The US dollar struggled amid further Fed fallouts and the closely watched voted in Congress. German Ifo Business Climate, US CB Consumer Confidence, and GDP data from the US and Canada are the main events on forex calendar. Here is an outlook on the highlights of this week.
Last week US data came out weaker than expected with a 15,000 rise in the number of weekly jobless claims missing predictions for a 6,000 contraction. Furthermore, Durable goods orders excluding transportation rose 0.4% in February, falling short of estimates. Overall capital goods orders rose 2.6% on the month following a 5.2% gain in January. Markets were watching the political deliberations in Congress regarding Trump-care. The Republicans eventually pulled the bill and accepted that Obamacare will remain “the law of the land”. Does this political failure undermine Trump’s plans for cutting taxes? Or frees him to pursue this eaiser task? Politics will continue impacting the US dollar. Let’s start,Updates:
- Mar 30, 14:30: US GDP revised to 2.1% – EUR/USD approaches strong: Slightly better than expected GDP read for the US: 2.1%. Personal consumption has also received an upgrade from 3% to 3.5%....
- Mar 30, 9:17: Technical levels for majors and crosses – Closing Q1: Lines of support and resistance for the major pairs: EUR/USD, GBP/USD, USD/JPY, USD/CAD, AUD/USD, NZD/USD and USD/CHF. Lines of resistance...
- Mar 29, 13:30: Wrap-up: Pound falls on Brexit Day [Video]: The UK is officially leaving the EU today and the EU’s reported tough stance is not helpful to her majesty’s...
- Mar 29, 8:05: Brexit Day – Live Market Open from 7:00 GMT: Spring is here and the UK is leaving the EU. Article 50 is triggered today, beginning the long negotiations process....
- Mar 28, 17:06: US consumer confidence exposes insecure dollar: The US Conference Board Consumer Confidence measure made a huge leap to 125.6 points, far better than 114 that was...
- Mar 27, 18:13: With the ugly DXY break, is the Trump trade over?: The failure of Trump-care was the latest blow to the US dollar. The post-elections rally is unwinding. What’s next? Here are...
- Mar 27, 12:35: Murky markets and further Fed fallout – MM #139: The Ides of March continue echoing and echoing. We discuss further fallouts from the Fed and move to on markets,...
- Mar 27, 0:17: The week ahead: Quarter ends with GDP reads and: The last week of March features the normal end-of-quarter adjustments. Which currencies will come out on top? The time-shift in...
- German Ifo Business Climate: Monday, 8:00. German business confidence improved in February, strengthening the central bank’s projection that economic growth strengthened at the start of the year. Ifo Business Climate advanced to 111 from a revised 109.9 in January beating estimates of 109.6. Current economic conditions edged up to 118.4 from 116.9, and future expectations advanced to 104 from 103.2. German economy expanded at the fastest pace in five years and is expected to continue this trend in 2017, despite uncertainty in the EU block. Yet the country is facing political uncertainty amid the elections scheduled for September where Chancellor Angela Merkel is facing the Social Democratic party which gained momentum in the last few months. German business confidence is expected to rise further to 111.2 in March.
- US CB Consumer Confidence: Tuesday, 14:00. US Consumers’ moral increased to 114.8 in February, reaching the highest reading since July 2001. Economists expected the Index to hit 111 in February. Current business conditions increased compared to January. Overall, consumers expect the economy to continue expanding in the coming months. Consumers also expect the labor market will continue its tightening. Consumer confidence is estimated to reach 113.9 this time.
- Stephen Poloz speaks: Tuesday, 15:10 Bank of Canada Governor Stephen Poloz will speak in Oshawa. Earlier this month Poloz warned about the “significant uncertainties” buffeting the Canadian economy in light of Trump’s new policies regarding protectionist and trade tax. Mr. Poloz suggested that a rate cut remains “on the table.” But many economists are convinced the bank’s next move will be a rate increase.
- US Crude Oil Inventories: Wednesday, 14:30. During the week ended Mar. 17, oil prices declined to their lowest since late November, after US crude stocks reached a record high of 5 million barrels. The Sharp gain was in contrast to analysts’ forecast of a 1.9 million increase. An agreement between the Organization of the Petroleum Exporting Countries and some non-OPEC producers to reduce output by 1.8 million barrels per day (bpd) in the first half of 2017 has done little to reduce bulging global oil stockpiles.
- US GDP data: Thursday, 12:30. The U.S. economy expanded 3.5% in the third of 2016, posting the best growth in two years. But in Q4, the economy grew by only 1.9% according to the second release. We will now get the third and final read and a small upgrade to 2% is on the cards.
- US Unemployment Claims: Thursday, 12:30. The number of new job seekers filing claims for unemployment benefits rose to a seven-week high of 258,000 in the week ended March 18, taking the shine off positive employment data recently released. Economists expected an increase of 240,000 claims. The four-week average of claims increased to 240,000 from 239,000 in the prior week.
- UK GDP (final): Friday, 8:30. So far, the UK economy withstood the EU Referendum quite well, enjoying solid growth in Q3 and Q4. According to the second read, the economy grew by 0.7% q/q. This number will probably be confirmed in the last read.
- Canadian GDP: Friday, 12:30. Canadian GDP increased 0.3% in December in line with market forecast. November’s reading was upwardly revised to 0.5% which was originally reported as 0.4% growth. GDP rose 0.6% in the fourth quarter of 2016 following a 0.9% gain in the previous three months. Domestic consumption gained 0.6% for the quarter after a rise of 0.7% in the prior three months. Exports improved, while imports fell sharply. Business investment declined 2.1% following a 0.5% drop in the third quarter and capital spending has declined for nine successive quarters.
That’s it for the major events this week. Stay tuned for coverage on specific currencies
*All times are GMT.
Our latest podcast is titled Murky markets and further Fed fallout
- 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 USD/CAD (loonie), check out the Canadian dollar
- For the Swiss Franc, see the USD/CHF forecast.