Investing.com - The U.S. dollar rallied against the other major currencies on Friday, hitting a six-month high against the yen and a one-month high against the euro on the back of better-than-forecast U.S. employment data and uncertainty ahead of the upcoming U.S. presidential elections.
The U.S. Department of Labor said the U.S. economy added 171,000 jobs in October, beating forecasts for an increase of 125,000. The unemployment rate ticked up to 7.9% from 7.8% in September as more people re-entered the labor force.
The stronger-than- expected data saw investor’s trim back expectations for another round of quantitative easing by the Federal Reserve, bolstering demand for the greenback.
The dollar also found support amid uncertainty over the outcome of Tuesday’s U.S. presidential elections, with opinion polls indicating a dead heat between President Barack Obama and Republican challenger Mitt Romney.
Investors are concerned over the U.S. fiscal cliff, approximately USD600 billion in tax hikes and spending cuts due to come into effect on January 1, which could threaten U.S. and global growth.
Against the yen, the dollar hit its highest level since April 27, before easing back slightly, with USD/JPY settling at 80.45, up 0.44% for the day. Meanwhile, EUR/USD settled at 1.2835 by close of trade on Friday, down 0.82% for the day.
The dollar fell sharply against the yen on Tuesday, after easing steps announced by the Bank of Japan initially disappointed market expectations for more aggressive measures.
The BoJ increased the size of its asset purchase program by JPY11 trillion amid growing concerns over the deteriorating economic outlook and growing political pressure to step up measures to combat deflation.
Meanwhile, the euro remained under pressure amid ongoing uncertainty over when Spain may request a bailout and whether Greece can implement austerity measures in order to secure the next tranche of its bailout funding.
In the coming week, investors will be anticipating the outcome of Tuesday’s U.S. presidential elections and looking ahead to policy meetings by the Bank of England and the European Central Bank on Thursday.
In addition, market participants will be awaiting any further developments in the handling of the debt crisis in the euro zone.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, November 4
Australia is to publish official data on retail sales, the leading indicator of consumer spending, which accounts for the majority of overall economic activity. The country is also to publish official data on the trade balance, the difference in value between imports and exports.
The euro zone is to produce a report on investor confidence, an important indicator of economic health. Elsewhere, Spain is to publish official data on employment change, a leading indicator of economic health, as well as data on service sector activity.
The U.K. is to release data on service sector activity, a leading indicator of economic health.
Canada is to publish government data on building permits, an accurate indicator of future construction activity.
In the U.S., the Institute of Supply Management is to publish data on service sector activity.
Tuesday, November 6
The Reserve Bank of Australia is to announce its benchmark interest rate. The rate announcement is to be accompanied by the bank’s rate statement, which contains important insights into current and future economic conditions from the bank’s perspective.
Australia is also to release official data on house price inflation, a leading indicator of demand in the housing sector.
Switzerland is to publish official data on consumer climate, a leading indicator of consumer spending. Elsewhere in Europe, the U.K. is to release official data on manufacturing and industrial production, leading indicators of economic health.
In the euro zone, Germany is to produce official data on factory orders, a leading indicator of production.
Canada is to publish the Ivey PMI, a leading indicator of economic health.
In the U.S, voting in the U.S. presidential elections is to take place.
Wednesday, November 7
The Swiss National Bank is to publish data on foreign currency reserves, giving an insight into the bank’s currency market operations. Switzerland is also to release official data on consumer price inflation, which accounts for the majority of overall inflation.
The euro zone is to produce official data on retail sales, while Germany is to produce official data on industrial production, a leading indicator of economic health.
The U.S. is to publish government data on crude oil stockpiles.
Later Wednesday, New Zealand is to publish official data on employment change and the unemployment rate, a leading indicator of economic strength.
Thursday, November 8
Japan is to release official data on core machinery orders, a leading indicator of production, as well as data on the current account.
Elsewhere, Australia is to publish official data on employment change and the unemployment rate, a leading indicator of economic strength.
The U.K. is to publish official data on the trade balance, while the Bank of England is to announce its benchmark interest rate.
In the euro zone, the eurogroup of finance ministers are to hold talks in Brussels to discuss financial issues in the bloc. In addition, the European Central Bank is to announce its benchmark interest rate. The announcement is to be followed by a press conference with ECB President Mario Draghi to discuss the monetary policy decision.
Canada is to produce government data on the trade balance, as well as data on house price inflation. Later in the day, Bank of Canada Governor Mark Carney is to speak; his comments will be closely watched for any indications on the future possible direction of monetary policy.
Also Thursday, the U.S. is to publish official data on the trade balance as well as the weekly government report on initial jobless claims.
Friday, November 9
The RBA is to publish its monetary policy statement, which gives investors an insight into the bank’s view on the outlook for growth and inflation.
Elsewhere, China is to publish a flurry of economic data, with reports on producer price inflation, retail sales and industrial production.
In the euro zone, France and Italy are to release official data on industrial production.
