling away from 99.15 to settle at 98.73, unchanged for the day, trimming the week’s gains to 1.15%. The data came amid ongoing speculation over whether the Fed will start to scale back its USD85 billion-a-month asset purchase program in September. Wednesday’s minutes of the Fed’s July meeting showed that officials were "broadly comfortable" with plans to reduce asset purchases, but divisions over the timing of possible tapering remain, with almost all committee members agreeing that a change in the purchase program was not yet appropriate. The minutes also described recent U.S. economic data as “mixed “, indicating that plans to taper could be pushed back if the economy was to weaken. The euro remained supported after European Central Bank policymaker Ewald Nowotny said Friday he did not see many arguments for a rate cut. The comments came after euro zone PMI data earlier in the week indicated that the region’s economy is continuing gain momentum. A report on Friday showed that German economic growth was revised up to 0.7% in the second quarter. In the U.K., data on Friday showed that second quarter economic growth was revised up to 0.7% from an initial estimate of 0.6%. The pound initially strengthened following the data, with GBP/USD hitting highs of 1.5636, before falling back to 1.5566, 0.13% lower for the day and down 0.50% for the week. Sentiment on sterling was hit expectations that the improving economic outlook would prompt the Bank of England to raise interest rates sooner than it has indicated. Earlier this month the BoE said it would keep bank rates on hold at record low levels as long as the U.K. unemployment rate remains above 7%. In the week ahead, investors will be looking ahead to revised data on U.S. second quarter growth, as well as reports on the housing sector and consumer confidence. Markets will also be focusing on a speech by BoE Governor Mark Carney on Wednesday, as well as reports on German business climate and German consumer climate. Ahead of the coming week, Investing has compiled a list of these and other significant events likely to affect the markets. Monday, August 26 New Zealand is to release data on the trade balance, the difference in value between imports and exports. Markets in the U.K. are to remain closed for a national holiday. The U.S. is to publish official data on durable goods orders, a leading indicator of production. Tuesday, August 27 The Ifo institute is to release a report on German business climate, a leading indicator of economic health. The U.S. is to publish private sector data on house price inflation as well as a closely watched report on consumer confidence. Wednesday, August 28 Australia is to publish data on completed construction work, an important indicator of activity in the sector. Germany is to release the Gfk report on consumer climate, a leading indicator of consumer spending. The U.K. is to release a private sector report on retail sales, an important economic indicator. BoE Governor Mark Carney is to speak; his comments will be closely watched for indications on the future direction of monetary policy. Later Wednesday, the U.S. is to release private sector data on pending home sales. Thursday, August 29 Japan is to publish data on retail sales, while New Zealand is to publish a private sector report on business confidence. Australia is to publish a report on private capital expenditure, a leading economic indicator. Germany is to release data on the change in the number of people unemployed, as well as preliminary data on consumer price inflation. Elsewhere in the euro zone, Italy is to hold an auction of government bonds. Switzerland is to produce data on the employment level. Canada is to publish data on the current account and raw materials price inflation. The U.S. is to publish revised data on second quarter gross domestic product, the broadest indicator of economic activity, as well as the weekly report on initial jobless claims. Friday, August 30 Japan is to release a series of economic data, including reports on household spending, inflation and industrial production. New Zealand is to release data on building consents, a leading indicator of future construction activity, while Australia is to publish a report on private sector credit. Switzerland is to publish its KOF economic barometer, an important indicator of economic health. The U.K. is to release reports on net lending to individuals and mortgage approvals. The euro zone is to publish preliminary data on consumer price inflation, in addition to data on the unemployment rate. Later in the day, Canada is to publish its monthly report on GDP. 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, as well as reports on personal income and personal spending.
Posted on: Sun, 25 Aug 2013 10:49:29 +0000
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