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Forex - Weekly Outlook: August 16-20

Published 08/15/2010, 06:00 AM
Investing.com – The week beginning August 16 comes after a week which saw the U.S. dollar rally against almost all of the other major currencies amid fears over a slowdown in the rate of global economic growth.

The dollar's gains came amid a flight from risk after the U.S. Federal Reserve said on Tuesday that the U.S. economic recovery was "more modest" than it had hoped.

The bank unveiled plans to boost the flagging U.S. economy by reinvesting funds from maturing mortgage bonds into government debt.

The U.S. dollar went on to close the week at a 3-week high against the euro after an undersubscribed Italian debt auction on Friday outweighed better-than-expected German and euro-zone data on gross domestic product.

Meanwhile, the dollar soared to a 2-week high against sterling after the Bank of England cut its outlook for second-half growth.

But the dollar plunged to a 15-year low against the yen, sparking concern in Japan that the strong yen would drag on the country's largely export-driven economy.

In the week ahead, attention is likely to focus on Thursday's U.S. initial jobless claims as well as U.S. data on building permits, manufacturing and inflation.

Elsewhere, Japan is to release GDP data while the euro zone is to release key data on economic sentiment and inflation while Britain is to produce key data on retail sales.

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

Monday, August 16


Japan will produce preliminary GDP data, the leading indicator of economic growth. The country will also produce data on business activity, a leading indicator of economic health.

The U.S. is to produce a report on the balance of foreign and domestic investment as well as data on manufacturing activity in New York State. The country is also to produce important home sales data.

The euro zone is to produce a report on consumer price inflation, a leading indicator of economic growth.

Australia is to produce data on new vehicle sales, a leading indicator of consumer confidence.

Tuesday, August 17

The U.S. is to produce key data on producer price inflation, a leading indicator of economic growth. The country is also to produce data on building permits and housing starts, two leading indicators of growth in the construction sector.

Both Germany and the euro zone are to release key data on economic sentiment, a valuable indicator of consumer spending. The European Central Bank is to publish data on the regions current account.

The U.K. is to release key data on both consumer and retail price inflation,  leading indicators of economic growth.

Meanwhile, the Reserve Bank of Australia is to publish the minutes of its most recent meeting of the banks monetary policy committee. The minutes provide an in-depth insight into the economic conditions that influenced the banks decision on where to set interest rates.

The banks governor Glenn Stevens is to speak following the release of the data, his comments will be will be closely watched for any clues to the future direction of monetary policy.

Wednesday, August 18

The Bank of England is to publish the minutes of its most recent meeting of the banks monetary policy committee. The data contains important insights into the banks outlook on economic conditions.

Meanwhile, Australia is to publish its index of leading economic indicators, designed to predict the future direction of the economy. The country will also publish data on wage changes, an important inflationary indicator.

New Zealand is to produce data on producer price inflation, a leading indicator of economic growth.

Thursday, August 19

The U.S. is to release key weekly data on initial jobless claims, a leading indicator of economic health. The country is also to produce key data on manufacturing activity in Philadelphia.

Britain is to release key data on retail sales, a leading indicator of consumer spending as well as industry data on manufacturing activity. The Bank of England meanwhile, is to publish a report on mortgage approvals and public sector borrowing.

In the euro zone, Germany is to produce data on producer price inflation, a leading indicator of economic growth.

Switzerland is to publish a report on its trade balance, the difference in value between imported and exported goods and services. The country is also to produce a report on economic sentiment.

Also Thursday, Canada is to publish its index of leading economic indicators, designed to predict the future direction of the economy. The country will also produce data on wholesale sales, a leading indicator of consumer spending.

Friday, August 20

Canada is to produce key data on consumer price inflation, a leading indicator of economic growth. Meanwhile, New Zealand will round up the week with important data on credit card spending, a leading indicator of consumer spending.


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