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Majors, US Dollar Forecast

Forex Weekly Outlook November 26-30

The dollar and the yen were clearly on the losing side as the global mood turned positive and risk assets were in demand. Optimism about Greece was the main driver, although it was aided by positive signs from China as well. Eurogroup Meetings, US Core Durable Goods Orders and GDP figures from the US, Canada and the UK, comprise our list this week. Here is an outlook on the main market movers ahead.

The week didn’t begin so positively as the Eurogroup meeting ended without a resolution. However,  The euro-zone countries want to avoid taking losses, something that the IMF says is inevitable in order to make Greece’s debt sustainable. However, a variety of small measures such as lowering the interest rates on loans to Greece, and some wishful thinking, could turn out into a deal this Monday.  See more about the Greek salad that is prepared. US data was on the backburner due to the effects of Sandy on the data, as well as the Thanksgiving holiday. With US traders getting back to work, volatility could be even higher. Let’s start.

  1. Eurogroup Meeting on Greece:  Monday. The ministers of the European Union will convene once again and try to agree on disbursing the next tranche of aid to the debt struck country. As aforementioned, they are working hard on cutting a deal with the IMF. It’s important to note that EUR/USD already priced this in, so a deal will probably have limited impact, while no deal could significantly hurt the pair.
  2. UK Revised GDP: Tuesday, 9:30. The UK had an impressive third quarter. The country exited the second recession since the crisis and grew by no less than 1%. However, this was probably a one time “Olympic leap”. The second release of GDP will like confirm the 1% growth rate.
  3. US Core Durable Goods Orders: Tuesday, 13:30. U.S. Durable Goods Orders edged up in September amid Aircraft Orders, surging 9.9% in September, after a 13.1% plunge in August. This sharp rise beat predictions for a 7.1% rise. Meanwhile Core orders, excluding transportation rose 2.0%, also exceeding analysts’ predictions for a 0.9% gain. Nevertheless there was a general decline in orders of both durable the fiscal cliff may be weighing on businesses investment plans in the second half of 2012. A decline of 0.6% is predicted this time.
  4. US CB Consumer Confidence: Tuesday, 15:00. Americans’ confidence surged in October to 72.2 amid improvement in the job market, up from 70.3 in September. The reported showed that consumers were more optimistic about both the economy and the job market now and in the next six months. However, the effects of Superstorm Sandy will probably weaken the coming reading. A rise to 73.1 is forecasted.
  5. US New Home Sales: Wednesday, 15:00. New U.S. single-family home sales topped predictions in September, rising to the highest level in nearly 2-1/2 years, to a seasonally adjusted 389,000-unit annual rate. This sharp rise followed a 368,000 reading in the previous month, indicating further improvement in the housing market. The Housing sector is the brightest spot in the US economy, after years of being the weakest factor. Rising sales reduce the stock of unsold properties on the market, rising sales lower the stock of unsold properties on the market, casing a price increase which in turn boosts new building projects. A nearly similar rise of 387K  is predicted this time.
  6. US GDP: Thursday, 13:30. A better than expected 2% (annual) growth rate was reported in the first release of GDP for Q3. An expansion of 2.8% is anticipated.  The second release is expected to provide an upwards revision. US gross domestic product increased by a seasonally adjusted 1.7% in the second quarter, following a 2.0% annualized pace in the first quarter. This reading was higher than the 1.5% rise initially estimated.
  7. US Unemployment Claims: Thursday, 13:30. Fewer Americans filed applications for  unemployment benefits  last week despite the lingering effects of superstorm Sandy weighing on the US economy. Jobless claims  dropped 41,000 to 410,000 following 451 000 in the week before. Analysts believe this is a temporary setback for the US job market but real progress will be achieved only with fiscal clarity. A further decline to 404,000 is predicted now.
  8. Pending Home Sales: Thursday, 15:00. Pending Home Sales Index increased less than predicted in September, rising by 0.3%, following a 2.6% plunge in August .Analysts forecasted a 2.3% climb. The weak reading came despite an impressive recovery in the overall housing sector indicating existing home sales will grow modestly in the coming months. A rise of 0.9% is forecasted now.
  9. Canadian GDP: Friday, 13:30. Canada’s gross domestic product dropped by an unexpected 0.1% in August, following a 0.2% expansion in July. Food products, machinery, equipment and supplies, of building materials increased while mining, manufacturing, utilities and construction dropped. A rise of 0.1% is expected this time.

*All times are GMT.

That’s it for the major events this week. Stay tuned for coverage on specific currencies

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Anat Dror

Anat Dror

Anat Dror Senior Writer I conceptualize, design and create multi-lingual websites. Apart from the technical work, my projects usually consist of writing content for these sites in English, French and Hebrew. In the past, I have built, managed and marketed an e-learning center for language studies, including moderating a live community of students. I've also worked as a community organizer