Investing.com - The U.S. dollar ended the week higher against the euro and the yen, with the euro falling sharply on Friday amid fresh concerns over the region’s debt crisis, while the yen weakened after the Bank of Japan reiterated its commitment to keep monetary policy loose.
The euro slipped lower against the dollar on Friday, after official data showed that German retail sales fell by 1.6% in January, against expectations for a 0.5% increase, sparking fresh concerns over the outlook for the euro zone’s largest economy.
The euro extended losses after Spain’s government raised its budget deficit target to 5.8% of gross domestic product for 2012, compared to a previous target of 4.4%.
The euro had come under broad selling pressure on Wednesday, after the European Central Bank allotted EUR529.5 billion in loans to 800 lenders in its second long-term refinancing operation, amid concerns that the action was equivalent to quantitative easing.
In contrast, the dollar strengthened broadly after Federal Reserve Chairman Ben Bernanke dampened expectations for a third round of monetary easing in testimony to Congress on Wednesday, after he acknowledged the recent improvement in the labor market and said that higher oil prices could push up inflation.
The remarks came after the U.S. Commerce Department reported that gross domestic product increased at a seasonally adjusted annual rate of 3.0% during the fourth quarter, up from a preliminary estimate of 2.8%.
Other reports last week continued to paint a mixed picture of the U.S. economic recovery. Data on Tuesday showed that U.S. durable goods orders dropped to a three-year low in January.
The Institute for Supply Management said Thursday that U.S. manufacturing activity expanded at a slower rate than expected in February, while official data showed that U.S. initial jobless claims declined modestly in the previous week, holding close to the lowest level since March 2008.
Elsewhere, the yen dropped to a fresh nine-month low against the dollar on Friday, after official data showed that Japanese consumer price inflation declined by an annualized 0.1% in January.
Following the data, Bank of Japan Governor Masaaki Shirakawa reiterated the bank’s commitment to meet an inflation target of 1% by keeping monetary policy loose.
The pound was also sharply lower against the broadly stronger greenback on Friday, after finding support earlier in the week as investor’s trimmed back expectations for more easing measures by the Bank of England.
In the week ahead, investors will be looking ahead to Friday’s data on U.S. non-farm payrolls, to gauge the strength of the country’s economic recovery. Market participants will also be continuing to watch developments in Europe, ahead of interest rate announcements by the ECB and the BoE on Thursday.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 5
Australia is to release official data on company operating profits, an important indicator of economic health. The country is also to release industry data on service sector activity and a report on job advertisements, an important gauge of demand in the labor market.
Switzerland is to release official data on retail sales, the foremost indicator of consumer spending, which accounts for the majority of overall economic activity. The U.K. is to release data on service sector growth, a leading indicator of economic health.
Elsewhere, the euro zone is also to publish official data on retail sales, as well as revised data on service sector growth and a report on investor confidence.
Later Monday, the U.S. is to produce government data on factory orders, while the Institute of Supply Management is to release a report on service sector growth.
Tuesday, March 6
The Reserve Bank of Australia is to announce its benchmark interest rate and publish its rate statement, which contains important insights into current economic conditions from the bank’s perspective. Australia is also to publish a report on the country’s current account.
Japan is to release government data on average cash earnings, which is closely correlated with consumer spending.
The U.K. is to publish industry data on retail sales, an important indicator of consumer spending. Elsewhere, the euro zone is to publish revised data on fourth quarter GDP.
Later in the day, Canada is to publish a report on manufacturing activity, a leading indicator of economic strength.
Wednesday, March 7
Australia is to produce official data on fourth quarter GDP, the broadest measure of economic activity and the primary indicator of the economy's health.
In Europe, the Swiss National Bank is to publish data on foreign currency reserves, which provides investors with insights into the bank’s currency market operations. Elsewhere, Germany is to release official data on factory orders, a leading indicator of production.
