Investing.com - The dollar regained ground against the other major currencies on Friday as investors locked in profits after a week which saw steep declines in the dollar against the euro, yen and most other currencies.
The dollar looked likely to remain under pressure amid concerns that the first U.S. government shutdown for 17 years would derail the fragile economic recovery and prompt the Federal Reserve to maintain its stimulus program for longer.
Markets were also mulling over how the political deadlock in Washington will impact on negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by October 17.
House Republican leader John Boehner said Friday the House will not vote on a budget bill without conditions and demanded spending cuts in exchange for raising the government's borrowing limit.
The shutdown meant that Friday’s scheduled release of the U.S. nonfarm payrolls report for September was postponed and no new date was given for the release of the data.
EUR/USD ended Friday’s session at 1.3554, down 0.47% for the day, after rising to eight-month highs of 1.3645 on Thursday. For the week, the pair gained 0.23%.
The European Central Bank left interest rates on hold at 0.5% on Wednesday, in a decision that was widely expected.
The dollar pushed higher against the yen, with USD/JPY up 0.21% to settle at 97.46, off Thursday’s five-week low of 96.92. The pair still ended the week down 0.93%.
The Bank of Japan announced no changes to monetary policy at the conclusion of its monthly meeting on Friday, in a widely expected decision.
BoJ Governor Haruhiko Kuroda warned that the U.S. budget deadlock and fears over the threat of a possible U.S. default could destabilize financial markets.
Elsewhere, the Swiss franc came under heavy selling pressure after Switzerland's banking regulators said they are conducting investigations into several Swiss banks over allegations that foreign exchange rates may have been manipulated.
USD/CHF rallied 0.88% to settle at 0.9073 on Friday, up from Thursday’s 20-month lows of 0.8966. For the week, the pair ended with gains of 0.20%.
In the week ahead, investors will continue to closely monitor political developments in Washington. Delays in U.S. economic data releases look likely to fuel uncertainty over whether the Federal Reserve will hold off on any move to roll back its USD85 billion a month asset purchase program.
Market participants will be looking ahead to the outcome of Thursday’s Bank of England policy meeting and Friday’s Canadian jobs report.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 7
Markets in Australia are to remain closed for a national holiday.
The Swiss National Bank is to release data on its foreign currency reserves. This data provides investors with an insight into the bank’s currency market operations.
Later Monday, Canada is to publish government data on building permits, a leading indicator of future construction activity.
Tuesday, October 8
New Zealand is to release private sector data on business confidence, a leading indicator of economic health, while Australia is to publish a report on job advertisements.
Switzerland is to produce official data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity, as well as a separate report on consumer price inflation.
Later Tuesday, SNB Chairman Thomas Jordan is to speak, his comments will be closely watched.
The U.K. is to release private sector data on retail sales.
In the euro zone, Germany is to release data on the trade balance and factory orders.
Canada is to release data on the trade balance, the difference in value between imports and exports.
Wednesday, October 9
Australia is to publish a report on consumer sentiment, a leading indicator of consumer spending, as well as data on business confidence.
The BoJ is to release monetary policy meeting minutes, which provide insights into economic conditions from the bank’s perspective. Japan is also to produce data on preliminary machine tool orders.
The U.K. is to release official data on manufacturing and industrial production, as well as data on the trade balance.
In the euro zone, Germany is to produce official data on industrial production, a leading indicator of economic health.
Thursday, October 10
New Zealand is to release private sector data on manufacturing activity.
Japan is to release data on core machinery orders, a leading indicator of production, in addition to a report on tertiary activity.
Australia is to produce official data on the change in the number of people unemployed and the unemployment rate.
The ECB is to publish its monthly bulletin, which outlines the bank’s economic outlook.
The BoE is to announce its benchmark interest rate.
Friday, October 11
In the euro zone, Italy is to hold an auction of 10-year government bonds.
Canada is to round up the week with data on the change in the number of people employed and the unemployment rate.
