Outlook November 11-15 Investing - The euro ended the week sharply lower against the broadly stronger dollar on Friday after a better-than-forecast U.S. jobs report for October reinforced expectations that the Federal Reserve may start reducing stimulus measures next month. EUR/USD ended Friday’s session at 1.3364, down 1.12% for the week, but still holding above the seven week low of 1.3294 struck on Thursday. The U.S. economy added 204,000 jobs in October, the Department of Labor said Friday, significantly higher than the 125,000 expected by economists. The unemployment rate ticked up to 7.3% from an almost five year low of 7.2% the previous month. The robust data indicated that the U.S. economy shrugged off the impact of the government shutdown and fuelled expectations that the Fed may start to reduce its USD85 billion-a-month asset purchase program as soon as next month. The report came one day after official data showed that the U.S. economy grew at an annual rate of 2.8% in the three months to September, well above expectations for growth of 2%. The euro weakened broadly on Thursday after the European Central Bank surprised investors with a rate cut. The ECB unexpectedly cut its benchmark interest rate to 0.25% from 0.5% and indicated that further rate cuts are still possible. ECB President Mario Draghi warned that the euro zone may experience a prolonged period of low inflation, followed by a gradual return back to the bank’s target of close to, but still below 2%. Sentiment on the shared currency was also hit after ratings agency Standard & Poor’s cut France’s sovereign rating to AA from AA+ on Friday, warning that the economic reforms of the past year were not sufficient to lift growth. EUR/JPY settled at 132.41 on Friday, up from Thursday’s three week lows of 131.20, but still ended the week with losses of 0.67%. EUR/GBP settled at 0.8346 on Friday, after falling to 10-month lows of 0.8299 in the previous session and ended the week 1.37% lower. In the week ahead, investors will be closely watching Thursday’s Senate hearing to confirm Janet Yellen as the first chairwoman of the Federal Reserve. Meanwhile, the euro zone is to release preliminary data on third quarter growth. Ahead of the coming week, Investing has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday and Tuesday as there are no relevant events on these days. Wednesday, November 13 The euro zone is to publish data on industrial production, an important indicator of economic health. Thursday, November 14 The euro zone is to release a flash estimate of third quarter GDP, while Germany, France and Italy are also to release preliminary estimates of third quarter growth. The ECB is to publish its monthly bulletin. The U.S. is to release official data on the trade balance, the difference in value between imports and exports and the weekly report on initial jobless claims. Friday, November 15 The euro zone is to release data on consumer price inflation, which accounts for the majority of overall inflation. The U.S. is to round up the week with data on manufacturing activity in the New York
Posted on: Sun, 10 Nov 2013 22:02:28 +0000