The U.S. is to round up the week with preliminary data from the University of Michigan on consumer sentiment, a leading indicator of economic health.
The U.S. Department of Labor said the U.S. economy added 171,000 jobs in October, beating forecasts for an increase of 125,000. The unemployment rate ticked up to 7.9% from 7.8% in September as more people re-entered the labor force.
The stronger-than- expected data saw investor’s trim back expectations for another round of quantitative easing by the Federal Reserve, bolstering demand for the greenback.
The dollar also found support amid uncertainty over the outcome of Tuesday’s U.S. presidential elections, with opinion polls indicating a dead heat between President Barack Obama and Republican challenger Mitt Romney.
Investors are concerned over the U.S. fiscal cliff, approximately USD600 billion in tax hikes and spending cuts due to come into effect on January 1, which could threaten U.S. and global growth.
Against the yen, the dollar hit its highest level since April 27, before easing back slightly, with USD/JPY settling at 80.45, up 0.44% for the day. Meanwhile, EUR/USD settled at 1.2835 by close of trade on Friday, down 0.82% for the day.
The dollar fell sharply against the yen on Tuesday, after easing steps announced by the Bank of Japan initially disappointed market expectations for more aggressive measures.
The BoJ increased the size of its asset purchase program by JPY11 trillion amid growing concerns over the deteriorating economic outlook and growing political pressure to step up measures to combat deflation.
Meanwhile, the euro remained under pressure amid ongoing uncertainty over when Spain may request a bailout and whether Greece can implement austerity measures in order to secure the next tranche of its bailout funding.
In the coming week, investors will be anticipating the outcome of Tuesday’s U.S. presidential elections and looking ahead to policy meetings by the Bank of England and the European Central Bank on Thursday.
In addition, market participants will be awaiting any further developments in the handling of the debt crisis in the euro zone.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, November 4
Australia is to publish official data on retail sales, the leading indicator of consumer spending, which accounts for the majority of overall economic activity. The country is also to publish official data on the trade balance, the difference in value between imports and exports.
The euro zone is to produce a report on investor confidence, an important indicator of economic health. Elsewhere, Spain is to publish official data on employment change, a leading indicator of economic health, as well as data on service sector activity.
The U.K. is to release data on service sector activity, a leading indicator of economic health.
Canada is to publish government data on building permits, an accurate indicator of future construction activity.
In the U.S., the Institute of Supply Management is to publish data on service sector activity.
Tuesday, November 6
The Reserve Bank of Australia is to announce its benchmark interest rate. The rate announcement is to be accompanied by the bank’s rate statement, which contains important insights into current and future economic conditions from the bank’s perspective.
Australia is also to release official data on house price inflation, a leading indicator of demand in the housing sector.
Switzerland is to publish official data on consumer climate, a leading indicator of consumer spending. Elsewhere in Europe, the U.K. is to release official data on manufacturing and industrial production, leading indicators of economic health.
In the euro zone, Germany is to produce official data on factory orders, a leading indicator of production.
Canada is to publish the Ivey PMI, a leading indicator of economic health.
In the U.S, voting in the U.S. presidential elections is to take place.
Wednesday, November 7
The Swiss National Bank is to publish data on foreign currency reserves, giving an insight into the bank’s currency market operations. Switzerland is also to release official data on consumer price inflation, which accounts for the majority of overall inflation.
The euro zone is to produce official data on retail sales, while Germany is to produce official data on industrial production, a leading indicator of economic health.
The U.S. is to publish government data on crude oil stockpiles.
Later Wednesday, New Zealand is to publish official data on employment change and the unemployment rate, a leading indicator of economic strength.
Thursday, November 8
Japan is to release official data on core machinery orders, a leading indicator of production, as well as data on the current account.
Elsewhere, Australia is to publish official data on employment change and the unemployment rate, a leading indicator of economic strength.
The U.K. is to publish official data on the trade balance, while the Bank of England is to announce its benchmark interest rate.
In the euro zone, the eurogroup of finance ministers are to hold talks in Brussels to discuss financial issues in the bloc. In addition, the European Central Bank is to announce its benchmark interest rate. The announcement is to be followed by a press conference with ECB President Mario Draghi to discuss the monetary policy decision.
Canada is to produce government data on the trade balance, as well as data on house price inflation. Later in the day, Bank of Canada Governor Mark Carney is to speak; his comments will be closely watched for any indications on the future possible direction of monetary policy.
Also Thursday, the U.S. is to publish official data on the trade balance as well as the weekly government report on initial jobless claims.
Friday, November 9
The RBA is to publish its monetary policy statement, which gives investors an insight into the bank’s view on the outlook for growth and inflation.
Elsewhere, China is to publish a flurry of economic data, with reports on producer price inflation, retail sales and industrial production.
In the euro zone, France and Italy are to release official data on industrial production.
The U.S. is to round up the week with preliminary data from the University of Michigan on consumer sentiment, a leading indicator of economic health.