Forex Weekly Outlook February 24-28 – Corona Weighing on Risk Appetite, Investors Await U.S. GDP

The Federal Reserve minutes from the January meeting indicated that the Fed does not plan to trim interest rates in the near future. Policymakers noted their concern with the coronavirus, stating that “the threat of the coronavirus, in addition to its human toll, had emerged as a new risk to the global growth outlook, which participants agreed warranted close watching.” This warning from the Fed underscores the threat that coronavirus poses to the global economy.  There was some disappointing news on the manufacturing front, as manufacturing PMI came in at 50.8, which indicates stagnation in the manufacturing sector. This was shy of the estimate of 51.5 points.

1. US CB Consumer Confidence: Tuesday, 1:00. The Consumer Board survey of 5 thousand households is showing strong consumer confidence in the U.S. economy. The December reading of 131.6 easily beat the forecast of 128. 2 points. The indicator is expected to improve to 132.6 in January.
2. German Final GDP: Tuesday, 7:00. The final release for GDP is projected to confirm that the German economy was stagnant in Q4, as the initial GDP reading came in at 0.0%. The final figures do not usually deviate from the initial readings.
3. US Durable Goods Orders: Thursday, 13:30. Durables Goods Orders has been showing strong swings of late. In December, the indicator climbed 2.4%, double the estimate of 1.2%. Analysts are braced for a decline of 1.4% in January.
4. US Preliminary GDP: Thursday, 13:30. Preliminary (second estimate) GDP is expected to show a gain of 2.2% in the fourth quarter. This was slightly higher than the first estimate, which indicated that the U.S. economy grew by 2.1%.
5. German Preliminary CPI: Friday, All Day. Inflation levels remain low in the eurozone’s largest economy, which is the bellwether for the entire eurozone. The final release for January came in at -0.6%, matching the forecast. The initial reading for February is expected to rebound to 0.3%.
6. French Preliminary GDP: Friday, 7:45. The second-largest economy in the eurozone contracted by 0.1% in Q4, according to the initial GDP reading. The second estimate is expected to confirm this figure.
7. Canadian GDP:  Friday, 13:30. Canada’s GDP reports continue to hover around the zero level, pointing to weak economic growth. In November, the economy grew by 0.1%, above the forecast of 0.0%. The December estimate is unchanged at 0.1%.

*All times are GMT

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• EUR/USD forecast  – for everything related to the euro.
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• AUD/USD forecast  – projections for the Aussie dollar.
• USD/CAD forecast  – Canadian dollar predictions

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