Investing.com - The U.S. dollar ended the week almost unchanged against the yen on Friday, while the euro fell to its lowest level against the currency since 2000 as Standard and Poor’s cut credit ratings on nine euro zone countries, including France.
USD/JPY hit 76.65 on Friday, the pair’s lowest since January 5; the pair subsequently consolidated at 76.94 by close of trade on Friday, inching up 0.06% on the week.
The pair is likely to find support at 76.60, the low of January 4 and a six-week low and resistance at 77.03, last Wednesday’s high.
On Friday, S&P announced that it had cut ratings on Italy, Spain, Cyprus and Portugal by two notches and downgraded Austria, Malta, Slovakia and Slovenia by one level. Germany kept its triple-A rating.
Earlier Friday, a closely watched auction of Italian government debt met with lackluster investor demand, one day after an auction of Spanish government debt met with solid investor demand at sharply lower yields.
Meanwhile, talks aimed at negotiating a restructuring of Greece's debts broke down on Friday, amid disagreements over how much money investors will lose by swapping their bonds, raising fears over a possible default.
On Saturday, Japanese Prime Minister Yoshihiko Noda said the credit rating downgrades underlined the importance of shoring up Japan’s public finances to contain the country’s large debt load.
Earlier in the week, the Bank of Japan’s chief economist said that the country’s economy will see flat growth for the time being before resuming a moderate recovery later this year as the euro zone’s debt crisis and an overseas slowdown weigh on exports.
In the U.S., data on Thursday showed that the number of people who filed for unemployment assistance in the U.S. last week unexpectedly rose to 399,000 from 375,000 the previous week.
A separate report showed that U.S. retail sales rose less-than-expected in December.
In the week ahead, investors will be keeping a close eye on developments in the euro zone, amid concerns over the increased risk of sovereign debt contagion, while investors will also be looking ahead to U.S. data on inflation and the housing sector.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, January 16
Japan is to produce government data on core machinery orders, a leading indicator of production.
Meanwhile, markets in the U.S. are to remain closed for a national holiday.
Tuesday, January 17
Japan is to produce data on tertiary industry activity, a key gauge of economic health.
The U.S. is to publish the Empire State Manufacturing index, an important indicator of economic health.
Wednesday, January 18
The U.S. is to release government data on producer price inflation, followed by data on net foreign purchases of long-term securities, which is the balance of domestic and foreign investment.
The country is also to produce data on industrial production and the capacity utilization rate, a key gauge of consumer inflation. The U.S. is also to publish official data on crude oil inventories.
Thursday, January 19
The U.S. is to publish government data on housing starts and building permits, an excellent gauge of future construction activity and official data on consumer price inflation, which accounts for the majority of overall inflation. In addition, the country is to produce official data on initial jobless claims, as well as a report on manufacturing activity in the Philadelphia area.
Friday, January 20
The U.S. is to round up the week with a report by the National Association of Realtors on existing home sales, an important gauge of economic health.
USD/JPY hit 76.65 on Friday, the pair’s lowest since January 5; the pair subsequently consolidated at 76.94 by close of trade on Friday, inching up 0.06% on the week.
The pair is likely to find support at 76.60, the low of January 4 and a six-week low and resistance at 77.03, last Wednesday’s high.
On Friday, S&P announced that it had cut ratings on Italy, Spain, Cyprus and Portugal by two notches and downgraded Austria, Malta, Slovakia and Slovenia by one level. Germany kept its triple-A rating.
Earlier Friday, a closely watched auction of Italian government debt met with lackluster investor demand, one day after an auction of Spanish government debt met with solid investor demand at sharply lower yields.
Meanwhile, talks aimed at negotiating a restructuring of Greece's debts broke down on Friday, amid disagreements over how much money investors will lose by swapping their bonds, raising fears over a possible default.
On Saturday, Japanese Prime Minister Yoshihiko Noda said the credit rating downgrades underlined the importance of shoring up Japan’s public finances to contain the country’s large debt load.
Earlier in the week, the Bank of Japan’s chief economist said that the country’s economy will see flat growth for the time being before resuming a moderate recovery later this year as the euro zone’s debt crisis and an overseas slowdown weigh on exports.
In the U.S., data on Thursday showed that the number of people who filed for unemployment assistance in the U.S. last week unexpectedly rose to 399,000 from 375,000 the previous week.
A separate report showed that U.S. retail sales rose less-than-expected in December.
In the week ahead, investors will be keeping a close eye on developments in the euro zone, amid concerns over the increased risk of sovereign debt contagion, while investors will also be looking ahead to U.S. data on inflation and the housing sector.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, January 16
Japan is to produce government data on core machinery orders, a leading indicator of production.
Meanwhile, markets in the U.S. are to remain closed for a national holiday.
Tuesday, January 17
Japan is to produce data on tertiary industry activity, a key gauge of economic health.
The U.S. is to publish the Empire State Manufacturing index, an important indicator of economic health.
Wednesday, January 18
The U.S. is to release government data on producer price inflation, followed by data on net foreign purchases of long-term securities, which is the balance of domestic and foreign investment.
The country is also to produce data on industrial production and the capacity utilization rate, a key gauge of consumer inflation. The U.S. is also to publish official data on crude oil inventories.
Thursday, January 19
The U.S. is to publish government data on housing starts and building permits, an excellent gauge of future construction activity and official data on consumer price inflation, which accounts for the majority of overall inflation. In addition, the country is to produce official data on initial jobless claims, as well as a report on manufacturing activity in the Philadelphia area.
Friday, January 20
The U.S. is to round up the week with a report by the National Association of Realtors on existing home sales, an important gauge of economic health.