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Forex - Weekly outlook: October 12 - 16

Published 10/11/2015, 06:34 AM
© Reuters.  Dollar falls to multi-week lows after cautious Fed minutes
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Investing.com - The dollar fell against the other major currencies, hitting multi-week lows against the euro and the Swiss franc, after the minutes of the Federal Reserve’s latest meeting indicated that interest rates are likely to remain on hold for longer.

Minutes from the Fed’s September policy meeting, published on Thursday, showed that most policymakers thought an initial rate hike should still come this year and that financial market turmoil had not "materially altered" the outlook for the U.S. economy.

But the minutes also noted that recent global economic and financial developments may have increased the downside risks to the U.S. economy.

The minutes reinforced expectations that U.S. interest rates will remain on hold until well into 2016.

EUR/USD was up 0.74% to 1.1359 in late trade, the highest close since September 18. The pair ended the week with gains of 1.26%.

USD/CHF was down 0.5% at three-week lows of 0.9612 late Friday and ended the week off 1.04%.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, also fell to three-week lows of 94.93, down 0.49%. For the week the index was down 1.14%.

The dollar pushed higher against the yen, with USD/JPY last up 0.24% to 120.20. The yen came under pressure as expectations for further central bank easing bolstered investor demand for riskier assets.

The euro was also higher against the yen, with EUR/JPY climbing 1.0% to 136.58.

The Australian dollar rallied to seven-week highs, with AUD/USD jumping 1.18% to 0.7343. The New Zealand dollar rose to 10-week highs against the greenback, with NZD/USD advancing 0.4% to 0.6693.

The Canadian dollar also rose to 10-week peaks, with USD/CAD down 0.52% to 1.2947.

In the week ahead, investors will be looking to Wednesday’s U.S. data on retail sales and Thursday’s data on consumer prices for fresh indications on the strength of consumer spending.

Elsewhere, Tuesday’s ZEW report on German business sentiment and jobs reports in the U.K. and Australia will be closely watched.

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

Monday, October 12

Markets in Japan will be closed for a national holiday.

Markets in Canada will be closed for the Thanksgiving holiday.

In the U.S., Chicago Fed President Charles Evans is to speak, while Fed Governor Lael Brainard is to speak at another event.

Tuesday, October 13

The Bank of Japan is to publish the minutes of its latest monetary policy meeting, giving investors insight into how officials view the economy and their policy options.

Australia is to publish a report on business confidence.

Switzerland is to release a report on producer price inflation.

The U.K. is to release data on consumer prices.

In the euro zone, the ZEW Institute is to report on German economic sentiment.

Wednesday, October 14

Australia is to release data on consumer sentiment.

China is to release reports on both producer and consumer inflation.

The U.K. is to publish its monthly employment report.

The U.S. is to release data on retail sales and producer prices.

Thursday, October 15

Australia is to produce its latest jobs report.

The U.S. is to release data on consumer prices, jobless claims and manufacturing activity in both the Philadelphia and New York regions.

Friday, October 16

New Zealand is to release data on consumer inflation.

The euro zone is to release revised data on consumer prices.

Canada is to publish data on manufacturing sales and foreign investment.

The U.S. is to round up the week with data on consumer sentiment, and industrial production.

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