Investing.com – The euro pared gains against the U.S. dollar on Friday, easing off a seven-week high, as the relief rally which followed an agreement by European leaders on a package of measures to contain the debt crisis in the euro zone faded.
The euro eased after ratings agency Fitch said Friday that writedowns on Greek debt would indicate a default and after Italy’s borrowing costs rose to a euro lifetime high, following an auction of government debt.
The single currency had rallied on Thursday, after European leaders reached an agreement on a package of anti-crisis measures; including an agreement with banks to take a 50% loss on the face value of their Greek debt, enhancing the powers of the region’s bailout fund and recapitalizing European lenders.
Risk appetite was also boosted after official data showed that U.S. gross domestic product rose by 2.5% in the third quarter, the fastest rate of increase since the third quarter of 2010.
The reading nearly doubled growth of 1.3% recorded in the preceding quarter. Analysts had expected U.S. gross domestic product to rise 2.4% in the third quarter.
The greenback came under heavy selling pressure, falling to a fresh record against the yen, even after the Bank of Japan expanded its credit and asset-purchase programs to a total of JPY55 trillion in an attempt to weaken the yen.
The yen’s gains saw Japanese Finance Minister Jun Azumi reiterate warnings that his country would take decisive action against excessive moves in the currency.
Elsewhere, the Australian dollar pared gains against the greenback on Friday, pulling back from an almost two-month high, amid speculation over rate cuts by the country’s central bank this week, while the New Zealand dollar also retreated from Thursday’s five-week high.
Meanwhile, the Canadian dollar climbed above parity against the greenback for the first time in over a month last week but gains were capped after the Bank of Canada cut its outlook for growth.
On Wednesday, the BoC cut its 2011 fourth-quarter annualized growth forecast to 0.8% from its July forecast of 2.9% and revised down its estimate of the first quarter of next year to 1.9% from 2.9%.
In the week ahead, investors will be focusing on the Federal Reserve’s policy meeting on Wednesday and Friday’s U.S. nonfarm payrolls data. In the euro zone Mario Draghi is to take over from outgoing European Central Bank President Jean-Claude Trichet.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 31
New Zealand is to publish official data on building consents, a leading indicator of future construction activity. Later in the day, the country is also to produce government data on labor costs, a leading indicator of consumer inflation. Australian is to release official data on private sector credit as well as a report on inflation expectations. Elsewhere, Japan is to release official data on manufacturing activity and housing starts.
In the U.K., the Bank of England is to publish data on net lending to individuals, which is closely linked to consumer spending. The bank is also to publish data on M4 money supply and mortgage approvals.
The euro zone is to release preliminary data on consumer price inflation, which accounts for a majority of overall inflation. The euro zone is also to produce data on the unemployment rate, an important indicator of economic health.
Later Monday, Canada is to produce its monthly report on gross domestic product, the broadest measure of economic activity and the primary gauge of the economy's health. The country is also to publish official data on factory gate inflation and raw material inflation.
Finally, the U.S is to produce a report on manufacturing activity in the Chicago area, an important indicator of economic health.
Tuesday, November 1
The BoJ is to publish the minutes of its October policy setting meeting. The minutes give a detailed insight into current economic conditions from the bank’s point of view. Japan is also to produce official data on average cash earnings. Later in the day, BOJ Governor Masaaki Shirakawa is to speak; his comments will be closely watched for any clues to the future direction of monetary policy.
Australia is to publish official data on house price inflation, a leading indicator of the housing industry's health, as well as a report on commodity prices. Meanwhile, the Reserve Bank of Australia is to announce its benchmark interest rate.
Switzerland is to publish government data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity. The country is also to release data on manufacturing activity, a leading indicator of economic health.
Elsewhere, the U.K. is to release preliminary data on GDP, the broadest measure of economic activity and the primary gauge of the economy's health. The country is also to publish an industry report on house price inflation, as well as data on manufacturing activity.
Also Tuesday, the Institute of Supply Management is to produce a report on U.S. manufacturing activity, a leading indicator of economic health.
