Investing.com - The euro climbed to its highest level against the U.S. dollar in more than two weeks on Friday after the International Monetary Fund boosted its capacity to fight the euro zone debt crisis, while upbeat German business sentiment data also lent support.
Market sentiment improved after the Group of 20 leading economies agreed Friday to boost the IMF's lending capacity by USD430 billion, to help shield the global economy from the debt crisis roiling the euro zone.
Elsewhere, the Ifo Institute for Economic Research said its index of German business climate ticked up to 109.9 in April, from 109.8 in the preceding month, against expectations for a decline to 109.5.
The euro came under pressure earlier in the week, briefly dipping against 1.30 against the greenback, as Spain’s borrowing costs rose above 6% amid fears that the government will struggle to reduce one of the largest deficits in the euro zone, in the face of a looming recession.
In the U.S., data on Thursday showed that manufacturing activity in the Philadelphia-region expanded at a slower rate than expected in April and U.S. existing home sales declined unexpectedly last month.
The data came after a government report showing that the number of people who filed for unemployment assistance in the U.S. last week fell less-than-expected, while the previous week’s figure was revised higher.
The Department of Labor said the number of individuals filing for initial jobless benefits in the week ending April 14 fell by 2,000 to a seasonally adjusted 386,000, disappointing expectations for a decline of 18,000 to 370,000.
The previous week’s figure was revised up to 388,000 from 380,000.
The soft data sparked concerns over the strength of the U.S. economic recovery, ahead of the Federal Reserve’s two-day policy meeting this week.
Elsewhere, the broadly stronger pound rose to a five-month high against the greenback on Friday, following better-than-expected retail sales data and amid diminished expectations for a fresh round of monetary stimulus from the Bank of England
Official data showed that retail sales jumped 1.8% on the month in March, the highest jump in more than a year and well above economists' forecasts for an increase of 0.5%.
Earlier in the week, the minutes of the BoE’s April meeting showed that just one policymaker voted in favor of additional easing, after two members of the banks monetary policy committee favored more easing in March.
The yen weakened broadly last week, sliding to its lowest since April 10 against the greenback and hitting a two-week low against the euro, as expectations that the Bank of Japan will implement another round of stimulus measures after this week’s policy meeting weighed.
On Thursday, BoJ Governor Masaaki Shirakawa said the central bank was “committed” to monetary easing in order to meet Japan’s 1% targeted rate of inflation.
In the week ahead, investors will be eyeing the Fed’s rate statement for any signs that the central bank is leaning towards another round of monetary easing, while the euro looks set to remain under pressure as concerns over Spain’s fiscal woes continue.
In addition, the U.K. and the U.S. are both set to release preliminary data on first quarter gross domestic product.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, April 23
Australia is to release official data on producer price inflation, a leading indicator of consumer inflation.
The euro zone is to produce preliminary reports on manufacturing and services purchasing managers’ indexes in France, Germany and throughout the single currency bloc.
Also Monday, Canada is to publish official data on wholesale sales, a key gauge of consumer spending.
Tuesday, April 24
Australia is to release official data on consumer price inflation, which accounts for a majority of overall inflation. Markets in New Zealand will remained closed due to a national holiday.
Switzerland is to publish government data on trade balance, the difference in value between imports and exports. The U.K. is to release an official report on public sector net borrowing.
In the euro zone, official data is to be produced on industrial new orders, a leading indicator of production, followed by a report on the business climate in Belgium.
Later in the day, Canada is to release official data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity. Bank of Canada Governor Mark Carney is also scheduled to testify before the House of Commons Standing Committee on Finance.
Meanwhile, the U.S. is to produce a report on house price inflation, a key indicator of the housing industry’s health, as well as a Conference Board report on consumer confidence and government data on new home sales.
Wednesday, April 25
Markets in Australia and Italy will remain closed due to national holidays. The Reserve Bank of New Zealand is to release its benchmark interest rate, followed by its rate statement.
In the euro zone, European Central Bank President Mario Draghi is due to testify before the European Parliament's Economic and Monetary Committee, in Brussels.
