Investing.com - The euro ended the week lower against the U.S. dollar on Friday, but the single currency remained supported by hopes that a deal on a second bailout for Greece is imminent, while the yen tumbled to a six-month low against the dollar.
The euro found support on Friday after German Chancellor Angela Merkel and Greek Prime Minister Lucas Papademos expressed optimism that an agreement would be reached at Monday's meeting of euro zone finance ministers.
However, markets remained wary of pushing the single currency too high after European officials warned that that there was still a long way to go in order for Greece to meet the target for its debt burden which would allow the EUR130 billion bailout to proceed.
Without a bailout, Greece faces the threat of defaulting when a EUR14.5 billion bond redemption comes due on March 20.
Meanwhile, the greenback rallied to a six-month high against the yen on Friday, after the Bank of Japan increased the size of its asset-purchase program to JPY30 trillion and set a 1% goal for inflation in an attempt to boost growth and protect the economy from the effects of the strong yen.
"Japan's economic activity has been more or less flat mainly due to the effects of a slowdown in overseas economies and the appreciation of the yen," the BoJ said.
The greenback was also boosted by a string of robust U.S. economic data. On Thursday, the U.S. Department of Labor said initial jobless claims unexpectedly fell to their lowest level since March 2008 last week, declining to 348,000, confounding expectations for an increase to 364,000.
On Friday, the U.S. Conference Board said that its index of leading economic indicators increased for the fourth consecutive month in January.
In the U.K., an unexpected rise in retail sales for January pushed the pound to a one-week high against the greenback on Friday. Sterling also found support after the Bank of England’s quarterly inflation report revised up the bank’s two-year inflation forecast, dampening expectations for more quantitative easing measures.
But the pound remained under pressure after ratings agency Moody’s put the U.K. triple-A credit rating on negative outlook on Tuesday, citing a weaker outlook for growth and risks from the debt crisis in the euro zone.
In the week ahead, markets will be keenly awaiting the outcome of Monday’s meeting of euro zone finance ministers, while markets in the U.S. will be closed for the Presidents Day holiday.
Also next week, the euro zone is to produce closely watched preliminary data on manufacturing a service sector activity, while the U.S. is to release a flurry of housing sector data.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, February 20
New Zealand is to produce official data on producer price inflation input, a leading indicator of consumer inflation. Japan is to publish a government report on trade balance, the difference in value between imported and exported goods.
Later in the day, the U.K. is to release industry data on house price inflation, a key indicator of the housing industry’s health.
Markets in the U.S. will remain closed for the Presidents Day holiday.
Tuesday, February 21
The Reserve Bank of Australia is to release the minutes of its January policy setting meeting, followed by a speech by RBA Chairman Glenn Stevens. Meanwhile, the Reserve Bank of New Zealand is to publish data on inflation expectations.
In Europe, Switzerland is to produce government data on trade balance while the U.K. is to release official data on public sector net borrowing.
Also Tuesday, Canada is to publish official data on retail sales, the foremost indicator of consumer spending, which accounts for the majority of overall economic activity. The country is also to release an official report on wholesale sales, a leading indicator of consumer spending.
Wednesday, February 22
Australia is to produce leading index reports both by the Conference Board and the Melbourne Institute, as well as official data on wage price inflation, a leading indicator of consumer inflation.
The euro zone is to release preliminary data on manufacturing and service sector activity, while France and Germany are to produce individual reports. The single currency bloc is also to publish official data on industrial new orders, a key gauge of production.
Meanwhile, the BoE is to publish the minutes of its January policy-setting meeting.
Also Wednesday, the U.S. is to release industry data on existing home sales, a leading indicator of demand in the housing market, followed by official data on crude oil stockpiles.
Thursday, February 23
In the euro zone, Germany is to publish an Ifo report on business climate, a key gauge of economic health.
Elsewhere in Europe, the U.K. is to release industry data on mortgage approvals, an important indicator of housing market demand as well as data on industrial order expectations, a key gauge of economic health.
The U.S. is to release government data on unemployment claims, an important signal of overall economic health.
Meanwhile, finance ministers and central bankers are to meet throughout the day for the seventh G20 meeting, in Mexico.
Friday, February 24
RBA Governor Stevens is to testify before the House of Representatives Standing Committee on Economics, in Sydney.
The U.K. is to produce revised data on fourth quarter gross domestic product, the broadest measure of economic activity and the primary gauge of the economy's health. The country is also to release preliminary data on business investment, a leading indicator of economic health.
Meanwhile, Bank of Canada Governor Mark Carney is due to speak at the U.S. Monetary Policy Forum, in New York.