Wednesday, November 2
Australia is to publish official data on building approvals, an important indicator of future construction activity. Later in the day, New Zealand is to produce official data on employment change and the unemployment rate, a leading indicator of economic health.
In the euro zone, Germany is to produce official data on unemployment change. Meanwhile, the U.K. is to publish a report on construction activity, a leading indicator of economic health.
Later Wednesday, the U.S. is to release private sector data on non-farm payrolls that leads government data by two days as well as a government report on crude oil stockpiles. In addition, the Federal Reserve is to announce its benchmark interest rate. The bank’s post-policy meeting press conference will be closely watched for indications to the future possible direction of monetary policy.
Thursday, November 3
Leaders from the G-20 group of industrialized nations are to hold talks to discuss a range of global economic topics, including the financial crisis in the euro zone, in Cannes.
Markets in Japan are to remain closed for a national holiday. Meanwhile, Australia is to publish a report on service sector activity, as well as official data on retail sales.
In the euro zone, the ECB is to announce its benchmark interest rate; the announcement will be followed by the bank’s press conference to discuss monetary policy. Also Thursday, the U.K. is to publish data on service sector activity, a leading indicator of economic health.
Later in the day, the U.S. is to produce its weekly report on initial jobless claims as well as government data on factory orders. The U.S. is also to publish preliminary data on nonfarm productivity and labor costs, important inflationary indicators. In addition the ISM is to release a report on service sector activity, a leading indicator of economic health.
Friday, November 4
The RBA is to release its monetary policy statement, which contains important insights into current economic conditions from the bank’s perspective.
In the euro zone, Germany is to publish official data on factory orders, a leading indicator of economic health. The region is also to publish revised data on service sector growth as well as a report on producer price inflation.
Later in the day, Canada is to produce official data on employment change and the unemployment rate, a leading indicator of economic strength. The country is also to produce government data on building permits and a report on manufacturing activity.
The U.S. is to round up the week with its closely watched government report on nonfarm payrolls, in addition to official data on the unemployment rate and average hourly earnings.
Meanwhile, G-20 leaders are to meet for a second day in Cannes.
The euro eased after ratings agency Fitch said Friday that writedowns on Greek debt would indicate a default and after Italy’s borrowing costs rose to a euro lifetime high, following an auction of government debt.
The single currency had rallied on Thursday, after European leaders reached an agreement on a package of anti-crisis measures; including an agreement with banks to take a 50% loss on the face value of their Greek debt, enhancing the powers of the region’s bailout fund and recapitalizing European lenders.
Risk appetite was also boosted after official data showed that U.S. gross domestic product rose by 2.5% in the third quarter, the fastest rate of increase since the third quarter of 2010.
The reading nearly doubled growth of 1.3% recorded in the preceding quarter. Analysts had expected U.S. gross domestic product to rise 2.4% in the third quarter.
The greenback came under heavy selling pressure, falling to a fresh record against the yen, even after the Bank of Japan expanded its credit and asset-purchase programs to a total of JPY55 trillion in an attempt to weaken the yen.
The yen’s gains saw Japanese Finance Minister Jun Azumi reiterate warnings that his country would take decisive action against excessive moves in the currency.
Elsewhere, the Australian dollar pared gains against the greenback on Friday, pulling back from an almost two-month high, amid speculation over rate cuts by the country’s central bank this week, while the New Zealand dollar also retreated from Thursday’s five-week high.
Meanwhile, the Canadian dollar climbed above parity against the greenback for the first time in over a month last week but gains were capped after the Bank of Canada cut its outlook for growth.
On Wednesday, the BoC cut its 2011 fourth-quarter annualized growth forecast to 0.8% from its July forecast of 2.9% and revised down its estimate of the first quarter of next year to 1.9% from 2.9%.