The U.K. is to publish preliminary data on first quarter GDP, the broadest measure of economic activity and the primary gauge of the economy’s health. The country is also to release a report by the Confederation of British Industry on industrial order expectations, a key signal of economic health.
Later in the day, BoC Governor Mark Carney is to testify before the Senate Banking Committee in Ottawa.
The U.S. is to publish government data on durable goods orders, a leading indicator of production, and crude oil stockpiles. The Federal Reserve is to announce its benchmark interest rate and release its rate statement. Also Wednesday, U.S. Treasury Secretary Timothy Geithner is scheduled to speak.
Thursday, April 26
Australia is to release a report on its leading index, which is based on seven economic indicators and is designed to predict the future direction of the economy.
The U.K. is to publish a report by the Nationwide Building Society on consumer confidence, a leading indicator of consumer spending. The country is also to produce industry data on mortgage approvals and retail sales.
In the euro zone, Italy is to hold an auction of 10-year government bonds, while Germany is to release preliminary data on CPI.
Later Thursday, the U.S. is to publish government data on initial unemployment claims, an important signal of overall economic health, as well as industry data on pending home sales.
Friday, April 27
Japan is to publish official data on household spending, which accounts for a majority of overall economic activity, followed by a report on core CPI in Tokyo. The country is also to publish preliminary data on industrial production and government data on retail sales.
Later in the day, the BoJ is to release its monetary policy statement, followed by the overnight call rate, an outlook report and a press conference.
The U.K. is to publish a report by Gfk on consumer confidence and industry data on house price inflation.
In the euro zone, Gfk data on the consumer climate in Germany is also to be produced as well as official data on French consumer spending.
Elsewhere in Europe, Switzerland is to publish a report on the KOF economic barometer, which is a combined reading of 12 economic indicators.
Also Friday, BoC Governor Carney is to speak at the Business Journal's Mayor Breakfast, in Ottawa.
The U.S. is to round up the week with preliminary data on first quarter GDP, as well as reports on the GDP price index and employment cost inflation. In addition, the University of Michigan is to release revised data on consumer sentiment.
Market sentiment improved after the Group of 20 leading economies agreed Friday to boost the IMF's lending capacity by USD430 billion, to help shield the global economy from the debt crisis roiling the euro zone.
Elsewhere, the Ifo Institute for Economic Research said its index of German business climate ticked up to 109.9 in April, from 109.8 in the preceding month, against expectations for a decline to 109.5.
The euro came under pressure earlier in the week, briefly dipping against 1.30 against the greenback, as Spain’s borrowing costs rose above 6% amid fears that the government will struggle to reduce one of the largest deficits in the euro zone, in the face of a looming recession.
In the U.S., data on Thursday showed that manufacturing activity in the Philadelphia-region expanded at a slower rate than expected in April and U.S. existing home sales declined unexpectedly last month.
The data came after a government report showing that the number of people who filed for unemployment assistance in the U.S. last week fell less-than-expected, while the previous week’s figure was revised higher.
The Department of Labor said the number of individuals filing for initial jobless benefits in the week ending April 14 fell by 2,000 to a seasonally adjusted 386,000, disappointing expectations for a decline of 18,000 to 370,000.
The previous week’s figure was revised up to 388,000 from 380,000.
The soft data sparked concerns over the strength of the U.S. economic recovery, ahead of the Federal Reserve’s two-day policy meeting this week.
Elsewhere, the broadly stronger pound rose to a five-month high against the greenback on Friday, following better-than-expected retail sales data and amid diminished expectations for a fresh round of monetary stimulus from the Bank of England
Official data showed that retail sales jumped 1.8% on the month in March, the highest jump in more than a year and well above economists' forecasts for an increase of 0.5%.
Earlier in the week, the minutes of the BoE’s April meeting showed that just one policymaker voted in favor of additional easing, after two members of the banks monetary policy committee favored more easing in March.
