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Forex - Weekly Outlook: March 11 - 15

Published 2019-03-10, 07:39 a/m
© Reuters.
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Investing.com - Investors will be looking ahead to a fresh batch of U.S. economic data this week after Friday’s underwhelming U.S. jobs report and disappointing Chinese trade data raised concerns about a slowdown in global economic activity.

Markets will get the latest reading on U.S. retail sales on Monday, which are expected to show another decline in January after an unexpected drop at the end of 2018.

Inflation figures will also be closely watched after the Federal Reserve vowed to be “patient” and await incoming data before raising interest rates again. Data on U.S. consumer and producer prices are set to be released on Tuesday and Wednesday, respectively.

Other key economic reports in focus this week include U.S. new home sales and durable goods. Meanwhile, U.S. President Donald Trump will introduce his 2020 budget proposal on Monday after a delay caused by the government shutdown in January.

Outside the U.S., the British parliament is set to vote on a revised Brexit deal on Tuesday. If the revised deal is rejected lawmakers may vote on Thursday to delay Britain’s exit from the European Union, ahead of the March 29 deadline.

The U.S. dollar was broadly lower on Friday after data showing that the U.S. economy added far fewer workers than forecast in February, while the euro rebounded from a 20-month low tied to the European Central Bank’s dovish shift the day before.

The Labor Department reported a 20,000 increase in nonfarm payrolls last month, far fewer than the consensus forecast of 180,000. But traders were encouraged by the unemployment rate falling back below 4% and average hourly earnings accelerating by 0.4%.

The U.S. dollar index that tracks the dollar against a basket of six currencies was down 0.36% at 97.314 in late trade. It touched 97.710 on Thursday, the highest since Dec. 14. On the week, the index gained 0.8%.

“The dollar sold off mildly. It doesn’t look that bad when you look at the details,” said Peter Ng, senior currency trader at Silicon Valley Bank in Santa Clara, California.

Much of the greenback’s weekly rise stemmed from a dramatic sell-off in the euro on Thursday when the ECB offered a fresh round of cheap loans to banks and pushed back any plan to raise rates into 2020.

The common currency was last at 1.1241, having rebounded from Thursday’s 20-month low of 1.11765.

Ahead of the coming week, Investing.com has compiled a list of significant events likely to affect the markets.

Monday, March 11

In the euro one, Germany is to release data on industrial production and trade.

The U.S. is to publish retail sales figures for January.

Tuesday, March 12

The U.K. is to produce data on GDP growth and manufacturing production. The British parliament is to hold a vote on Prime Minister Theresa May’s Brexit deal.

The U.S. is to report on consumer inflation while Fed Governor Lael Brainard is to speak at an event in Washington.

Wednesday, March 13

In the U.K., the government is to release its annual budget statement.

The U.S. is to publish reports on durable goods orders and producer price inflation.

Thursday, March 14

China is to produce data on fixed asset investment and industrial production.

The U.S. is to release reports in initial jobless claims and new home sales.

Friday, March 15

The Bank of Japan is to announce its benchmark interest rate and publish a rate statement, which outlines economic conditions and the factors affecting the monetary policy decision.

Canada is to release data on manufacturing sales.

The U.S. is to round up the week with reports on industrial production and consumer sentiment.

--Reuters contributed to this report

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