Investing.com - The U.S. dollar was lower against the euro on Friday, but ended the week higher overall, as uncertainty over whether Spain will formally request a bailout curbed demand for the single currency.
The euro remained supported by speculation that Spain was moving closer to requesting fiscal aid from its euro zone partners following a downgrade by ratings agency Standard & Poor’s.
S&P cut the country’s credit rating to BBB-minus with a negative outlook late Wednesday, just one notch above junk status, citing “mounting risks to Spain’s public finances.”
A bailout request by Madrid would trigger the European Central Bank’s bond purchasing program, aimed at lowering borrowing costs for struggling euro zone states.
The dollar was higher against the yen on Friday after official data showed that U.S. consumer sentiment rose to its highest level in five years in October and a separate report showing that producer price inflation rose more-than-forecast in September.
The University of Michigan said that its consumer sentiment index rose to a seasonally adjusted 83.1 from 78.3 in September, the highest level since September 2007.
The data came one day after the U.S. Department of Labor said the number of individuals filing for initial jobless benefits fell by 30,000 to a seasonally adjusted 339,000 in the previous week, compared to expectations for an increase of 1,000.
However, as the figures were released a spokesman for the Labor Department said one large state had not reported additional quarterly figures, accounting for a significant part of the steep decline in claims.
The yen also remained under pressure after Thursday’s minutes of the Bank of Japan’s September meeting indicated that some policymakers were leaning towards more aggressive easing measures, boosting expectations that the central bank may ease policy again later this month.
Elsewhere, the pound ended the week lower against the dollar as recent weak U.K. data undermined hopes for a sustained economic recovery and kept alive speculation over another round of easing by the Bank of England.
On Tuesday, the International Monetary Fund said that U.K. economy would contract by 0.4% this year before recovering to 1.1% growth in 2013, compared to its July forecast for 0.2% growth this year and 1.4% growth in 2013.
In the week ahead, markets will continue to continue to focus on whether Spain will formally request a bailout and if international creditors will extend loans to Greece as the country struggles to meet deficit reduction targets.
Meanwhile, the U.S. is to release a flurry of data, including reports on retail sales, manufacturing activity in New York and Philadelphia, initial jobless claims and housing starts, among others.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 15
Australia is to produce official data on home loans, a leading indicator of the health of the housing sector. The country is also to publish government data on new vehicle sales, a leading indicator of consumer sentiment.
New Zealand is to publish official data on consumer price inflation, which accounts for the majority of overall inflation.
The U.K. is to publish industry data on house price inflation, an important indicator of demand in the housing sector. Elsewhere in Europe, Switzerland is to release government data on producer price inflation, a leading indicator of consumer inflation.
The Bank of Canada is to publish its business outlook survey, a leading indicator of economic health.
Also Monday, the U.S. is to produce official data on retail sales, the primary indicator of consumer spending, which accounts for the majority of economic activity. In addition, the U.S. is to release data on manufacturing activity in New York state, as well as official data on business inventories.
Tuesday, October 16
The Reserve Bank of Australia is to publish the minutes of its most recent policy meeting. The minutes contain important insights into current and future economic conditions from the bank’s perspective.
The U.K. is to release official data on consumer and producer price inflation and hold an auction of 30-year government bonds.
The euro zone is also to release official data on consumer price inflation. The ZEW Institute is to publish data on German economic sentiment, a leading indicator of economic health, as well as data on economic sentiment in the wider euro area. In addition, Spain and Greece are scheduled to hold auctions of government debt.
Canada is to produce official data on manufacturing sales, a leading indicator of economic health. The country is also to produce official data on foreign securities purchases.
The U.S. is to release government data on consumer price inflation and industrial production. The U.S. is also to produce official data on treasury long-term purchases and the capacity utilization rate.
Wednesday, October 17
Australia is to publish an index of leading economic indicators, designed to predict the future direction of the economy.
The U.K. is to publish a report on the change in the number of people claiming unemployment benefits and the unemployment rate, while the Bank of England is to publish the minutes of its most recent policy setting meeting.
Elsewhere in Europe, the ZEW Institute is to publish a report on Swiss economic expectations, a leading indicator of economic health.
Later Wednesday, the U.S. is to publish government data on building permits, an excellent gauge of future construction activity, as well as data on housing starts, a leading indicator of economic health. The U.S. is also to produce official data on crude oil stockpiles.
Thursday, October 18
Australia is to publish a report on business confidence, an important indicator of economic health.
In the euro zone, Spain and France are scheduled to hold auctions of government debt.
Switzerland is to release official data on the trade balance, the difference in value between imports and exports.
Elsewhere in Europe, the U.K. is to produce official data on retail sales, the primary indicator of consumer spending, which accounts for the majority of economic activity.
Later in the day, Canada is to release government data on wholesale sales, a leading indicator of consumer spending.
The U.S. is to publish weekly government data on initial jobless claims, as well as a report on manufacturing activity in Philadelphia, a leading indicator of economic strength.
Friday, October 19
The euro zone is to publish official data on the current account, which is closely linked to currency demand. Meanwhile, Germany is to release government data on producer price inflation.
Elsewhere in Europe, the U.K. is to produce official data on public sector borrowing.
Canada is to release official data on consumer price inflation, which accounts for the majority of overall inflation.
