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The US dollar made a strong run  during the week, but the gains were undone towards the end. US housing data and unemployment claims are the highlight of this week. Here is an outlook on the major events shaping this week’s Forex trading.

The FOMC Statement contained no hints of QE3 and also notions of higher employment and inflation. This sent the dollar higher across the board, and broke correlations, although it didn’t last. It was later, a  series of positive US figures reconfirmed a real recovery process in the US economy. All in all these are positive figures for the US economy. Will this upbeat trend continue? In Europe, the second bailout for Greece was finally approved by the Eurogroup and the IMF. This front will likely be quiet, but not for too long.

  1. UK Inflation data: Tuesday, 9:30. Inflation in the  UK  continued to decline in January reaching 3.6% from 4.2% in December. This reading was in line with predictions but still higher than the 2.0% BoE’s target rate. A further drop to 3.4% is expected now.
  2. US Building Permits: Tuesday, 12:30. The number of building consents issued in the U.S. increased in January to 0.68 million, in line with expectations following the same figure in the previous month suggesting a growth trend in the housing sector. Another rise to 0.69 million is anticipated.
  3. US Existing Home Sales: Wednesday, 14:00.Existing home sales Jumped 4.3% in January to a 4.570 million annual rate, triggered by an average price reduction of 4.6%. The boost in sales decreased house supply which is a good sign for the housing market. Existing home sales is expected to grow further to 4.61million.
  4. NZ GDP: Wednesday, 21:45. The New Zealand economy is in a growth trend since 2009. NZ expanded 0.8% in the third quarter of above the 0.6% growth expected by analysts following 0.1% expansion in the previous quarter. Manufacturing activity increased pushing up the GDP figure. NZ economy is expected to expand 0.6% this time.
  5. US Unemployment Claims: Thursday, 12:30. The number of people filing initial unemployment claims dropped more than predicted last week going down to 351,000 claims, the lowest point in four years suggesting a further improvement in the U.S. job market. The previous reading was 365,000 and Analysts predicted a drop to357,000. A small rise to 355,000 is predicted now.
  6. Canadian inflation data: Friday, 11:00. Consumer price index grew unexpectedly in January with the headline CPI rising 0.4% following 0.6% drop in December and core prices have been also elevated gaining 0.2% after 0.5% decrease on December. The recent rise was due to the increase in energy prices. CPI is likely to add 0.5% while core CPI is predicted to gain 0.2%.
  7. US New Home Sales: Friday, 14:00. New US. home sales dropped in January to 321,000 from324,000 in the prior month but higher than the 316,000 predicted, suggesting the housing sector is improving and the supply of properties is running low. A rise to 326,000 is anticipated this time.

*All times are GMT.

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

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