In the week ahead, investors will be focusing on the Federal Reserve’s policy meeting on Wednesday and Friday’s U.S. nonfarm payrolls data. In the euro zone Mario Draghi is to take over from outgoing European Central Bank President Jean-Claude Trichet.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 31
New Zealand is to publish official data on building consents, a leading indicator of future construction activity. Later in the day, the country is also to produce government data on labor costs, a leading indicator of consumer inflation. Australian is to release official data on private sector credit as well as a report on inflation expectations. Elsewhere, Japan is to release official data on manufacturing activity and housing starts.
In the U.K., the Bank of England is to publish data on net lending to individuals, which is closely linked to consumer spending. The bank is also to publish data on M4 money supply and mortgage approvals.
The euro zone is to release preliminary data on consumer price inflation, which accounts for a majority of overall inflation. The euro zone is also to produce data on the unemployment rate, an important indicator of economic health.
Later Monday, Canada is to produce its monthly report on gross domestic product, the broadest measure of economic activity and the primary gauge of the economy's health. The country is also to publish official data on factory gate inflation and raw material inflation.
Finally, the U.S is to produce a report on manufacturing activity in the Chicago area, an important indicator of economic health.
Tuesday, November 1
The BoJ is to publish the minutes of its October policy setting meeting. The minutes give a detailed insight into current economic conditions from the bank’s point of view. Japan is also to produce official data on average cash earnings. Later in the day, BOJ Governor Masaaki Shirakawa is to speak; his comments will be closely watched for any clues to the future direction of monetary policy.
Australia is to publish official data on house price inflation, a leading indicator of the housing industry's health, as well as a report on commodity prices. Meanwhile, the Reserve Bank of Australia is to announce its benchmark interest rate.
Switzerland is to publish government data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity. The country is also to release data on manufacturing activity, a leading indicator of economic health.
Elsewhere, the U.K. is to release preliminary data on GDP, the broadest measure of economic activity and the primary gauge of the economy's health. The country is also to publish an industry report on house price inflation, as well as data on manufacturing activity.
Also Tuesday, the Institute of Supply Management is to produce a report on U.S. manufacturing activity, a leading indicator of economic health.
Wednesday, November 2
Australia is to publish official data on building approvals, an important indicator of future construction activity. Later in the day, New Zealand is to produce official data on employment change and the unemployment rate, a leading indicator of economic health.
In the euro zone, Germany is to produce official data on unemployment change. Meanwhile, the U.K. is to publish a report on construction activity, a leading indicator of economic health.
Later Wednesday, the U.S. is to release private sector data on non-farm payrolls that leads government data by two days as well as a government report on crude oil stockpiles. In addition, the Federal Reserve is to announce its benchmark interest rate. The bank’s post-policy meeting press conference will be closely watched for indications to the future possible direction of monetary policy.
Thursday, November 3
Leaders from the G-20 group of industrialized nations are to hold talks to discuss a range of global economic topics, including the financial crisis in the euro zone, in Cannes.
Markets in Japan are to remain closed for a national holiday. Meanwhile, Australia is to publish a report on service sector activity, as well as official data on retail sales.
In the euro zone, the ECB is to announce its benchmark interest rate; the announcement will be followed by the bank’s press conference to discuss monetary policy. Also Thursday, the U.K. is to publish data on service sector activity, a leading indicator of economic health.
Later in the day, the U.S. is to produce its weekly report on initial jobless claims as well as government data on factory orders. The U.S. is also to publish preliminary data on nonfarm productivity and labor costs, important inflationary indicators. In addition the ISM is to release a report on service sector activity, a leading indicator of economic health.
Friday, November 4
The RBA is to release its monetary policy statement, which contains important insights into current economic conditions from the bank’s perspective.
In the euro zone, Germany is to publish official data on factory orders, a leading indicator of economic health. The region is also to publish revised data on service sector growth as well as a report on producer price inflation.
Later in the day, Canada is to produce official data on employment change and the unemployment rate, a leading indicator of economic strength. The country is also to produce government data on building permits and a report on manufacturing activity.
The U.S. is to round up the week with its closely watched government report on nonfarm payrolls, in addition to official data on the unemployment rate and average hourly earnings.
Meanwhile, G-20 leaders are to meet for a second day in Cannes.