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Forex - Weekly outlook: December 6-10

Published 12/05/2010, 04:38 AM
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Investing.com – Last week saw the U.S. dollar fall sharply across the board on Friday, after a weaker-than-expected U.S. jobs report showed that unemployment remained close to a 26-year high, stoking fears that the U.S. economic recovery was faltering.

Labor Department data showed U.S. non-farm payrolls rose 39,000 last month, much weaker than expectations for 140,000 new jobs. The unemployment rate also increased to 9.8%.

Meanwhile, the euro closed higher against the dollar for the first week in month after the European Central Bank intervened to stem the spread of the sovereign debt crisis which threatened to engulf the euro zone.

The single currency reversed an early week decline after the ECB President, Jean-Claude Trichet, extended special liquidity measures and as the bank purchased bonds to calm market fears over sovereign debt default.

The move saw the euro rally, erasing losses accumulated earlier in the week, while the pound and the Australian dollar, perceived as some of the riskier major currencies, also rallied; they extended their gains on the back of the weak U.S. data.

Next week, the U.S. is to release key weekly data on initial jobless claims, as well as a report on the country’s trade balance and preliminary data on consumer sentiment. Meanwhile, Federal Reserve Chairman, Ben Bernanke, is to appear in a televised interview.

In the euro zone, Germany is to publish data on industrial production and factory orders. In the U.K., the Bank of England is to announce its benchmark interest rate. The country is also due to release data on manufacturing production, house prices and inflation.

In addition, the central banks of Canada, Australian and New Zealand are to announce their respective benchmark interest rates.

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

Monday, December 6


In the U.S., Federal Reserve Chairman, Ben Bernanke is due to speak about monetary policy in an interview to be aired on CBS. The interview was given a week earlier.

Canada is to publish official data on the number of building permits issued in the previous month, a leading indicator of growth in the construction sector. The country is also to release data on manufacturing activity.

Meanwhile, Australia is to publish data on the change in the number of jobs advertised, an important indicator of economic health. Also Monday, the country is to publish an inflation gauge and a construction index.

In addition, research group, Sentix is to publish data on investor confidence in the euro zone.

Tuesday, December 7


The Reserve Bank of Australia is to announce its benchmark interest rate. The announcement will be followed up with the closely watched rate statement, which discusses the economic outlook and offers clues on the outcome of future rate decisions. Later in the day, New Zealand is to publish official data on manufacturing sales.

The U.K. is to publish official data on manufacturing and industrial production, as well as industry data on retail sales. Later in the day, the National Institute of Economic and Social Research is to publish an estimate of monthly gross domestic product, in an effort to predict the quarterly government data.

Japan is to publish official data on core machinery orders, a leading indicator of production. The country is also to release data on bank lending, the national current account and money stock and publish an index of leading economic indicators.

The Bank of Canada is also to announce it benchmark interest rate and publish its rate statement, which offers important insights into the economic outlook.

In the euro zone, Germany is to publish official data on factory orders, a leading indicator of production. Meanwhile, Switzerland is to publish official data on the country’s unemployment rate.

Also Tuesday, the U.S. is to publish data on economic optimism and consumer credit.

Wednesday, December 8


Australia is to release official data on home loans, a leading indicator of demand in the housing market. Later in the day, the Reserve Bank of New Zealand is to announce it benchmark interest rate; the announcement will be followed up with the closely watched rate statement and monetary policy statement, which provides a valuable insight into the bank's view of economic conditions and inflation.

In the euro zone, Germany and France are to publish official data on their trade balances, the difference in value between imports and exports over the month. Germany is also to publish data on industrial production, a leading indicator of economic health.

The U.K. is to publish industry data on industrial order expectations, a important indicator of economic health as well as an industry report on inflation by the British Retail Consortium. The U.S. is to publish official data on crude oil inventories.

Meanwhile, Canada is to publish official data on housing starts, a leading indicator of economic health while Japan is to publish revised data on third quarter GDP, the leading indicator of economic growth.

Thursday, December 9

Australia is to release official government data on employment change, as well as the country's unemployment rate, an important signal of overall economic health.

In the euro zone, France is to publish final data on non-farm payrolls, while Germany is to release a final report on consumer price inflation. Later in the day, the European Central Bank is to publish its monthly bulletin, which provides detailed analysis of current and future economic conditions from the bank's viewpoint.

Meanwhile, the U.K. is to release official data on its trade balance, while the Bank of England is to announce its benchmark interest rate. The BoE will also release its Monetary Policy Committee rate statement, which contains the outcome of their vote on interest rates and other policy measures.

Elsewhere, the U.S. is to release key weekly data on initial jobless claims, a leading indicator of economic health, as well as reports on wholesale inventories and natural gas storage.

Also Thursday, Canada is to release key data on house prices, while Japan is to produce preliminary data on machine tool orders, as well as a report on manufacturing conditions, a leading indicator of manufacturing production.

Friday, December 10


The U.S. is to round up the week with official data on its trade balance, federal budget balance and import prices. The country is also set to publish preliminary data from the University of Michigan on consumer sentiment and inflation expectations.

In the euro zone, France and Italy are to publish data on industrial production while Germany is to release a report on wholesale prices, a leading indicator of consumer inflation.

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