The U.S. is to publish a report on ADP non-farm payrolls, which leads government data by two days. The country is also to release revised data on non-farm productivity and labor costs, which are important inflationary indicators, as well as a report on crude oil stockpiles.
Canada is to release official data on building permits, an excellent gauge of future construction activity.
In addition, the Reserve Bank of New Zealand is to announce its benchmark interest rate and hold a press conference to discuss monetary policy.
Thursday, March 8
Japan is to produce final data on fourth quarter GDP, as well as reports on bank lending, the current account, the GDP price index and preliminary data on machine tool orders.
Australia is to release official data on the change in the number of people employed as well as data on the overall unemployment rate, a leading indicator of economic health.
Switzerland is to publish official data on consumer price inflation, which accounts for a majority of overall inflation.
In the euro zone, Germany is to release official data on industrial production, a leading indicator of economic health. In addition, the ECB is to announce its benchmark interest rate; the announcement will be followed by a closely watched press conference where ECB head Mario Draghi will discuss monetary policy.
In the U.K., the Bank of England is also to announce its benchmark interest rate.
Also Thursday, the U.S. is to produce government data on initial jobless claims, a leading indicator of economic health.
Meanwhile, the Bank of Canada is to announce its benchmark interest rate; the bank’s rate statement will provide investors with important insights into current economic conditions from the bank’s perspective.
Canada is also to publish official data on house price inflation and an industry report on housing starts.
Friday, March 9
Australia is to produce official data on the trade balance, the difference in value between imported and exported goods.
In the euro zone, France is to release official data on industrial production, a leading indicator of economic health.
The U.K. is to publish government data on manufacturing and industrial production, as well as reports on producer price inflation input and consumer inflation expectations. Later in the day, the National Institute of Economic and Social Research is to release its monthly GDP estimate.
Elsewhere, Canada is to release official data on the change in the number of people employed, as well as data on the overall unemployment rate, a leading indicator of economic health. In addition Canada is to publish reports on the trade balance and labor productivity, an important inflationary indicator.
The U.S. is to round up the week with government data on non-farm payrolls and the unemployment rate, leading indicators of economic health, in addition to data on the trade balance and average hourly earnings.
The euro slipped lower against the dollar on Friday, after official data showed that German retail sales fell by 1.6% in January, against expectations for a 0.5% increase, sparking fresh concerns over the outlook for the euro zone’s largest economy.
The euro extended losses after Spain’s government raised its budget deficit target to 5.8% of gross domestic product for 2012, compared to a previous target of 4.4%.
The euro had come under broad selling pressure on Wednesday, after the European Central Bank allotted EUR529.5 billion in loans to 800 lenders in its second long-term refinancing operation, amid concerns that the action was equivalent to quantitative easing.
In contrast, the dollar strengthened broadly after Federal Reserve Chairman Ben Bernanke dampened expectations for a third round of monetary easing in testimony to Congress on Wednesday, after he acknowledged the recent improvement in the labor market and said that higher oil prices could push up inflation.
The remarks came after the U.S. Commerce Department reported that gross domestic product increased at a seasonally adjusted annual rate of 3.0% during the fourth quarter, up from a preliminary estimate of 2.8%.
Other reports last week continued to paint a mixed picture of the U.S. economic recovery. Data on Tuesday showed that U.S. durable goods orders dropped to a three-year low in January.
The Institute for Supply Management said Thursday that U.S. manufacturing activity expanded at a slower rate than expected in February, while official data showed that U.S. initial jobless claims declined modestly in the previous week, holding close to the lowest level since March 2008.
Elsewhere, the yen dropped to a fresh nine-month low against the dollar on Friday, after official data showed that Japanese consumer price inflation declined by an annualized 0.1% in January.
Following the data, Bank of Japan Governor Masaaki Shirakawa reiterated the bank’s commitment to meet an inflation target of 1% by keeping monetary policy loose.
The pound was also sharply lower against the broadly stronger greenback on Friday, after finding support earlier in the week as investor’s trimmed back expectations for more easing measures by the Bank of England.
