Forex Weekly Outlook – April 19-23

Contrary to last week, the important events are shared between many countries this time. Among the 12 major events, the highlights are British employment and GDP releases, major German surveys and American durable goods orders. Will we see another roller-coaster week? Here’s the weekly outlook.

Greek hopes created weekend gaps, but fresh worries from that debt-struck country continue to catch the headlines. It’s not only about Greece – we now have a hot story about Goldman Sachs that triggered fear and helped the dollar and the yen.

Another note – the financial leaders of the G20 nations are meeting in Washington DC on Thursday and Friday. Statements released during these meetings could also shake the markets. OK, let’s begin:

1. Ben Bernanke talks: Starts speaking on Monday at 13:00 GMT in Chicago, at the Financial Literacy and Education Summit. The chairman of the Federal Reserve doesn’t always say something meaningful or related to the economy, but his speeches are closely watched and any small hint can shake the markets, especially as the calendar isn’t crowded on Monday.
2. British CPI: Published on Tuesday at 8:30 GMT. British inflation already missed the target and forced Mervyn King to write a letter explaining the situation. Since then, prices have calmed, but could lift their head again with a 3.2% CPI. A stronger rise in inflation could cause worries in other countries as well.
3. German ZEW Economic Sentiment: Published on Tuesday at 9:00 GMT. This important survey was a burden on the Euro – it dropped in the past 6 months, but there are hopes for a rebound this time – a rise from 44.5 to 45.2 points. This could boost the Euro.
4. Canadian rate decision: Published on Tuesday at 13:00 GMT. The BOC is getting close to raising the rates. Leaving the clear statement of moving the rates at the end of Q2 will probably leave USD/CAD unchanged, yet any change in the statement will rock the pair. There is a very small chance that the Overnight Rate will be raised at this occasion, but the consensus is that it will stay at 0.25%.
5. British employment data: Published on Wednesday at 8:30 GMT. Following last month’s impressing drop in unemployment (32.3K), another small drop of 5.7K is expected this time. This is the last release before the elections, and it will be closely watched by everyone. Also note the unemployment rate, which will probably remain unchanged at 7.8%.
6. American Unemployment Claims: Published on Thursday at 12:30 GMT. Two disappointing weeks of jumps in jobless claims put a big question mark on the strength of the recovery. Also now, hopes are high – a drop from 484K to 449K is expected in claims –  probably  the most accurate indicator for the Non-Farm Payrolls.
7. American PPI: Published on Thursday at 12:30 GMT, together with jobless claims. Similar to consumer prices, producer prices aren’t moving and aren’t putting pressure for a rate hike. A drop of 0.6% last month will probably be followed by a rise of 0.4% this time.
8. American Existing Home Sales: Published on Thursday at 14:00 GMT. Most home sales are of existing ones. After remaining at around 5  million, exactly as expected, the  recent  housing figures create expectations for a rise in sales – the number is expected to be 5.28 million. This usually rocks the markets.
9. German Ifo Business Climate: Published on Friday at 8:30 GMT. The second major German survey is the opposite of the first one – it showed steady growth, almost reaching pre-crisis levels. Another rise, from 98.1 to 98.9 is expected this time.
10. British GDP: Published on Friday at 8:30 GMT. After Britain got out of recession in Q4 on the downwards revision of the data for Q3, another quarter of growth is expected this time. The initial release for Q1 of 2010 is expected to show a growth rate of 0.4%, exactly like the previous quarter and exactly like the fresh estimate from the NIESR institute. Also here, the elections make it a very sensitive release.
11. American Durable Goods Orders: Published on Friday at 12:30 GMT. This important gauge saw a neat rise last month – a rise of 0.9%. Orders are predicted to rise more slowly this time – 0.2% growth. Also Core durable goods orders, which are no less important, are expected to rise by only 0.7%, half of last month’s rise.
12. American New Home Sales: Published on Friday at 14:00 GMT. Although new home sales are only a small portion of all home sales, the timing of this release, near the end of the week, means that it will have a strong impact. Similar to existing home sales, this figure is expected to improve from 308K to 323K.

That’s it for the major events this week.

Further reading:

• For the Euro, read the  EUR USD Forecast.
• For the British Pound, look into the  GBP/USD forecast.
• For the Australian dollar, read the  AUD/USD forecast.
• For USD/CAD, check out the  Canadian dollar forecast.
• For the kiwi, here’s the  NZD/USD forecast.

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