The U.S. is to round up the week with a revised report by the University of Michigan on consumer sentiment, followed by government data on new home sales, an important signal of economic health.
The euro found support on Friday after German Chancellor Angela Merkel and Greek Prime Minister Lucas Papademos expressed optimism that an agreement would be reached at Monday's meeting of euro zone finance ministers.
However, markets remained wary of pushing the single currency too high after European officials warned that that there was still a long way to go in order for Greece to meet the target for its debt burden which would allow the EUR130 billion bailout to proceed.
Without a bailout, Greece faces the threat of defaulting when a EUR14.5 billion bond redemption comes due on March 20.
Meanwhile, the greenback rallied to a six-month high against the yen on Friday, after the Bank of Japan increased the size of its asset-purchase program to JPY30 trillion and set a 1% goal for inflation in an attempt to boost growth and protect the economy from the effects of the strong yen.
"Japan's economic activity has been more or less flat mainly due to the effects of a slowdown in overseas economies and the appreciation of the yen," the BoJ said.
The greenback was also boosted by a string of robust U.S. economic data. On Thursday, the U.S. Department of Labor said initial jobless claims unexpectedly fell to their lowest level since March 2008 last week, declining to 348,000, confounding expectations for an increase to 364,000.
On Friday, the U.S. Conference Board said that its index of leading economic indicators increased for the fourth consecutive month in January.
In the U.K., an unexpected rise in retail sales for January pushed the pound to a one-week high against the greenback on Friday. Sterling also found support after the Bank of England’s quarterly inflation report revised up the bank’s two-year inflation forecast, dampening expectations for more quantitative easing measures.
But the pound remained under pressure after ratings agency Moody’s put the U.K. triple-A credit rating on negative outlook on Tuesday, citing a weaker outlook for growth and risks from the debt crisis in the euro zone.
In the week ahead, markets will be keenly awaiting the outcome of Monday’s meeting of euro zone finance ministers, while markets in the U.S. will be closed for the Presidents Day holiday.
Also next week, the euro zone is to produce closely watched preliminary data on manufacturing a service sector activity, while the U.S. is to release a flurry of housing sector data.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, February 20
New Zealand is to produce official data on producer price inflation input, a leading indicator of consumer inflation. Japan is to publish a government report on trade balance, the difference in value between imported and exported goods.
Later in the day, the U.K. is to release industry data on house price inflation, a key indicator of the housing industry’s health.
Markets in the U.S. will remain closed for the Presidents Day holiday.
Tuesday, February 21
The Reserve Bank of Australia is to release the minutes of its January policy setting meeting, followed by a speech by RBA Chairman Glenn Stevens. Meanwhile, the Reserve Bank of New Zealand is to publish data on inflation expectations.
In Europe, Switzerland is to produce government data on trade balance while the U.K. is to release official data on public sector net borrowing.
Also Tuesday, Canada is to publish official data on retail sales, the foremost indicator of consumer spending, which accounts for the majority of overall economic activity. The country is also to release an official report on wholesale sales, a leading indicator of consumer spending.
Wednesday, February 22
Australia is to produce leading index reports both by the Conference Board and the Melbourne Institute, as well as official data on wage price inflation, a leading indicator of consumer inflation.
The euro zone is to release preliminary data on manufacturing and service sector activity, while France and Germany are to produce individual reports. The single currency bloc is also to publish official data on industrial new orders, a key gauge of production.
Meanwhile, the BoE is to publish the minutes of its January policy-setting meeting.
Also Wednesday, the U.S. is to release industry data on existing home sales, a leading indicator of demand in the housing market, followed by official data on crude oil stockpiles.
Thursday, February 23
In the euro zone, Germany is to publish an Ifo report on business climate, a key gauge of economic health.
Elsewhere in Europe, the U.K. is to release industry data on mortgage approvals, an important indicator of housing market demand as well as data on industrial order expectations, a key gauge of economic health.
The U.S. is to release government data on unemployment claims, an important signal of overall economic health.
Meanwhile, finance ministers and central bankers are to meet throughout the day for the seventh G20 meeting, in Mexico.
Friday, February 24
RBA Governor Stevens is to testify before the House of Representatives Standing Committee on Economics, in Sydney.
The U.K. is to produce revised data on fourth quarter gross domestic product, the broadest measure of economic activity and the primary gauge of the economy's health. The country is also to release preliminary data on business investment, a leading indicator of economic health.
Meanwhile, Bank of Canada Governor Mark Carney is due to speak at the U.S. Monetary Policy Forum, in New York.
The U.S. is to round up the week with a revised report by the University of Michigan on consumer sentiment, followed by government data on new home sales, an important signal of economic health.