The US dollar made a big retreat for a second week in a row. Will it continue falling? The Non-Farm Payrolls release is the highlight of a very busy week, which includes many figures from the US . Here is an outlook on the main market-movers coming our way.
Ben Bernanke weakened the dollar with an extended pledge for low rates: until late 2014. and a hint about the possibility of a third round of QE. While the US economy grew at a higher pace than in previous quarters, the pace is still moderate and seems insufficient for convincing the Federal Reserve to stop easing. PMIs and job figures are also an important part of the composition of the decision, and we’ll get fresh data now. Let’s start:
- Canadian GDP: Tuesday, 13:30. Canada’s gross domestic product was flat in October, after four month climb. Wholesale trade and tourism-dropped while the housing sector expanded. This weak reading may indicate a slowdown in the fourth quarter. GDP is expected to grow by 0.2%.
- US CB Consumer Confidence: Tuesday, 15:00. U.S. consumer confidence increased more-than-expected in December, climbing to 64.5 from 55.2 in the previous month suggesting improved market conditions. Economists predicted a climb to 58.2. A further increase to 68.4 is predicted now.
- US ADP Non-Farm Employment Change: Wednesday, 13:15. ADP Non-Farm Payrolls registered a climb of 325,000 jobs in the private sector during December after204,000 in November. This reading was considerably higher than the 176,000 anticipated by analysts suggesting a real and positive shift in the US job market. A job addition of 193,000 is forecasted.
- US ISM Manufacturing PMI: Wednesday, 15:00. U.S. Manufacturing ISM report increased again to 53.9 in December following 52.7 in the previous month. This reading was a bit higher than the 53.3 increase expected. These continuous climbs indicate growth in the manufacturing sector. A further rise to 54.6 is expected now.
- New Zealand employment data: Wednesday, 21.45.New Zealand’s unemployment rate increased against prediction to 6.6% in the third quarter ending in September 30 while analysts expected a decline to 6.4%. This reading followed a 6.5% unemployment rate in the previous quarter. Meanwhile the Job market expanded by 0.2% to 2.22 million in the three months ended Sept. 30 lower than the 0.5% rise anticipated by analysts and following 0.1% increase in the previous queerer.
- Australian Trade Balance: Thursday, 0:30.Australia’s trade surplus contracted in November to $1.38 billion following $1.42 billion in October. This reading was lower than the $1.68 billion surplus predicted. Analysts predict trade balance will reach deficits in 2012 due to the global slowdown. A further decrease in trade surplus to $1.23 billion is predicted.
- US Unemployment Claims: Thursday, 13:30. The number of U.S. citizens filing new claims for jobless benefits spiked last week to 377,000 from 356,000 in the week before. This reading was higher than the 371,000 anticipated but economists claim that unemployment figures tend to be volatile at the beginning of the year and the general trend is still positive. A drop to 371,000 is expected now.
- Ben Bernanke speaks: Thursday, 15:00.Bern Bernanke, Chairman of the Federal Reserve is scheduled to testify at the house budget committee, in Washington DC. His words rock the markets. He will be probably be grilled about the intentions to expand the quantitative easing program.
- Canadian employment data: Friday, 12:00. The Canadian job market gained 17,500 jobs despite losing 26,000 full time positions casing unemployment rate to spring to 7.5% from 7.4% in the previous month. The labor market registered job gains in the first 6 months of 2011 while the following 6 months showed scant improvement. An increase of 23,500 new positions is expected with the same unemployment rate of 7.5%.
- US Non-Farm Employment Change: Friday, 13:30. US Non-farm payrolls ticked up nicely to 200,000 in December following 100,000 in the previous month. This reading exceeded the 152,000 forecast made by analysts strengthening notions of a real recovery in the US market. An addition of 156,000 positions is expected now.
- US Unemployment Rate: Friday, 13:30. Following the encouraging 200,000 job addition in the Non-Farm payrolls during December,US unemployment rate dropped to 8.5% from 8.7% in the prior month. American companies recruited more than 3 million of the 4.2 million private-sector jobs released the past 13 months. The service and manufacturing sectors expanded giving a boost to the US economy. No change is forecasted.
- US ISM Non-Manufacturing PMI: Friday, 15:00.U.S. non-manufacturing ISM report showed an increase to 52.6 in December from52 in November. This reading was a bit lower than the 53 predicted by analysts. The main increase was in Retail Trade and Professional, Scientific & Technical Services. A rise to 53.2 is predicted now.
That’s it for the major events this week. Stay tuned for coverage on specific currencies.
*All times are GMT.
- 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 Zealand dollar (kiwi), read the NZD forecast.
- For USD/CAD (loonie), check out the Canadian dollar
- For the Swiss Franc, see the USD/CHF forecast.