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Forex - Weekly outlook: February 23 - 27

Published 02/22/2015, 06:32 AM
Updated 02/22/2015, 01:32 PM
© Reuters.  Euro moves higher against dollar, yen after Greece agreement reached

Investing.com - The euro pushed higher against the dollar and the yen on Friday after euro zone finance ministers agreed on a deal to extend Greece’s bailout by four months.

EUR/USD edged up 0.13% to 1.1383 in late trade, recovering from session lows of 1.1278, while EUR/JPY was up 0.18% to 135.47.

The euro zone approved the extension of Greece’s €240 billion bailout, removing concerns that the country would face a liquidity crunch when its current bailout agreement expired at the end of the month.

Markets have been hit by growing concerns over a possible Greek exit from the euro area if the country missed a debt payment.

Athens has until Monday to present a list of reforms to be approved by the country’s creditors in order to secure the four-month bailout extension, which will give it more time to reach a lasting agreement with its creditors.

Earlier Friday, data showed that euro zone private sector activity expanded at the fastest pace in seven months in February, but firms continued cutting prices, underlining concerns over persistently low levels of inflation.

The Markit composite flash purchasing managers' index, which measures activity in the manufacturing and services sectors, rose to 53.5, the highest since July 2014 from a final reading of 52.6 last month.

USD/JPY ended Friday’s session at 119.02, little changed for the day.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 94.40 late Friday.

In other trade, the Canadian dollar fell against the U.S. dollar on Friday after official figures showed that Canadian retail sales dropped 2.0% in December, the biggest fall since April 2010.

USD/CAD was up 0.28% to 1.2530 in late trade, and ended the week with gains of 0.6%.

The weaker than expected data was seen as increasing the likelihood of another rate cut by the Bank of Canada, sending the loonie lower.

In the week ahead, Tuesday’s testimony by Federal Reserve Chair Janet Yellen to the Senate Banking Committee will be closely watched for any indication on when U.S. interest rates may start to rise.

Traders will also be watching Monday’s deadline on Greece's financial rescue package.

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

Monday, February 23

The Bank of Japan is to publish the minutes of its latest policy meeting, which contain valuable insights into economic conditions from the bank’s perspective.

Markets in China are to remain closed for a national holiday.

In Germany, the Ifo research group is to publish its report on business climate.

The U.K. is to release private sector data on retail sales.

Later Monday, the U.S. is to publish a report on existing home sales.

Tuesday, February 24

Markets in China are to remain closed for a national holiday.

Switzerland is to publish its monthly employment report.

The euro zone is to release revised data on consumer price inflation.

The U.S. is to produce a private sector report on consumer confidence. Meanwhile, Fed Chair Janet Yellen is to testify on the Semiannual Monetary Policy Report before the Senate Banking Committee, in Washington.

Wednesday, February 25

Australia is to publish a report on the wage price index.

China is to release the preliminary reading of the HSBC manufacturing index.

The U.S. is to release data on new home sales.

Later in the trading day, New Zealand is to produce figures on the trade balance.

Thursday, February 26

Australia is to publish a report on private capital expenditure.

In Germany, the Gfk group is to publish a report on consumer climate. Germany is also to release official employment figures.

The euro zone is to report on M3 money supply and private loans.

Both the U.S. and Canada are to release reports on the consumer price index. The U.S. is also to release data on initial jobless claims and durable goods orders.

Friday, February 27

Japan is to release a string of data, including reports on household spending, inflation, retail sales and industrial production.

New Zealand is to release a private sector report on consumer confidence.

In the euro zone, Germany and Spain are to release preliminary data on consumer price inflation.

Switzerland is to release its KOF economic barometer.

The U.K. is to release revised figures on fourth quarter economic growth, as well as preliminary data on business investment.

The U.S. is to round up the week with revised data on fourth quarter growth, as well as reports on pending home sales, business activity in the Chicago region and consumer sentiment.

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