In the week ahead, investors will be looking ahead to Friday’s data on U.S. non-farm payrolls, to gauge the strength of the country’s economic recovery. Market participants will also be continuing to watch developments in Europe, ahead of interest rate announcements by the ECB and the BoE on Thursday.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, March 5
Australia is to release official data on company operating profits, an important indicator of economic health. The country is also to release industry data on service sector activity and a report on job advertisements, an important gauge of demand in the labor market.
Switzerland is to release official data on retail sales, the foremost indicator of consumer spending, which accounts for the majority of overall economic activity. The U.K. is to release data on service sector growth, a leading indicator of economic health.
Elsewhere, the euro zone is also to publish official data on retail sales, as well as revised data on service sector growth and a report on investor confidence.
Later Monday, the U.S. is to produce government data on factory orders, while the Institute of Supply Management is to release a report on service sector growth.
Tuesday, March 6
The Reserve Bank of Australia is to announce its benchmark interest rate and publish its rate statement, which contains important insights into current economic conditions from the bank’s perspective. Australia is also to publish a report on the country’s current account.
Japan is to release government data on average cash earnings, which is closely correlated with consumer spending.
The U.K. is to publish industry data on retail sales, an important indicator of consumer spending. Elsewhere, the euro zone is to publish revised data on fourth quarter GDP.
Later in the day, Canada is to publish a report on manufacturing activity, a leading indicator of economic strength.
Wednesday, March 7
Australia is to produce official data on fourth quarter GDP, the broadest measure of economic activity and the primary indicator of the economy's health.
In Europe, the Swiss National Bank is to publish data on foreign currency reserves, which provides investors with insights into the bank’s currency market operations. Elsewhere, Germany is to release official data on factory orders, a leading indicator of production.
The U.S. is to publish a report on ADP non-farm payrolls, which leads government data by two days. The country is also to release revised data on non-farm productivity and labor costs, which are important inflationary indicators, as well as a report on crude oil stockpiles.
Canada is to release official data on building permits, an excellent gauge of future construction activity.
In addition, the Reserve Bank of New Zealand is to announce its benchmark interest rate and hold a press conference to discuss monetary policy.
Thursday, March 8
Japan is to produce final data on fourth quarter GDP, as well as reports on bank lending, the current account, the GDP price index and preliminary data on machine tool orders.
Australia is to release official data on the change in the number of people employed as well as data on the overall unemployment rate, a leading indicator of economic health.
Switzerland is to publish official data on consumer price inflation, which accounts for a majority of overall inflation.
In the euro zone, Germany is to release official data on industrial production, a leading indicator of economic health. In addition, the ECB is to announce its benchmark interest rate; the announcement will be followed by a closely watched press conference where ECB head Mario Draghi will discuss monetary policy.
In the U.K., the Bank of England is also to announce its benchmark interest rate.
Also Thursday, the U.S. is to produce government data on initial jobless claims, a leading indicator of economic health.
Meanwhile, the Bank of Canada is to announce its benchmark interest rate; the bank’s rate statement will provide investors with important insights into current economic conditions from the bank’s perspective.
Canada is also to publish official data on house price inflation and an industry report on housing starts.
Friday, March 9
Australia is to produce official data on the trade balance, the difference in value between imported and exported goods.
In the euro zone, France is to release official data on industrial production, a leading indicator of economic health.
The U.K. is to publish government data on manufacturing and industrial production, as well as reports on producer price inflation input and consumer inflation expectations. Later in the day, the National Institute of Economic and Social Research is to release its monthly GDP estimate.
Elsewhere, Canada is to release official data on the change in the number of people employed, as well as data on the overall unemployment rate, a leading indicator of economic health. In addition Canada is to publish reports on the trade balance and labor productivity, an important inflationary indicator.
The U.S. is to round up the week with government data on non-farm payrolls and the unemployment rate, leading indicators of economic health, in addition to data on the trade balance and average hourly earnings.