The yen weakened broadly last week, sliding to its lowest since April 10 against the greenback and hitting a two-week low against the euro, as expectations that the Bank of Japan will implement another round of stimulus measures after this week’s policy meeting weighed.
On Thursday, BoJ Governor Masaaki Shirakawa said the central bank was “committed” to monetary easing in order to meet Japan’s 1% targeted rate of inflation.
In the week ahead, investors will be eyeing the Fed’s rate statement for any signs that the central bank is leaning towards another round of monetary easing, while the euro looks set to remain under pressure as concerns over Spain’s fiscal woes continue.
In addition, the U.K. and the U.S. are both set to release preliminary data on first quarter gross domestic product.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, April 23
Australia is to release official data on producer price inflation, a leading indicator of consumer inflation.
The euro zone is to produce preliminary reports on manufacturing and services purchasing managers’ indexes in France, Germany and throughout the single currency bloc.
Also Monday, Canada is to publish official data on wholesale sales, a key gauge of consumer spending.
Tuesday, April 24
Australia is to release official data on consumer price inflation, which accounts for a majority of overall inflation. Markets in New Zealand will remained closed due to a national holiday.
Switzerland is to publish government data on trade balance, the difference in value between imports and exports. The U.K. is to release an official report on public sector net borrowing.
In the euro zone, official data is to be produced on industrial new orders, a leading indicator of production, followed by a report on the business climate in Belgium.
Later in the day, Canada is to release official data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity. Bank of Canada Governor Mark Carney is also scheduled to testify before the House of Commons Standing Committee on Finance.
Meanwhile, the U.S. is to produce a report on house price inflation, a key indicator of the housing industry’s health, as well as a Conference Board report on consumer confidence and government data on new home sales.
Wednesday, April 25
Markets in Australia and Italy will remain closed due to national holidays. The Reserve Bank of New Zealand is to release its benchmark interest rate, followed by its rate statement.
In the euro zone, European Central Bank President Mario Draghi is due to testify before the European Parliament's Economic and Monetary Committee, in Brussels.
The U.K. is to publish preliminary data on first quarter GDP, the broadest measure of economic activity and the primary gauge of the economy’s health. The country is also to release a report by the Confederation of British Industry on industrial order expectations, a key signal of economic health.
Later in the day, BoC Governor Mark Carney is to testify before the Senate Banking Committee in Ottawa.
The U.S. is to publish government data on durable goods orders, a leading indicator of production, and crude oil stockpiles. The Federal Reserve is to announce its benchmark interest rate and release its rate statement. Also Wednesday, U.S. Treasury Secretary Timothy Geithner is scheduled to speak.
Thursday, April 26
Australia is to release a report on its leading index, which is based on seven economic indicators and is designed to predict the future direction of the economy.
The U.K. is to publish a report by the Nationwide Building Society on consumer confidence, a leading indicator of consumer spending. The country is also to produce industry data on mortgage approvals and retail sales.
In the euro zone, Italy is to hold an auction of 10-year government bonds, while Germany is to release preliminary data on CPI.
Later Thursday, the U.S. is to publish government data on initial unemployment claims, an important signal of overall economic health, as well as industry data on pending home sales.
Friday, April 27
Japan is to publish official data on household spending, which accounts for a majority of overall economic activity, followed by a report on core CPI in Tokyo. The country is also to publish preliminary data on industrial production and government data on retail sales.
Later in the day, the BoJ is to release its monetary policy statement, followed by the overnight call rate, an outlook report and a press conference.
The U.K. is to publish a report by Gfk on consumer confidence and industry data on house price inflation.
In the euro zone, Gfk data on the consumer climate in Germany is also to be produced as well as official data on French consumer spending.
Elsewhere in Europe, Switzerland is to publish a report on the KOF economic barometer, which is a combined reading of 12 economic indicators.
Also Friday, BoC Governor Carney is to speak at the Business Journal's Mayor Breakfast, in Ottawa.
The U.S. is to round up the week with preliminary data on first quarter GDP, as well as reports on the GDP price index and employment cost inflation. In addition, the University of Michigan is to release revised data on consumer sentiment.