Forex Weekly Outlook -July 25-29

GDP figures from the UK, Canada and the US, US Unemployment Claims and housing data are the main market movers today. Here is an outlook on the main events ahead.

The European leaders finally took serious steps towards promoting growth in the troubled countries. This  provided the euro the long awaited boost. The troubles in the euro-zone aren’t fully behind us, as reflected in the somewhat hesitant moves by the euro. On the other side of the Atlantic, the drama has yet to reach the peak, as creative outcomes are discussed for the debt ceiling mess. Talks are stuck.

Regarding indicators, they were lousy all over the world. Last   week, weekly US unemployment claims rose to 418K, well above the 409K expected and following 405K in the week before. This is the fifteenth time Jobless claims have crossed the 400K border indicating unfavorable conditions in the job market. Will this condition continue?

Let’s Start

1. British GDP: Tuesday, 8:30. Preliminary readings from  the Office for National Statistics  showed a small improvement in the first quarter growing by a modest 0.5% following a 0.5% decline in the previous quarter. This small increase is explained by the high oil prices however indicates an improvement in the UK economy. A small gain of 0.2% is expected now.
2. US CB Consumer Confidence: Tuesday, 14:00.U.S. consumer confidence decreased to58.5 in June after61.7 in May. This unexpected drop was led by  a negative assessment of current conditions and continued pessimism about the short-near future. A small drop to 58.1 is forecasted.
3. US New Home Sales: Tuesday, 14:00. New home sales dropped 2.1% in May reaching 319,000 following326,000 in the previous month but better than the 311,000 predicted. The supply of new homes dropped 6,000 to 166,000 the lowest in nearly 50 years indicating the serious drought in the housing market. A rise to 321,000 is predicted.
4. Australian inflation data: Wednesday, 1:30. Australia’s first-quarter consumer price index (CPI) increased by 1.6% compared to 0.4% gain in the previous quarter. This reading is higher than the 1.2 rise forecasted. In case inflation continues, the Reserve Bank of Australia (RBA) is bound to raise rates. An increase of 0.7% is expected.
5. US Core Durable Goods Orders: Wednesday, 12:30. Core Durable goods orders dropped unexpectedly 0.7% in June indicating a slowdown in economic expansion while economists predicted 1.0% gain. A rise of 0.5% is forecasted.
6. New Zealand rate decision: Wednesday, 21:00. The Reserve Bank ofNew Zealand maintained its official cash rate steady at 2.50% conditioning future rate hikes in the pace of economic recovery. Nevertheless Mr. Allan  Bollard, Governor of the Reserve Bank is quite optimistic regarding a pickup in economic activity and retaining a full recovery after the Christchurch earthquake.  No change in rates od forecasted, as the kiwi gains traction.
7. US Unemployment Claims: Thursday, 12:30. Initial Jobless claims increased last week by 10,000 to 418,000. Economists estimated jobless claims to reach 409,000. Initial claims have crossed the 400,000 mark for 15 straight weeks indicating rickety market conditions. A drop to 412,000 is predicted now.
8. US Pending Home Sales: Thursday, 14:00. The number of houses about to be sold in theU.S. recovered ground with 8.2% gain in May however but demand for mortgages dropped leaving many houses unsold. This positive reading comes after 11.3% drop in April indicating the housing market is still having a rough time. A sharp drop of 0.1% is expected.
9. Canadian GDP: Friday, 12:30. Canada’s gross domestic product remained flat in April due to coinciding increases and declines among different sectors. Gains were achieved in coal and metal mining, retail sales, the public sector, construction and utilities. These gains were offset by decreases in manufacturing, wholesale trade, finance, real estate and the insurance industries. An increase of 0.1% is expected.
10. US Advance GDP: Friday, 12:30. Real GDP increased 1.8 % in the first quarter of 2011 following a rise of 3.1% in the fourth quarter of 2010. The smaller than expected reading was led by an increase in imports and a decrease in consumer spending.   A further rise of 1.6% is forecasted now.

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

*All times are GMT.

Further reading:

• For EUR/USD, check out  the  Euro to Dollar forecast.
• For the Japanese yen, read the  USD/JPY forecast.
• For GBP/USD  (cable), look into the  British Pound forecast.
• For the Australian dollar (Aussie), check out the  AUD to USD forecast.
• For the New Zealanddollar (kiwi), read the  NZD forecast.
• For USD/CAD (loonie), check out the  Canadian dollar
• For the Swiss Franc, see the  USD/CHF forecast.