Daily Management Review

What to Expect This Week: Announcement of Significant Economic Events


On Friday, the dollar fell sharply against major currencies, showing the worst weekly performance over three years against Euro and the largest weekly decline against Yen and Swiss franc in two months, amid concerns about the pace of interest rate hikes in the United States.

The sharp drop in the dollar came amid uncertainty about US monetary policy after the Federal Reserve lowered its estimate of economic growth and inflation on Wednesday, as well as forecasts of interest rate hikes.

Fed’s statement dispelled hopes of the rate hike in the middle of the year, prompting investors to close opened positions, based on the rise in the dollar.

On Friday evening, EUR / USD pair rose on 1.52% to 1.0820. For the week, Euro rose by 3.2%, showing the largest increase since October 2011.

In late trade, the pair USD / JPY fell by 0.64% to 120.03, ending the week with decline to 1.06%. Pair USD / CHF fell by 1.54% to 0.9747, down for the week by 3.16%.

USD index, showing ratio against a basket of major currencies,ended the week lower at 2.53%, posting the biggest weekly decline since October 2011.

Commodity currencies also strengthened against US dollar on Friday. AUD / USD rose 1.63% to 0.7774, the pair NZD / USD rose 2.04% to 0.7565 and the pair USD / CAD fell by 1.3% to 1.2551.

Despite the sharp decline last week, Dollar is likely to continue to strengthen its position, because is still expected that the Fed will raise interest rates earlier than other central banks.

This year, Euro has fallen by about 10% against Dollar since the program of quantitative easing, size of a trillion euros, was launched by the European Central Bank earlier this month, hampering Euro’s growth.

Next week, on Tuesday, investors will focus all their attention on the inflation report in the United States after last week's Federal Reserve Chairman Janet Yellen warned that strong dollar significantly reduces the rate of inflation.

Data on business activity and significant events likely to affect the markets in the euro area for will also be in the spotlight.

Monday, March 23

UK release index of industry orders from the Confederation of Industrialists.

US to publish the report on home sales in the secondary market.

Tuesday, March 24

China will release PMI for the manufacturing of HSBC (LONDON: HSBA).

Eurozone will release Purchasing Managers Index for the manufacturing and service sectors, while France and Germany will also release separate reports.

Both UK and US will publish a report on consumer inflation.

US is also to publish data on housing sales in the primary market.

Later, New Zealand reported trade data.

Wednesday, March 25

In the euro area, Ifo Institute for Economic Research will report data on the conditions of the business environment in Germany.

United Kingdom to release a report on the volume of mortgage lending and retail sales.

US to publish data on orders for durable goods.

Thursday, March 26

Gfk market research group will publish a report on consumer climate in Germany.

The euro zone to publish data on the volume of lending to the private sector and changes in M3 money supply.

UK will release data on retail sales.

Later, the head of the Bank of Canada Stephen Poloz will speak; his comments will be in the spotlight.

Friday, March 27

Japan will release a series of economic reports, including data on household expenditure, inflation, unemployment and retail sales.

US to round up the week with final data on economic growth in the fourth quarter and revised University of Michigan data on consumer sentiment.

source: Investing.com

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