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Forex - Weekly outlook: April 18-22

Published 04/17/2011, 04:33 AM
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Investing.com – The euro slipped against the U.S. dollar on Friday, amid concerns over the sovereign debt levels of peripheral nations, but the single currency remained well supported by expectations for further euro zone rate hikes this year.

The euro came under pressure after Moody's Investors Service downgraded Ireland's government debt by two notches as the government struggles to lower the budget deficit and restore economic growth.

However, the single currency found support after European Central Bank Vice President Vitor Constancio said the bank stood prepared to do what was necessary to control inflation.

But the dollar fell to a more than two-week low against the yen amid expectations that the Federal Reserve will continue to keep interest rates at record lows to support the U.S. economic recovery.

Fed Vice Chairman Janet Yellen said Monday that an increase in food and fuel costs would have only a temporary impact on inflation and consumer spending and did not warrant a reversal of record monetary stimulus.

Meanwhile, the pound closed the week slightly lower against the greenback after soft U.K. inflation figures on Tuesday dampened expectations for a near-term rate hike by the Bank of England.

Also last week, New Zealand’s dollar rallied to a three-year high versus the greenback after the country’s Finance Minister Bill English said accelerating inflation won’t hamper the economy.

In the week ahead, investors will be looking towards U.S. government data on building permits and home sales, as well as official data on New Zealand’s consumer price index, due for release on Monday.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.

Monday, April 18

New Zealand is to begin the week with official data on consumer price inflation, which accounts for a majority of overall inflation.

In the U.K., property website Rightmove is to publish a report on house price inflation, a leading indicator of the housing industry's health.

Later in the day, Canada is to release government data on foreign securities purchases, which is directly linked to currency demand.

Also Monday, Federal Reserve Bank of Dallas President Richard Fisher is due to speak at two events in Atlanta.

Tuesday, April 19

The Reserve Bank of Australia is to publish the minutes of this month’s policy meeting. The minutes give investors an in-depth insight into the economic conditions that influenced their decision on where to set interest rates.

Later in the day, the euro zone is to publish preliminary data on activity in the manufacturing and service sectors, while France and Germany are to produce individual reports.

Canada is to publish official data on consumer price inflation, which accounts for a majority of overall inflation. In addition, the country is to publish government data on wholesale sales, a leading indicator of consumer spending as well as an index of leading economic indicators.

Also Tuesday, the U.S. is to publish government data on building permits, an excellent gauge of future construction activity as well as a report on housing starts, a leading indicator of economic health.

Wednesday, April 20


Japan is to publish official data on its trade balance, the difference in value between imported and exported goods and services, as well as data on tertiary industry activity, a leading indicator of economic health.

Australia is to release government data on import prices, which contribute to inflation while the Melbourne Institute is to publish an index of leading economic indicators, designed to predict the direction of the economy.

In the euro zone, Germany is to publish official data on producer price inflation, a leading indicator of consumer inflation.

In the U.K., the BoE is to publish the minutes of its April policy meeting. The minutes give investors an in-depth insight into the economic conditions that influenced their decision on where to set interest rates.

Later Wednesday, the U.S. is to publish industry data on existing home sales, a leading indicator of economic health. The country is also to publish a government report on crude oil stockpiles.

Thursday, April 21


Australia is to release official data on producer price inflation, a leading indicator of consumer inflation, while New Zealand is to produce a report on credit card spending.

In the euro zone, the Ifo Institute for Economic Research is to publish a report on German business climate, a leading indicator of economic health. Later in the day, the National Bank of Belgium is to publish its Belgian business climate index.

Meanwhile, the U.K. is to produce official data on retail sales, a primary gauge of consumer spending. The country is also to publish government data on public sector borrowing as well as preliminary data on mortgage approvals.

The U.S. is to publish official data on initial jobless claims, the nation’s earliest employment data. The country is also to publish data on house prices and natural gas stockpiles. Meanwhile, the Federal Reserve Bank of Philadelphia is to publish an index of manufacturing activity, a leading indicator of economic health.

In addition, Canada is to publish official data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

Friday, April 22

Markets in the euro zone, Switzerland, the United Kingdom, Canada, Australia and New Zealand will be closed for Good Friday.

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