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In one of the more exciting weeks in currency trading, the US dollar reached new highs only to fall later on, and the yen plunged. The upcoming week features Ben Bernanke’s speeches, FOMC Meeting Minutes, US Retail sales among the major events. Here is an outlook on the market-movers awaiting us.

In Japan, the new governor delivered big time: Kuroda announced a comprehensive set of measures, and the yen reacted with a big plunge across the board. The 100 level for USD/JPY is getting closer. In Europe, Draghi whipsawed the market by initially hinting a rate cut only to suggest very firm words. EUR/USD hit new lows and then leaped. Last week saw a  big disappointment in the Non-Farm Payrolls report. The US economy added only 88,000 jobs in March, the slowest figure in nine months, and way below expectations, The unemployment  rate fell unexpectedly to 7.6% from 7.7% but this was achieved thanks to the sharp drop in the participation rate to 63.3%, the lowest since 1979. The recent flow of weak data in the job market could be related to Washington’s austerity measures, badly affecting hiring in the US market.  Will the US market return to growth in the coming months?  Let’s Start

  1. Ben Bernanke speaks: Monday, 23:15. Chairman Ben Bernanke is scheduled to speak at the Federal Reserve Bank of Atlanta 2013 Financial Markets Conference in Stone Mountain, where he may talk about the advantages of the low-interest-rate policies in helping growth in the US and around the world, as well as lowering US unemployment rate to 6.5%.
  2. US FOMC Meeting Minutes: Wednesday, 18:00.  No changes were announced in the recent Fed meeting, making the minutes more interesting. The previous releases showed the variety of thoughts in the FOMC, and the media focused on the hawkish voices. The reaction was a stronger dollar, even though the doves led by Bernanke control the Fed. Will we see the same knee jerk reaction once again? There is a good chance, as the meeting occurred before the recent jobs report.
  3. US Federal Budget Balance: Wednesday, 7:00. Despite the relatively high deficit, things are looking up for the US budget balance. Tax revenue is up and spending growth is slowing as the government’s deficit is coming down. February is typically a high deficit month, with low receipts, the balance showed a $203.5 billion deficit, however this was better than the 208 billion average of the last six years.
  4. Australian employment data: Thursday, 1:30. Australia’s unemployment rate remained unchanged at 5.4% in February, while the job market added 71,500 positions, reaching 11,628,300 in February. Full-time employment rose 17,800 to 8,117,400 in February while part-time employment was up 53,700 to 3,510,800. A contraction of 78,200 jobs is expected, while unemployment rate is predicted to remain unchanged.
  5. US Unemployment Claims: Thursday, 12:30. The number of Americans filing initial jobless claims surged last week by 28,000 to 385,000, rising for the third straight week. This rise increased the four-week average to 354,250.A Labor Department spokesman said the reading might have been the figures may have been affected by the Easter holiday. However, the recent increases could also imply that companies are starting to cut  jobs, probably due to the steep government spending  cuts that began on March 1.  A drop to 362,000 is predicted this time.
  6. US Retail sales: Friday, 12:30 U.S. retail sales advanced solidly in February, rising 1.1%, following 0.4% rise in January amid an increase in automobile sales, indicating a strong retail sales reading in the first quarter. Economists expected a lower reading of 0.5%. Meanwhile Core sales excluding Automobiles, retail sales increased 1.0%, from a 0.4% advance in January. Retail sales are expected to remain unchanged, while Core sales are forecasted to gain 0.2%.
  7. US PPI: Friday, 12:30. Producer prices in February climbed by 0.7%, the strongest reading in five months amid a sharp rise in gasoline prices. The reading was in line with market predictions, following a 0.2% advance in January. However, underlying inflation pressures remained contained, with wholesale prices excluding volatile food and energy costs rising 0.2% after a similar advance in January. Producer prices  are expected to fall 0.1%.
  8. UoM Consumer Sentiment (first release): Friday, 13:55. Consumer sentiment plunged in March to 71.8 from 77.6 in January, the lowest reading in over a year. Many responders were not happy with the government’s inability to deal with its finances.  The one-year inflation expectation held steady at 3.3% and the five-to-10-year inflation outlook dropped to 2.9% from 3%. A rise to 78.8 is forecasted.
  9. Ben Bernanke speaks: Friday, 16:30. Federal Reserve Chairman Ben Bernanke will speak in Washington DC. His words cause volatility in the markets.

*All times are GMT.

That’s it for the major events this week. Stay tuned for coverage on specific currencies. You may be interested in the top 5 predictable currencies list for Q2.

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