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The dollar edged up in the last week of 2011. US employment data is the highlight of the opening week of 2012, among many other US figures. Trading volume is expected to return to normal after the holiday break. Here is an outlook on the major events at hand.

Last week the EUR/USD plunged to its lowest level since September 2010, following Italy’s failure of raise sufficient funds from its recent bond auction. Italy is likely to become the first EU country to enter recession, increasing concerns in the European continent. Unlike the grim situation in the EU, the US market is doing rather well with satisfactory employment data, elevated consumer sentiment and improved housing figures. Is there hope for a general recovery in 2012?

  1. US ISM Manufacturing PMI: Tuesday, 15:00.U.S. manufacturing sector strengthened in November rising to 52.8 from 50.8 in October amid new orders. This positive figure suggests a growth trend in the US economy compared to the slowdown in Asia and in Europe. Another increase to 53.3 is foreseen .
  2. US FOMC Meeting Minutes: Tuesday, 19:15. No changes were made to the FOMC’s policy in December, for the second time in a row. Apart from one dissenter, we will get to see if other members still pressed for a third round of quantitative easing.
  3. US ADP Non-Farm Employment Change: Thursday, 13:15. The monthly ADP figures showed that U.S. firms added 206,000 employees in November which poses the highest reading this year. The elevated figure was well above the 131,000 increase predicted by analysts and October’s 130,000 addition, suggesting an awakening in the US Job market.   A smaller addition of 177,000 is expected now.
  4. US unemployment Claims: Thursday, 13:30. An unexpected rise occurred in the number of initial claims for unemployment benefits filed last week. The number of claims rose by 15,000 to 381,000, while economists expected a lower figure of 372,000 claims. Nevertheless this reading is still below the 400,000 line suggesting the US labor market is recovering. A drop to 375,000 is predicted now.
  5. US ISM Non-Manufacturing PMI: Thursday, 13:30. ISM  non-manufacturing PMI expanded in November reaching 52, slightly lower, than the 52.9 in October but still above the 50 point line. Economic activity increased mainly in Utilities; landed property, Rental & Leasing; Management of Companies and Support Services. An increase to 53.1 is expected.
  6. Canadian Employment data: Friday, 12:00. The Canadian labor market contracted again in November by 18,600 jobs after a sharp drop of 54,000 jobs in October. The main decline occurred in part time employment while full-time positions increased. Despite the grim numbers, Full time employment gained 43,000 jobs offsetting the negative waves of the part-time jobs losses. The contraction of jobs caused Canada’s unemployment rate to increase by 0.1% reaching 7.4%. An addition of 15,300 jobs is predicted with no change in unemployment rate.
  7.  US Non-Farm Employment Change and Unemployment rate: Friday, 13:30. The U.S. Job market gained 120,000 positions in November and more surprisingly, the unemployment rate to 8.6% from 9.0%. Economists expected a higher figure of 125,000 in November but did not forecast a reduction in the Unemployment rate. A higher addition of 153,000 positions is expected now.

*All times are GMT.

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

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