Investing.com - The yen fell to a six month low against the U.S. dollar on Friday, amid expectations for further monetary easing by the Bank of Japan, while the euro remained under pressure from a combination of concerns over Greece and the outlook for the euro zone economy.
The yen weakened broadly after Japan’s Prime Minister Yoshihiko Noda dissolved the lower house of parliament on Friday, setting the stage for elections in December, which are likely to see the opposition party, which advocates more aggressive monetary easing measures, come to power.
On Thursday, Japan’s opposition leader called on the BoJ to print unlimited amounts of money to reach a new inflation target between 2% and 3%.
The euro remained under pressure amid disagreements between the International Monetary Fund and Europe on how best to reduce Greece’s debt to manageable levels.
A decision on disbursing the country’s next tranche of aid, worth EUR31.5 billion, has been postponed until 20 November.
Meanwhile, concerns over the economic outlook for the euro zone mounted after data showed that the closely watched ZEW index of German economic sentiment deteriorated unexpectedly this month, fuelling fears that the debt crisis is creating a drag on the bloc’s largest economy.
The pound ended the week lower against the U.S. dollar and the euro after the Bank of England raised its forecast for short-term inflation and said growth would remain sluggish.
In its quarterly inflation report on Wednesday, the BoE lowered its forecasts for the U.K. economy and said there was a heightened risk of “persistent low growth.”
The dollar remained supported amid concerns over the U.S. fiscal cliff, automatic tax hikes and spending cuts due to come into effect on January 1, which could threaten U.S. and global growth.
In the week ahead market participants will be focusing on developments relating to the U.S. fiscal cliff, as well as Tuesday’s meeting of the euro group of finance ministers to discuss unlocking Greece’s next aid installment.
Investors will also be anticipating data on Japan’s trade balance amid concerns over a slowdown in the country’s largely export driven economy.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, November 19
New Zealand is to release official data on producer price inflation input, a leading indicator of consumer inflation.
The U.K. is to release industry data on house price inflation, a leading indicator of demand in the housing sector.
Later Monday, the U.S. is to release industry data on existing home sales, a leading indicator of economic health.
Tuesday, November 20
The Reserve Bank of Australia is to publish the minutes of its most recent policy setting meeting, which give investors an insight into the bank’s view on the outlook for growth and inflation.
The Bank of Japan is to announce its benchmark interest rate. The rate announcement is to be accompanied by the bank’s rate statement, which contains important insights into current and future economic conditions from the bank’s perspective. The central bank is to hold a press conference to discuss the monetary policy decision after the rate announcement.
Switzerland is to publish official data on the trade balance, the difference in value between imports and exports.
In the euro zone, the eurogroup of finance ministers is to hold talks in Brussels to discuss financial issues in the bloc. Meanwhile, Germany is to release official data on producer price inflation.
Canada is to produce government data on wholesale sales, a leading indicator of consumer spending.
The U.S. is to publish official data on building permits, an excellent gauge of future construction activity, as well as data on housing starts.
Wednesday, November 21
Japan is to publish official data on the trade balance, while the BoJ is to release its monthly report.
The Bank of England is to publish the minutes of its most recent policy setting meeting, which give investors an insight into the bank’s view on the outlook for growth and inflation. The U.K. is also to publish official data on public sector borrowing.
In the euro zone, Spain and Germany are to hold auctions of 10-year government bonds.
Later Wednesday, the U.S. is to release weekly government reports on initial jobless claims and crude oil inventories. This data is being released one day early ahead of the Thanksgiving holiday on Thursday.
In addition, the University of Michigan is to release revised data on consumer sentiment and inflation expectations.
Thursday, November 22
China is to publish its HSBC manufacturing purchasing managers’ index, a leading indicator of economic health.
The euro zone is to release preliminary data on manufacturing and service sector activity, leading indicators of economic strength. Germany and France are also to release individual reports.
Meanwhile, European Union leaders are to hold the first day of a two-day summit in Brussels to discuss Spain and Greece and plans for greater integration of fiscal and monetary policy in the region.
The U.K. is to release industry data on retail sales, an important indicator of economic health.
Canada is to produce official data on retail sales, the primary indicator of consumer spending, which accounts for the majority of economic activity.
Markets in the U.S. are to remain closed for the Thanksgiving holiday.
Friday, November 23
Markets in Japan are to remain closed for a national holiday.
Elsewhere, European Union leaders are to hold a second day of talks in Brussels to discuss Spain and Greece and plans for greater integration of fiscal and monetary policy in the region.
Germany is to release a report on business climate, a leading indicator of economic health.
Canada is to round up the week with official data on consumer price inflation, which accounts for the majority of overall inflation.