Breaking News
Ad-Free Version. Upgrade your experience. Save up to 40% More details

Forex - Weekly outlook: December 5 - 9

ForexDec 04, 2016 07:10AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
© Reuters. Dollar index ends week lower after mixed U.S. nonfarm payrolls report - The dollar slid against a basket of the major currencies on Friday after data showing that while the U.S. economy added more jobs than forecast last month wage growth declined.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.27% to 100.75 late Friday.

For the week, the index was down 0.68%, its first weekly decline in four weeks.

The Labor Department said the U.S. economy added 178,000 jobs in November from the prior month, while the unemployment rate dropped to 4.6%, its lowest level in nine years.

Economists had forecast nonfarm payrolls rising by 175,000 last month and the unemployment rate remaining unchanged at 4.9%.

However, the report also showed that average hourly earnings fell 0.1% from October, while the annual rate of wage growth slowed to 2.5% from 2.8% in October.

The report underlined the Federal Reserve’s case for raising U.S. interest rates at its upcoming meeting on December 13-14, but the weak wage data clouded the outlook for further rate hikes in 2017.

Investors are currently pricing in a 100% chance of a rate hike this month, according to federal funds futures tracked's Fed Rate Monitor Tool.

Investors see a 93.9% chance that the Fed follows a December rate increase by tightening policy at its next meeting in February

Expectations of higher rates tend to boost the dollar, as higher borrowing costs make the currency more attractive to yield seeking investors.

The dollar weakened against the yen, with USD/JPY down 0.52% at 113.51, paring the week’s gains to 0.77%.

The euro was flat, with EUR/USD at 1.0663 late Friday.

The single currency remained under pressure amid concerns over the health of Italy’s banking system ahead of Sunday’s constitutional referendum, which could see the government resign.

Sterling rose more than 1% against the dollar and the euro, building on the previous session’s strong gains as fears over the prospects of a ‘hard-Brexit’ eased.

GBP/USD was up 1.02% at 1.2720 late Friday, while EUR/GBP dropped 1.02% to 0.8381.

In the week ahead, investors will be closely watching the results of Italy’s referendum vote, which could further destabilize the euro area.

Market watchers will also be turning their attention to Thursday’s European Central Bank meeting and awaiting U.S. data on non-manufacturing activity and consumer confidence going into the holiday period.

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

Monday, December 5

The U.K. is to release data on service sector activity.

The Institute for Supply Management is to release its non-manufacturing PMI.

New York Fed President William Dudley is to speak about the macroeconomic outlook in New York.

St. Louis Fed head James Bullard is to speak at an event in Arizona.

Tuesday, December 6

The Reserve Bank of Australia is to announce its benchmark interest rate and publish a policy statement which outlines economic conditions and the factors affecting the monetary policy decision.

In the euro zone, Germany is to report on factory orders.

Canada is to produce a report on the trade balance.

The U.S. is also to release trade data, along with reports on nonfarm productivity and factory orders.

Wednesday, December 7

Australia is to release data on third quarter economic growth.

The U.K. is to release industry data on house price inflation, as well as official figures on manufacturing and industrial production.

The Bank of Canada is to announce its benchmark interest rate and release its latest policy statement.

Thursday, December 8

Both China and Australia are to release trade data.

The European Central Bank is to announce its latest monetary policy decision. The announcement is to be followed by a press conference with President Mario Draghi.

Canada is to produce reports building permits and new house price inflation.

The U.S. is to release the weekly report on jobless claims.

Friday, December 9

China is to release data on consumer and producer price inflation.

The U.S. is to round up the week with a preliminary reading on consumer sentiment for December from the University of Michigan.

Forex - Weekly outlook: December 5 - 9

Related Articles

Taliban expand economic team as Afghan crisis deepens
Taliban expand economic team as Afghan crisis deepens By Reuters - Sep 21, 2021

(Reuters) - Afghanistan's Taliban government bolstered its economic team on Tuesday, naming a commerce minister and two deputies as the group tries to revive a financial system in...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at’s discretion.

Write your thoughts here
Are you sure you want to delete this chart?
Post also to:
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Are you sure you want to delete this chart?
Replace the attached chart with a new chart ?
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
Sign up with Email