The U.S. is to round up the week with industry data on existing home sales, a leading indicator of economic health.
The euro remained supported by speculation that Spain was moving closer to requesting fiscal aid from its euro zone partners following a downgrade by ratings agency Standard & Poor’s.
S&P cut the country’s credit rating to BBB-minus with a negative outlook late Wednesday, just one notch above junk status, citing “mounting risks to Spain’s public finances.”
A bailout request by Madrid would trigger the European Central Bank’s bond purchasing program, aimed at lowering borrowing costs for struggling euro zone states.
The dollar was higher against the yen on Friday after official data showed that U.S. consumer sentiment rose to its highest level in five years in October and a separate report showing that producer price inflation rose more-than-forecast in September.
The University of Michigan said that its consumer sentiment index rose to a seasonally adjusted 83.1 from 78.3 in September, the highest level since September 2007.
The data came one day after the U.S. Department of Labor said the number of individuals filing for initial jobless benefits fell by 30,000 to a seasonally adjusted 339,000 in the previous week, compared to expectations for an increase of 1,000.
However, as the figures were released a spokesman for the Labor Department said one large state had not reported additional quarterly figures, accounting for a significant part of the steep decline in claims.
The yen also remained under pressure after Thursday’s minutes of the Bank of Japan’s September meeting indicated that some policymakers were leaning towards more aggressive easing measures, boosting expectations that the central bank may ease policy again later this month.
Elsewhere, the pound ended the week lower against the dollar as recent weak U.K. data undermined hopes for a sustained economic recovery and kept alive speculation over another round of easing by the Bank of England.
On Tuesday, the International Monetary Fund said that U.K. economy would contract by 0.4% this year before recovering to 1.1% growth in 2013, compared to its July forecast for 0.2% growth this year and 1.4% growth in 2013.
In the week ahead, markets will continue to continue to focus on whether Spain will formally request a bailout and if international creditors will extend loans to Greece as the country struggles to meet deficit reduction targets.
Meanwhile, the U.S. is to release a flurry of data, including reports on retail sales, manufacturing activity in New York and Philadelphia, initial jobless claims and housing starts, among others.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 15
Australia is to produce official data on home loans, a leading indicator of the health of the housing sector. The country is also to publish government data on new vehicle sales, a leading indicator of consumer sentiment.
New Zealand is to publish official data on consumer price inflation, which accounts for the majority of overall inflation.
The U.K. is to publish industry data on house price inflation, an important indicator of demand in the housing sector. Elsewhere in Europe, Switzerland is to release government data on producer price inflation, a leading indicator of consumer inflation.
The Bank of Canada is to publish its business outlook survey, a leading indicator of economic health.
Also Monday, the U.S. is to produce official data on retail sales, the primary indicator of consumer spending, which accounts for the majority of economic activity. In addition, the U.S. is to release data on manufacturing activity in New York state, as well as official data on business inventories.
Tuesday, October 16
The Reserve Bank of Australia is to publish the minutes of its most recent policy meeting. The minutes contain important insights into current and future economic conditions from the bank’s perspective.
The U.K. is to release official data on consumer and producer price inflation and hold an auction of 30-year government bonds.
The euro zone is also to release official data on consumer price inflation. The ZEW Institute is to publish data on German economic sentiment, a leading indicator of economic health, as well as data on economic sentiment in the wider euro area. In addition, Spain and Greece are scheduled to hold auctions of government debt.
Canada is to produce official data on manufacturing sales, a leading indicator of economic health. The country is also to produce official data on foreign securities purchases.
The U.S. is to release government data on consumer price inflation and industrial production. The U.S. is also to produce official data on treasury long-term purchases and the capacity utilization rate.
Wednesday, October 17
Australia is to publish an index of leading economic indicators, designed to predict the future direction of the economy.
The U.K. is to publish a report on the change in the number of people claiming unemployment benefits and the unemployment rate, while the Bank of England is to publish the minutes of its most recent policy setting meeting.
Elsewhere in Europe, the ZEW Institute is to publish a report on Swiss economic expectations, a leading indicator of economic health.
Later Wednesday, the U.S. is to publish government data on building permits, an excellent gauge of future construction activity, as well as data on housing starts, a leading indicator of economic health. The U.S. is also to produce official data on crude oil stockpiles.
Thursday, October 18
Australia is to publish a report on business confidence, an important indicator of economic health.
In the euro zone, Spain and France are scheduled to hold auctions of government debt.
Switzerland is to release official data on the trade balance, the difference in value between imports and exports.
Elsewhere in Europe, the U.K. is to produce official data on retail sales, the primary indicator of consumer spending, which accounts for the majority of economic activity.
Later in the day, Canada is to release government data on wholesale sales, a leading indicator of consumer spending.
The U.S. is to publish weekly government data on initial jobless claims, as well as a report on manufacturing activity in Philadelphia, a leading indicator of economic strength.
Friday, October 19
The euro zone is to publish official data on the current account, which is closely linked to currency demand. Meanwhile, Germany is to release government data on producer price inflation.
Elsewhere in Europe, the U.K. is to produce official data on public sector borrowing.
Canada is to release official data on consumer price inflation, which accounts for the majority of overall inflation.
The U.S. is to round up the week with industry data on existing home sales, a leading indicator of economic health.