The dollar looked likely to remain under pressure amid concerns that the first U.S. government shutdown for 17 years would derail the fragile economic recovery and prompt the Federal Reserve to maintain its stimulus program for longer.
Markets were also mulling over how the political deadlock in Washington will impact on negotiations to raise the U.S. debt ceiling, which the U.S. Treasury Department has estimated will be reached by October 17.
House Republican leader John Boehner said Friday the House will not vote on a budget bill without conditions and demanded spending cuts in exchange for raising the government's borrowing limit.
The shutdown meant that Friday’s scheduled release of the U.S. nonfarm payrolls report for September was postponed and no new date was given for the release of the data.
EUR/USD ended Friday’s session at 1.3554, down 0.47% for the day, after rising to eight-month highs of 1.3645 on Thursday. For the week, the pair gained 0.23%.
The European Central Bank left interest rates on hold at 0.5% on Wednesday, in a decision that was widely expected.
The dollar pushed higher against the yen, with USD/JPY up 0.21% to settle at 97.46, off Thursday’s five-week low of 96.92. The pair still ended the week down 0.93%.
The Bank of Japan announced no changes to monetary policy at the conclusion of its monthly meeting on Friday, in a widely expected decision.
BoJ Governor Haruhiko Kuroda warned that the U.S. budget deadlock and fears over the threat of a possible U.S. default could destabilize financial markets.
Elsewhere, the Swiss franc came under heavy selling pressure after Switzerland's banking regulators said they are conducting investigations into several Swiss banks over allegations that foreign exchange rates may have been manipulated.
USD/CHF rallied 0.88% to settle at 0.9073 on Friday, up from Thursday’s 20-month lows of 0.8966. For the week, the pair ended with gains of 0.20%.
In the week ahead, investors will continue to closely monitor political developments in Washington. Delays in U.S. economic data releases look likely to fuel uncertainty over whether the Federal Reserve will hold off on any move to roll back its USD85 billion a month asset purchase program.
Market participants will be looking ahead to the outcome of Thursday’s Bank of England policy meeting and Friday’s Canadian jobs report.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, October 7
Markets in Australia are to remain closed for a national holiday.
The Swiss National Bank is to release data on its foreign currency reserves. This data provides investors with an insight into the bank’s currency market operations.
Later Monday, Canada is to publish government data on building permits, a leading indicator of future construction activity.
Tuesday, October 8
New Zealand is to release private sector data on business confidence, a leading indicator of economic health, while Australia is to publish a report on job advertisements.
Switzerland is to produce official data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity, as well as a separate report on consumer price inflation.
Later Tuesday, SNB Chairman Thomas Jordan is to speak, his comments will be closely watched.
The U.K. is to release private sector data on retail sales.
In the euro zone, Germany is to release data on the trade balance and factory orders.
Canada is to release data on the trade balance, the difference in value between imports and exports.
Wednesday, October 9
Australia is to publish a report on consumer sentiment, a leading indicator of consumer spending, as well as data on business confidence.
The BoJ is to release monetary policy meeting minutes, which provide insights into economic conditions from the bank’s perspective. Japan is also to produce data on preliminary machine tool orders.
The U.K. is to release official data on manufacturing and industrial production, as well as data on the trade balance.
In the euro zone, Germany is to produce official data on industrial production, a leading indicator of economic health.
Thursday, October 10
New Zealand is to release private sector data on manufacturing activity.
Japan is to release data on core machinery orders, a leading indicator of production, in addition to a report on tertiary activity.
Australia is to produce official data on the change in the number of people unemployed and the unemployment rate.
The ECB is to publish its monthly bulletin, which outlines the bank’s economic outlook.
The BoE is to announce its benchmark interest rate.
Friday, October 11
In the euro zone, Italy is to hold an auction of 10-year government bonds.
Canada is to round up the week with data on the change in the number of people employed and the unemployment rate.