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The dollar was slashed in the past week, losing big time to almost every currency, apart from the yen. Will these major breakouts hold? We have important data in Britain and Germany, a rate decision in Canada and key inflation figures among other major market movers this week. Here’s an outlook for the key events to watch out for.

The European rate hike drew a lot of attention in the past week, but it was quickly replaced by the scary headlines of a US government shutdown. Together with higher oil prices, the dollar found itself face down to the mud. Apart from the regular events, we have G7 meetings on Thursday and G20 on Friday. No deal is on the agenda, but comments from senior officials can sure move currencies. Stay tuned. OK, let’s start:

  1. British CPI: Tuesday, 8:30. Inflation in Britain is above target for a very long time, and the BoE has yet to move. The headline figure, CPI is expected to remain at an annual pace of 4.4% exactly like last month. This figure surprised in recent months, and also producer prices unexpectedly jumped. A rise to 5% will make a rate hike imminent in May, and will send the pound higher.
  2. German ZEW Economic Sentiment: Tuesday, 9:00. This all-important survey is considered a good barometer for the mood in Europe’s powerhouse. After rising back to positive territory a few months ago, it climbed but then retreated again. Also now, it’s expected to slide from 14.1 to 12.2 points. A rise above 20 will help the Euro. The negative consequences of the rate hike could also be reflected here, as they did last time.
  3. US  Trade Balance: Tuesday, 12:30. The US trade deficit remained high in recent months, and reached 46.3 billion last month. It’s now expected to squeeze to 44.1 billion. Only a dip below 40 will help the embattled greenback.
  4. Canadian rate decision: Tuesday, 13:00. The Bank of Canada isn’t likely to join the ECB and will likely leave the interest rate unchanged at 1%. Yet the words of the accompanying statement, hinting about future policy, are likely to rock the loonie. Any comments about the price of oil will impact other currencies as well. The Canadian dollar advanced a lot.
  5. British employment data: Wednesday, 8:30. After we’ll probably get a motivation to raise the rates in Britain, a reminder of the gentle economic situation there is due afterwards. The most fresh figure,  Claimant Count Change, is believed to show a small dip in the number of unemployed people, yet this indicator disappointed too many times in the past. Unemployment rate is likely to remain unchanged at 8%.
  6. US Retail Sales: Wednesday, 12:30. This important US consumer barometer hasn’t been as upbeat as manufacturing PMIs, but it’s also showing positive signs. A rise of 0.6% is predicted for the headline number (after 1% last month) and a rise of 0.7% is due in the core figure – exactly like last time.
  7. US  Unemployment Claims: Thursday, 12:30. The weekly indicator of the US labor market (that has been a good gauge towards the NFP has stabilized at lower levels, between 380 to 390K in the past few weeks. It’s now expected to tick down to 379K. A dip under 350K will help the dollar, while a rise above 420K will trigger worries.
  8. US  PPI: Thursday, 12:30. Producer prices surprised last month with a big jump of 1.6%, yet a similar jump wasn’t seen in CPI. A more modest rise of 1.1% is expected now. The headline PPI also reflects rises in commodity prices, while Core PPI is expected to continue being very solid at 0.2%.
  9. US  CPI: Friday, 12:30. The rises in commodity prices are likely to push CPI to a stronger rise of 0.6%, instead of 0.5% – not a big difference. A rise of over 1% will boost the greenback on intensified pressure for rate hikes. Core CPI is expected to reflect the sluggish US economy, with another insignificant rise of 0.2%.
  10. US TIC Long-Term Purchases:  Friday, 13:00. This indicator is sometimes thought to indicate trust in the US economy, as it reflects inflows of cash. A similar figure to last month’s 51.5 billion is expected now.
  11. US Consumer Sentiment: Friday, 13:55. Last but not least, the University of Michigan is expected to show a small improved in consumer sentiment, from 67.5 to 68.8. A drop will send the greenback to a negative end of the week.

* All times are GMT.

That’s it. Have a great weekend!

Forecasts for specific currencies will be released during the weekend.

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