Forex - Weekly outlook: November 22-26

Published 11/21/2010, 04:28 AM
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Investing.com – Last week saw the euro rise against the U.S. dollar for three straight days, trimming earlier losses, as European Union officials appeared to make headway in constructing an aid package for Ireland’s ailing banking sector.

However as fears continued to linger over the risk of contagion to other vulnerable euro zone nations, such as Spain and Portugal, further gains for the single currency could be limited.

The pound ended the week down against the dollar as investors remained concerned over the exposure of U.K. banks to Irish debt.

Meanwhile, Federal Reserve Chairman Ben Bernanke on Friday defended the U.S. central bank’s quantitative-easing program against criticism that it was intended to devalue the dollar, arguing that China and other emerging economies were hampering the global economic recovery by preventing their currencies from strengthening as their economies expanded.

Elsewhere, the commodity-linked Australian and New Zealand dollars were hit after China announced a hike in bank-reserve requirements as Beijing continued efforts to curb rapid inflation.

In the week ahead, the U.S. is due to release a slew of data in a week cut short by the Thanksgiving holiday on Thursday, including revised figures on gross domestic product for the third quarter, durable goods orders, and personal income. The country is also to release its weekly report on jobless claims, while the Fed is to release the minutes of its most recent monetary policy meeting.

The euro zone is to publish key data on German business climate while attention is likely to remain focused on developments in Ireland.

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

Monday, November 22

The euro zone is to begin the week with a report on consumer confidence, a leading indicator of consumer spending. Also Monday, European Central Bank President, Jean-Claude Trichet is to speak in the European Parliament. His comments will be closely watched for clues to the future direction of monetary policy.

Tuesday, November 23

New Zealand is to publish quarterly data on inflation expectations, while later Tuesday Australia is to publish an index of leading economic indicators, designed to predict the future direction of the economy.

In the euro zone, research group Gfk is to publish data on German consumer climate, a leading indicator of consumer spending. Meanwhile, Germany, France and the wider euro region are each to publish preliminary data on their manufacturing and service sectors. Germany is also to publish revised third quarter GDP data, the leading indicator of economic growth..

The U.K. is to publish industry data on mortgage approvals while markets in Japan are to remain closed in observance of the Labor Thanksgiving holiday. However the Governor of the Bank of Japan, Masaaki Shirakawa is to speak at a public engagement. In addition, the Chairman of the Swiss National Bank, Philipp Hildebrand is due to make a speech.

Later in the day, Canada is to publish official data on consumer price inflation as well as data on retail sales, a leading indicator of consumer spending, which accounts for the majority of overall economic activity.

The U.S. is to publish revised figures on third quarter GDP. The country is also to publish industry data on existing home sales while the Federal Reserve Bank of Richmond is to publish its manufacturing index. Later in the day, the Fed is to publish the minutes of its November monetary policy meeting, providing an in-depth insight into economic and financial conditions in the U.S.

Wednesday, November 24


Australia is to publish official data on the value of completed construction projects which gives an insight into the GDP data scheduled to be released the following week.

In the euro zone, Germany is to publish its Ifo index of business climate, a leading indicator of economic health while later in the day the euro zone is to publish data on industrial new orders, a leading indicator of production.

The U.K. is to publish revised data on third quarter GDP while Japan is to publish its trade balance, the difference in value between imports and exports as well as official data on its corporate services price index, a leading indicator of consumer inflation.

The U.S. is to release a slew of data, with official data on initial jobless claims, a leading indicator of economic health as well as government data on personal spending, durable goods orders and new home sales. The country is also to publish revised data on consumer sentiment and inflation expectations as well as reports on crude oil and natural gas inventories.

Thursday, November 25

Australia is to release key data on private capital expenditure, a leading indicator of economic health. Later in the day, Reserve Bank of Australia Governor Glenn Stevens is to testify before the House of Representatives Standing Committee on Economics; his comments will be closely watched for any clues to the future direction of monetary policy.

The U.K. is to publish industry data on retail sales, while Bank of England Governor Mervyn King and several BoE Monetary Policy Committee members are due to testify on inflation and the economic outlook before Parliament's Treasury Committee.

Meanwhile, Switzerland is to publish official data on the country’s employment level, while Japan is to release key data on consumer price inflation for both Japan and the Tokyo area. 

Elsewhere, markets in the U.S. will remain closed in observance of Thanksgiving Day. 

Friday, November 26

In the euro zone, Germany is to publish preliminary data on consumer price inflation as well as data on import prices, while France is to release consumer spending data. Later in the day, the ECB is to release data on private borrowing and M3 money supply, an important inflationary indicator.

Meanwhile, the KOF Economic Research Agency is to publish its economic barometer for Switzerland, designed to predict the direction of the economy over the following six months.

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