Forex Pros – The U.S. dollar finished higher against the yen and the Swiss franc last week, boosted by a better-than-expected U.S. employment report but the greenback still declined against the euro ahead of an expected euro zone interest rate hike next week.
On Friday, the U.S. Department of Labor said that payrolls rose by 216,000 workers in March after a 194,000 gain the prior month, outstripping expectations for a 188,000 increase. The unemployment rate unexpectedly slid to a two-year low of 8.8%, from 8.9% in February, the Labor Department said.
The yen fell to a six-month low against the dollar amid concerns that Japan’s economic growth will be curtailed in the wake of the March 11 earthquake and tsunami and after radiation levels that can prove fatal were detected at the crippled Fukushima Daiichi plant for the first time last week.
However, the dollar lost ground against the euro after New York Federal Reserve President William Dudley said he saw no reason to adjust the central bank’s loose monetary policy despite the encouraging jobs data.
In contrast, the European Central Bank is widely expected to raise rates next week; the first of what some analysts predict will be several rate increases during the year.
The single currency remained largely unaffected following a bank stress test which indicated that Irish banks will need another EUR24 billion to cover potential losses and a downgrade of Portugal’s government debt to near-junk status.
Next week, rate statements by a number of central banks will dominate, with the main focus on the European Central Banks interest rate announcement on Thursday. The Bank of England, the Bank of Japan and the Reserve Bank of Australia are also to announce their rate decisions.
Also next week, the Federal Reserve is to publish the minutes of its most recent policy setting meeting.
Ahead of the coming week, Forex Pros has compiled a list of these and other significant events likely to affect the markets.
Monday, April 4
Australia is to begin the week by publishing a report on the number of jobs advertised in major daily newspapers and websites, an important indicator of demand in the employment market. Later in the day, the country is to publish industry data on service sector growth. Meanwhile, New Zealand is to publish data on business confidence, a leading indicator of economic health.
The U.K. is to publish official data on growth in the construction industry, an important indicator of economic health, while the euro zone is to publish official data on producer price inflation.
Also Monday, the Bank of Canada is to release the results of its Business Outlook Survey, a leading indicator of economic health. Elsewhere, Federal Reserve Chairman Ben Bernanke is to speak at a public engagement; his comments will be closely watched for clues to the future possible direction of monetary policy.
Tuesday, April 5
The RBA is to announce its official cash rate. The banks rate statement will be closely watched as it discusses the economic outlook and offers clues on the outcome of future rate decisions. Australia is also to publish government data on its trade balance, the difference in value between imports and exports over the month.
The euro zone is to publish official data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity. Elsewhere, the U.K. is to publish a report on service sector activity, a leading indicator of economic health.
Also Tuesday, the Federal Reserve is to publish the minutes of the most recent policy setting meeting of the Federal Open Market Committee. The minutes contain in-depth insights into the economic and financial conditions that influenced their vote on where to set interest rates. Meanwhile, the U.S. Institute of Supply Management is to publish a report on service sector growth, a leading indicator of economic health.
Wednesday, April 6
Australia is to publish government data on home loans issued, a leading indicator of demand in the housing market. Later in the day, Switzerland is to release official data on consumer price inflation which accounts for a majority of overall inflation.
In the U.K., the National Institute of Economic and Social Research is to publish its monthly estimate of gross domestic product, in an effort to predict the quarterly government data. The U.K. is also to publish government data on manufacturing production, a leading indicator of economic health.
In the euro zone, Germany is to publish official data on factory orders a leading indicator of production. The single currency bloc is also to publish revised quarterly data on GDP.
Elsewhere, Canada is to publish its Ivey PMI, a leading indicator of economic health.
Thursday, April 7
Australia is to release official data on employment change and the country’s unemployment rate, a leading indicator of economic health. Meanwhile, the BoJ is to announce its benchmark interest rate, which will be followed by a press conference to discuss the rate decision.
In the euro zone, Germany is to publish official data on industrial production, a leading indicator of economic health, while France is to produce data on its trade balance. In addition, the ECB is to announce its minimum bid rate. The announcement will be followed by a closely watched press conference.
Also Thursday, the BoE is to announce its official bank rate.
The U.S. is to publish a key weekly report on initial jobless claims, the nation’s earliest employment data as well as data on consumer credit and natural gas inventories. Elsewhere, Canada is to publish official data on building permits, a leading gauge of future construction activity.
Friday, April 8
Japan is to produce official data on the country’s current account balance as well as its economy watchers sentiment survey, which monitors consumer spending. In addition, the BoJ is to release its monthly report, which looks at the data policymakers evaluated when making the most recent interest rate decision.
In the euro zone, Germany is to produce a government report on its trade balance, while France is to release data on its government budget balance. In addition, the European Union economic summit is to begin in Brussels.
Elsewhere, the U.K. is to publish official data on producer price inflation, a leading indicator of consumer inflation, while Switzerland is to release official data on its unemployment rate.
Meanwhile, Canada is to publish official data on employment change and the country’s unemployment rate, a leading indicator of overall economic health. The country is also to publish government data on housing starts.
Finally, the U.S. is to round up the week with a report on wholesale inventories, an important indicator of future business spending.
ForexPros.com
