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Majors, US Dollar Forecast

Forex Weekly Outlook March 27-31

The US dollar struggled amid further Fed fallouts and the closely watched voted in Congress. German Ifo Business Climate, US CB Consumer Confidence, and GDP data from the US and Canada are the main events on forex calendar. Here is an outlook on the highlights of  this week.

Last week US data came out weaker than expected with a 15,000 rise in the number of weekly jobless claims missing predictions for a 6,000 contraction. Furthermore, Durable goods orders excluding transportation rose 0.4% in February, falling short of estimates. Overall capital goods orders rose 2.6% on the month following a 5.2% gain in January. Markets were watching the political deliberations in Congress regarding Trump-care. The Republicans eventually pulled the bill and accepted that Obamacare will remain “the law of the land”. Does this political failure undermine Trump’s plans for cutting taxes? Or frees him to pursue this eaiser task? Politics will continue impacting the US dollar.  Let’s start,

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  1. German Ifo Business Climate: Monday, 8:00. German business confidence improved in February, strengthening the central bank’s projection that economic growth strengthened at the start of the year. Ifo Business Climate advanced to 111 from a revised 109.9 in January beating estimates of 109.6. Current economic conditions edged up to 118.4 from 116.9, and future expectations advanced to 104 from 103.2. German economy expanded at the fastest pace in five years and is expected to continue this trend in 2017, despite uncertainty in the EU block. Yet the country is facing political uncertainty amid the elections scheduled for September where Chancellor Angela Merkel is facing the Social Democratic party which gained momentum in the last few months. German business confidence is expected to rise further to 111.2 in March.
  2. US CB Consumer Confidence: Tuesday, 14:00. US Consumers’ moral increased to 114.8 in February, reaching the highest reading since July 2001. Economists expected the Index to hit 111 in February. Current business conditions increased compared to January. Overall, consumers expect the economy to continue expanding in the coming months. Consumers also expect the labor market will continue its tightening. Consumer confidence is estimated to reach 113.9 this time.
  3. Stephen Poloz speaks: Tuesday, 15:10 Bank of Canada Governor Stephen Poloz will speak in Oshawa. Earlier this month Poloz warned about the “significant uncertainties” buffeting the Canadian economy in light of Trump’s new policies regarding protectionist and trade tax. Mr. Poloz suggested that a rate cut remains “on the table.” But many economists are convinced the bank’s next move will be a rate increase.
  4. US Crude Oil Inventories: Wednesday, 14:30. During the week ended Mar. 17, oil  prices  declined to their lowest since late November, after US crude stocks reached a record high of 5 million barrels.  The Sharp gain was in contrast to analysts’ forecast of a 1.9 million increase. An agreement between the Organization of the Petroleum Exporting Countries and some non-OPEC producers to reduce output by 1.8 million barrels per day (bpd) in the first half of 2017 has done little to reduce bulging global oil stockpiles.
  5. US GDP data: Thursday, 12:30. The U.S. economy expanded 3.5% in the third of 2016, posting the best growth in two years. But in Q4, the economy grew by only 1.9% according to the second release. We will now get the third and final read and a small upgrade to 2% is on the cards.
  6. US Unemployment Claims: Thursday, 12:30. The number of new job seekers filing claims for unemployment benefits rose to a seven-week high of 258,000 in the week ended March 18, taking the shine off positive employment data recently released. Economists expected an increase of 240,000 claims. The four-week average of claims increased to 240,000 from 239,000 in the prior week.
  7. UK GDP (final): Friday, 8:30. So far, the UK economy withstood the EU Referendum quite well, enjoying solid growth in Q3 and Q4. According to the second read, the economy grew by 0.7% q/q. This number will probably be confirmed in the last read.
  8. Canadian GDP: Friday, 12:30. Canadian GDP increased 0.3% in December in line with market forecast. November’s reading was upwardly revised to 0.5% which was originally reported as 0.4% growth. GDP rose 0.6% in the fourth quarter of 2016 following a 0.9% gain in the previous three months. Domestic consumption gained 0.6% for the quarter after a rise of 0.7% in the prior three months. Exports improved, while imports fell sharply. Business investment declined 2.1% following a 0.5% drop in the third quarter and capital spending has declined for nine successive quarters.

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