Forex Weekly Outlook Mar 31-Apr 4

[Ammeo 10]

The US dollar gained against the euro and the yen, but lost ground against the other currencies. the ECB rate decision, Janet Yellen’s speech, US ISM Manufacturing PMI, important employment data culminating in the all-important Non-Farm Payrolls and rate decision in the Eurozone are the highlights of this week. Here is an outlook on the main events awaiting us this week.

 

Final US GDP growth for the final quarter of 2013 was slightly revised to the upside, reaching 2.6%. In the meantime, weekly jobless claims surprised with a 10,000 drop to 311,000, beating forecast for a 326,000 reading, indicating the US job market continues to improve. Will this trend continue? In the euro-zone, dovish comments by the ECB pushed the euro down, while UK retail sales gave a boost to the pound. NZD/USD reached the highest levels since 2011 and also the Aussie and the loonie enjoyed significant gains. Let’s start:

Updates:

 

 

Eurozone inflation data: Monday, 9:00. Inflation in the Eurozone eventually increased by only 0.7%. The initial reading was 0.8%, better than the 0.7% increase predicted by analysts, but this changed in the final read. The core CPI figure, excluding energy, food, alcohol & tobacco, edged up 1% in February, following 0.8% posted in the previous month. Markets had expected the pace of price acceleration to remain steady for the month. Eurozone inflation is expected to reach 0.6%. The low expectations are due to the weak German inflation numbers.

Canadian GDP: Monday, 12:30. Gross domestic product in December fell more than expected, dropping 0.5% after a 0.2% gain in the previous month. Analysts expected a smaller decline of 0.2%. This was the biggest monthly decline since March 2009. Weakness was visible across the board however; Bank of Canada Governor Stephen Poloz said this could be a temporary relapse due to weather related factors. Nonetheless real gross domestic product grew by 2.0% in 2013 compared to 2012. Gross domestic product is expected to expand 0.4%.

Janet Yellen speaks: Monday, 13:55. Federal Reserve Chair Janet Yellen is scheduled to speak in Chicago. Yellen may explain the Fed’s latest decision to continue tapering, cutting another $10bn from its economic stimulus. The Federal Reserve Chair may also elaborate on the rate hike intentions for 2015. Volatility is expected.

Australian rate decision: Thursday, 3:30. Australia’s central bank maintained its cash rate at a record low of 2.5% in March, in line with market consensus. The weakening of the Australian dollar will help boost growth. The RBA kept an accommodative monetary policy with credit growth rising gradually. Domestic demand showed signs of improvement and the labor market is expected to grow in the coming months. Rates are expected to remain unchanged.

US ISM Manufacturing PMI: Tuesday, 14:00. Manufacturing activity expanded more rapidly than expected in February, emerging from the harsh winter weather rising to 53.2 from 51.3 in January. The manufacturing expansion could have been stronger, if it had not been for a shortage of parts. However, orders have improved, ensuring larger growth in the coming months. Another improvement to 54.2 is anticipated now.

Edited March 30, 2014 by tradingwizzard

[kanchimishra 10]

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