The EUR and GBP turned higher against the USD on Friday after a weaker-than-forecast US nonfarm payrolls report for March fuelled fears that the recovery in the labor market is losing momentum. The US economy added 88,000 jobs last month, the smallest increase since last June and far below forecasts for an increase of 200,000. Unemployment rate ticked down to 7.6% from 7.7% in February. The euro rose to two-week highs of 1.3039 before settling at 1.3004 against the USD. The pound rose to six-week highs of 1.5364, before settling at 1.5344 against the dollar. The JPY was down sharply after plunging in the previous session when the Bank of Japan aggressively stepped up monetary easing measures aimed at combating deflation. USD/JPY hit session highs of 97.83 before settling at 97.53. EUR/JPY advancing to session highs of 127.30, before settling at 126.83.
In the week ahead, investors will be awaiting Wednesday’s minutes of the Federal Reserve’s March policy meeting, amid speculation over when the central bank may begin to wind down its asset purchase program. Market participants will also be watching data on industrial production from Germany and the euro zone amid concerns over the deteriorating economic outlook for the region.
Monday, April 8
Japan is to release official data on the current account, which is linked to currency demand. In the euro zone, Germany is to produce official data on industrial production, a leading economic indicator. Later Monday, the Bank of Canada is to publish its quarterly business outlook survey.
Tuesday, April 9
Both Australia and New Zealand are to release private sector reports on business confidence, a leading indicator of economic health. China is to produce official data on producer price inflation and consumer price inflation, which accounts for a majority of overall inflation. The BoJ is to publish the minutes of its most recent policy meeting. The minutes give investors important insights into economic conditions from the bank’s perspective. Switzerland is to release official data on consumer inflation and retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. The UK is to publish official data on manufacturing production and the trade balance, the difference in value between imports and exports. Canada is to release government data on building permits, the leading indicator of future construction activity. Federal Reserve Chairman Ben Bernanke is to speak; his comments will be closely watched for indications of the future possible direction of monetary policy.
Wednesday, April 10
Australia is to release data on consumer sentiment, a leading economic indicator. In the euro zone, France is to publish official data on industrial production. The Federal Reserve is to publish the minutes of its most recent policy meeting. The minutes give investors important insights into economic conditions from the bank’s perspective. The US is also to release government data on the federal budget balance.
Thursday, April 11
Japan is to produce official data on core machinery orders, a leading indicator of production. Australia is to publish government data on the change in the number of people employed and the unemployment rate. The ECB is to release its monthly bulletin, which outlines the economic outlook from the bank’s perspective. Meanwhile, Italy is to hold an auction of 10-year government bonds. Canada is to produce official data on new house price inflation, a leading indicator of demand in the housing market. The US is to publish the weekly government report on initial jobless claims and official data on import prices.
Friday, April 12
Japan is to release official data on tertiary industry activity, a leading economic indicator. The euro zone is to produce official data on industrial production. The US is to round up the week with official data on retail sale, producer price inflation and business inventories, as well as preliminary data from the University of Michigan on consumer sentiment. Also Friday, Fed Chairman Ben Bernanke is to speak; his comments will be closely watched for indications of the future possible direction of monetary policy.
EasyForexNews Research Team