Home Forex Weekly Outlook January 23-27 2017
Majors, US Dollar Forecast

Forex Weekly Outlook January 23-27 2017

The US dollar was mixed as Donald Trump entered the White House. Apart from Trump’s first week as President, we have some interesting publications: US and UK GDP, durable goods orders from the US and more These are the highlights of this week. Join us as we explore the main events on forex calendar.

Donald Trump was sworn in as the 45th president of the United States. The world waits to see Trump’s first moves in light of his promises to drastically change US policies in nearly every field. trade relations with China and Mexico, US relations with Russia, Nato, healthcare fiscal stimulus and other topics. Will Trump execute his plans?  Let’s start:

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  1. Mario Draghi speaks: Sunday, 23:00. ECB President Mario Draghi will speak in Torino. Draghi has maintained monetary policy in the first ECB meeting this year saying it will be a politically stormy period. Recent positive economic data releases prompted Germany to call for a QE exit in 2017. If data continues to improve, such voices may also be heard in the ECB’s governing council. However, Draghi wishes to silence these suggestions saying there are premature.
  2. German Ifo Business Climate: Wednesday, 9:00. German business morale edged up to 111 in December from 110.4 in the previous month, rising to the highest level since February 2014. The strong reading indicates strong growth in the fourth quarter.   The reading was higher than anticipated showing Germany was resilient to downside risks from the Brexit and the uncertainties regarding the new US policy under the newly elected President. Economists believe growth will be weaker in 2017 compared to 2016 due to elevated interest rates leading to higher inflation and a slowdown in the employment market. Business climate is expected to rise to 111.3 this time.
  3. US Crude Oil Inventories: Wednesday, 15:30. The Energy Information Administration reported  a build of 2.3 million barrels for the week to January 13, a day after the API reported a  5.04-million-barrel  decline tin US Crude oil inventories.  Refineries produced 9 million barrels per day of gasoline, down on the previous week’s 9.7 million barrels daily. Inventories of the fuel increased by 6 million barrels in the period, compared with a 5-million-barrel increase in the week to January 6.  Imports of crude oil registered 8.4 million barrels daily.
  4. UK GDP data: Thursday, 9:30. The U.K. economy slowed less than forecast in the third quarter following the Brexit vote, amid rise in services. The reading dismissed concerns about a possible fallout before the referendum. The economy expanded 0.6% in the final read, a good outcome. However, the muted effect of the Brexit vote could be explained by the long process in which the UK plans its separation from the EU. Formal talks to start the process are only due by the end of March 2017. The fourth quarter growth rate is expected to reach 0.5%.
  5. US Unemployment Claims: Thursday, 13:30. New claims for US unemployment benefits fell 15,000 in the second week of January hitting 234,000, The reading was better than the 252,000 forecast pulling the four-week average down to a 43-year low of 246,750. The low level of claims below 300,000 continued a nearly two-year streak. The number of new claims is expected to reach 247,000 this week.
  6. US GDP data: Friday, 13:30. The U.S. economy expanded at an annual rate of 3.5 in the third quarter compared with the same period a year ago, displaying the fastest economic growth in two years. Growth was slow in the first half of the year, averaging just above 1%, however the pace of growth has picked up in the following months, gaining momentum in the third quarter. The newly elected president Donald Trump has dismissed the rate of expansion promising a 4% rise if he is elected. US economy is expected to expand by 2.1% in the fourth quarter of 2016.
  7. US Durable Goods Orders: Friday, 13:30. Orders for long-lasting products in the U.S. declined 4.6% in November to $228.2 billion, following four months of gains. Economists expected a 4.9% decline. However, core orders, excluding transportation, edged up 0.5%, while expected to rise only 0.2%. Defense orders for defense aircraft doubled, rising 103%. Non-aircraft components such as communications equipment increased 6.7%, primary metals rose 2.3%, machinery 1.3%, and automobiles 0.8%. Durable goods orders for December are expected to rise 2.7%, while core orders are expected to gain 0.5%.

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

*All times are GMT.

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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