Forex - Weekly outlook: 12.11 - 12.15
The dollar pared back gains against a basket of the other major currencies on Friday after data showing that while the U.S. economy created more jobs than expected last month wage growth remained muted.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 93.87 late Friday, off an earlier high of 94.08.
The U.S. economy added 228,000 jobs in November, the Labor Department reported, surpassing the 200,000 forecast by economists, while the unemployment rate held steady at 4.1% for a second consecutive month.
Wages rose 0.2% for the month, and 2.5% from a year ago, which was below forecasts of 0.3% and 2.7%, respectively.
The subdued wage data did little to alter expectations for a rate hike by the Federal Reserve at is upcoming meeting this week, but concerns over subdued inflation could prompt the Fed to alter forecasts for future rate increases.
The Fed is widely expected to raise interest rates at this week’s monetary policy meeting and is seen tightening two to three times next year.
The dollar pared back gains against the yen following the data, but was still up for the day, with USD/JPY at 113.47 in late trade.
The euro trimmed losses against the dollar, with EUR/USD last at 1.1774, flat on the day.
The pound ended the day lower against both the dollar and the euro after rising against both currencies earlier in the day amid relief over progress in Brexit talks.
GBP/USD was down 0.6% at 1.3392 late Friday after rising as high as 1.3356 earlier.
EUR/GBP advanced 0.63% to 0.8792 as the sterling relief rally which saw the euro briefly plumb a six-month trough earlier in the day faded.
In the week ahead, investors will be focusing on Wednesday Fed meeting where it is expected to hike rates by a quarter point.
The European Central Bank, Bank of England and the Swiss National Bank are also due to hold monetary policy meetings, although no changes are expected.
Monday, December 11
The U.S. is to release Jolts job opening data.
Tuesday, December 12
Australia is to release reports on house price inflation and business confidence.
The UK is to release inflation data for November.
The ZEW Institute is to produce data on German economic sentiment.
The U.S. is to release data on producer price inflation.
ECB President Mario Draghi is to speak in Frankfurt.
Wednesday, December 13
Reserve Bank of Australia Governor Philip Lowe is to speak at an event in Sydney.
The U.K. is to release its monthly jobs report.
The U.S. is to report on consumer inflation.
The Fed is to announce its benchmark interest rate and publish a rate statement which outlines economic conditions and the factors affecting the monetary policy decision.
Thursday, December 14
Australia is to publish its latest jobs report.
China is to release data on industrial production and fixed asset investment.
The euro zone is to release data on manufacturing and service sector activity.
Switzerland is to publish figures on producer prices and the SNB is to announce its latest monetary policy decision.
The BoE is also to announce its latest monetary policy decision.
The ECB is to announce its latest monetary policy decision. The announcement is to be followed by a press conference with President Mario Draghi.
Canada is to publish data on new house price inflation. Later in the day, Bank of Canada Governor Stephen Poloz is to speak at an event in Toronto.
The U.S. is to report data on import prices.
Friday, December 15
Japan is to publish data on manufacturing and service sector growth.
BoE Chief Economist Andy Haldane is to speak at an event in Italy.
Canada is to report on manufacturing sales.
The U.S. is to round up the week with data on manufacturing activity in the New York region as well a report on industrial production.