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The US dollar retreated for the second week in a row, despite some return of fear to the markets. Will it continue dropping, or reverse? Ben Bernanke’s speech, US housing data and Canadian GDP are the major events lined up this week. Here is an outlook on the main market-movers for the next seven days.

Last week confirmed the growth trend in the US housing market with a 3-1/2 year record of 717,000 units in February, well above the 690,000 units predicted. The good news continued as US Unemployment claims continued to drop’  going below 350K reaffirming the positive turning point in the US job market with a nearly four year low of 348,000 claims. In Europe, signs of a deeper recession were seen, and also Chinese data was more worrying. Can the US carry the world on its own?

  1. German Ifo Business Climate: Monday, 8:00. German business confidence continued to rise for the fourth straight month reaching 109.6 in February from 108.3 in January, broadly in line with analyst’s predictions of a 108.8 reading. This growth trend suggests the German economy is expanding and is not affected by financial hardships of other EU countries.  A minor rise to 109.7 is expected.
  2. Ben Bernanke speaks: Monday, 12:00. Ben Bernanke, head of the Federal Reserve, will speak at the Association for Business Economists 2012 Policy Conference, inArlington. In his last speech before the Independent Community Bankers of America he noted that the American economy is improving despite financial uncertainties. Bernanke always shakes the markets.
  3. US Pending Home Sales: Monday, 14:00. The number ofU.S. home purchases ticked up in January to the highest level since April 2010, rising by 2.0% after a 1.9% drop in the previous month. Economists predicted a smaller rise of 1.1%. Improved market conditions contributed to the recovery in the housing market. An increase of 1.0% is predicted now.
  4. US CB Consumer Confidence: Tuesday, 14:00. U.S. consumer sentiment surged in February, rising to the highest level since February to 70.8 from61.5 in January. This unexpectedly high reading suggests consumers are optimistic regarding current financial conditions. A small decline to 70.5 is anticipated this time.
  5. US Unemployment Claims: Thursday, 12:30. Jobless claims dropped last week to the lowest level since 2008 confirming the recovery in the U.S. economy by dropping to 348,000 from353,000 in the previous week, beating predictions of 353,000 claims. The recovery in the job market is expected to boost the US economy into full recovery. A rise to 351,000 is expected.
  6. Canadian GDP: Friday, 12:30. The Canadian economy expanded more than expected, rising 0.4% in December following the unexpected contraction of 0.1% in November. This reading was better than the 0.3% rise anticipated by analysts. On a yearly base, GDP expanded 1.8%. A gain of 0.1% is forecasted.

*All times are GMT.

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

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