Forexpros – The U.S. dollar was boosted on Friday, after stronger-than-forecast U.S. employment data dampened expectations that the Federal Reserve will implement fresh monetary easing measures to stimulate growth.
The U.S. Department of Labor said nonfarm payrolls rose by 243,000 last month, the fastest increase in nine months, after a revised 203,000 gain in December. Economists had expected the U.S. economy to add 150,000 jobs in January. The unemployment rate unexpectedly declined to a three-year low of 8.3%.
A separate report showing a greater-than-expected expansion in the U.S. service sector in January also boosted the greenback.
Following last month’s policy meeting the Fed pushed back the timing of a likely interest rate hike until mid-2014 and indicated that the bank may embark on a third round of quantitative easing.
In testimony to the House Budget Committee in Washington on Thursday Fed Chairman Ben Bernanke said the economy has shown “signs of improvement” but warned that the outlook remained “uncertain”.
The dollar strengthened against the yen following the robust data, pulling back from three-month lows, close to levels where Japanese authorities reiterated warnings over intervention in the foreign exchange market to curb the appreciation of the yen.
But concerns over delays in negotiations on a debt restructuring deal for Greece persisted, despite assurances from European officials that a deal is close to being finalized.
Greece needs to secure an agreement with its private creditors on a debt swap deal in order to receive its next tranche of bailout funds in time to avert a default when a EUR14.5 billion bond repayment comes due on March 20.
In the week ahead, investors will be watching developments in the euro zone, with European leaders holding a string of meetings to discuss Greece’s bailout and the financial guarantees for the European Financial Stability Facility, the euro zone’s new bailout fund.
Meanwhile, the European Central Bank is to hold its policy setting meeting, but the bank is widely expected to keep rates on hold at 1%.
In the U.S., Fed Chairman Ben Bernanke is to testify before the Senate budget committee in Washington.
Ahead of the coming week, Forexpros has compiled a list of these and other significant events likely to affect the markets.
Monday, February 6
Australia is to produce official 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 industry data on job advertisements.
Later in the day, New Zealand is to publish official data on labor cost inflation, a key indicator of consumer inflation.
The Swiss National Bank is to publish a report on foreign currency reserves, which provides insight into the SNB’s currency market operations. Elsewhere in Europe, the U.K. is to publish industry data on house price inflation, a leading indicator of the housing industry’s health.
In the euro zone, a report is to be published by Sentix on its investor confidence index, a key gauge of economic health. In addition, Germany is to publish official data on factory orders.
Also Monday, Canada is to produce a report on the Ivey purchasing managers’ index, a leading indicator of economic health.
Tuesday, February 7
New Zealand is to publish official data on labor cost inflation, a key indicator of consumer inflation. Meanwhile, the Reserve Bank of Australia is to announce its benchmark interest rate, followed by the bank’s rate statement.
The U.K. is to produce industry data on retail sales. Later in the day, the euro zone is to publish official data on German industrial production, an important gauge of economic health.
Canada is to publish official data on building permits, an excellent gauge of future construction activity.
In the U.S., Fed Chairman Ben Bernanke is due to testify on the economic outlook and federal budget situation before the Senate Budget Committee in Washington.
Wednesday, February 8
Australia is to release industry data on consumer sentiment, a leading indicator of consumer spending.
Later in the day, New Zealand is to publish official data on employment change, an important indicator of consumer spending, followed by a report on the country’s unemployment rate.
Elsewhere, Canada is to produce industry data on housing starts, while the U.S. is to publish a government report on crude oil inventories.
Thursday, February 9
Japan is to release government data on core machinery orders, a key gauge of production.
Switzerland is to produce a government report on consumer climate, an important indicator of consumer spending.
The U.K. is to release official data on manufacturing production, a leading indicator of economic health, as well as official data on the country’s trade balance, the difference in value between imports and exports over the month. The U.K. National Institute of Economic and Social Research is to publish its monthly estimate on gross domestic product.
Also Thursday, the Bank of England is to announce its benchmark interest rate.
The ECB is also to announce its benchmark interest rate, followed by a press conference. The conference will also be closely watched for signs of new measures to counter the region’s sovereign debt crisis.
Later in the day, the U.S. is to publish government data on unemployment claims, an important signal of overall economic health.
Friday, February 10
The RBA is to release its monetary policy statement, which will be closely watched as it provides valuable insight into the bank’s view of economic conditions and inflation.
In the euro zone, a report is to be published on French industrial production. Meanwhile, Switzerland is to produce official data on consumer price inflation, which accounts for a majority of overall inflation.
The U.K. is to produce official data on producer price inflation input, a key gauge of consumer inflation.
Later Friday, Canada is to release official data on the trade balance.
The U.S. is to round up the week with official data on the country’s trade balance, as well as preliminary data from the University of Michigan on consumer sentiment and inflation expectations.
Later in the day, Fed Chair Ben Bernanke is due to speak about the housing market at the 2012 National Association of Homebuilders International Builders show.
Forexpros
