Forex News – Yellen, BOJ, UK unemployment and Eurozone flash PMIs in week ahead
February 14, 2014 3:06 pm
Looking ahead it will be a relatively busy week, with important events and releases for the Japanese yen, the British pound and the euro. Strangely enough it will perhaps not be as important for the US dollar although some US events will need to watched.
The week will start relatively quietly as Monday is a holiday in the United States. The most important data will come out of Japan, with preliminary 4th quarter GDP. This will be the last of the fourth quarter GDP data with respect to the major economies, as the US, China, the Eurozone and the UK have already announced their figures. On Tuesday, there will be a Bank of Japan monetary policy committee meeting and a press conference by Governor Kuroda. The BOJ’s outlook with respect to inflation and the prospects of the Japanese economy for 2014 will be closely looked at. Lately there has been less talk in the market about the possibility of additional easing by the Bank of Japan. The other important release for the Japanese economy is the trade balance figure for January.
With respect to the UK pound, which made fresh 3-year highs versus the dollar after the release of the Bank of England’s quarterly inflation report, UK unemployment on Wednesday will be keenly watched – even though its significance has been somewhat downgraded after the scrapping of the 7% forward guidance rule. There will be some more news from the Bank of England as the minutes from the latest policy meeting will be released on Wednesday too. UK inflation on Tuesday as well as January’s retail sales to be released on Friday could also impact sterling.
The euro has also been strong recently as data have been pointing to a continued – although slow – economic recovery in the region. The flash February PMI business survey results for France, Germany as well as the Eurozone as a whole, will be closely looked at as they are a forward-looking set of indicators. The PMIs are due to be released on Thursday. The PMIs for January surprised on the upside and the euro rallied as a result, so it will be very interesting to watch the release of the numbers for February. The European Commission’s economic forecasts on Friday will also attract attention, as will Tuesday’s ZEW investor survey for Germany and Thursday’s Eurozone consumer confidence.
Finally, as said previously, it is expected to be relatively quiet for the US dollar. Inflation could be gaining in importance for monetary policy makers in the United States and elsewhere if economic growth improves (as it is expected to do in 2014) so Thursday’s CPI for January will attract some attention. Some housing-related statistics could also be important, such as building permits, housing starts (both Wednesday) and existing home sales (Friday). Round 2 of Fed Chair Janet Yellen’s testimony has been postponed until Thursday. The second day of the testimony is usually less exciting, unless the Fed Chair wishes to tweak the message of the first day. Overall it is unlikely that next week’s economic news will provide substantial help to the dollar.
Towards the end of the week, the G20 meeting of Finance Ministers and Central Bankers will begin in Sydney, Australia, in order to prepare for the full leaders’ summit later in the year. This type of summit can usually feature some news about currencies, but generally it reaffirms the willingness to let markets set exchange rates. It will be interesting if some comments are made with respect to emerging markets.
Looking ahead it will be a relatively busy week, with important events and releases for the Japanese yen, the British pound and the euro. Strangely enough it will perhaps not be as important for the US dollar although some US events will need to watched.
The week will start relatively quietly as Monday is a holiday in the United States. The most important data will come out of Japan, with preliminary 4th quarter GDP. This will be the last of the fourth quarter GDP data with respect to the major economies, as the US, China, the Eurozone and the UK have already announced their figures. On Tuesday, there will be a Bank of Japan monetary policy committee meeting and a press conference by Governor Kuroda. The BOJ’s outlook with respect to inflation and the prospects of the Japanese economy for 2014 will be closely looked at. Lately there has been less talk in the market about the possibility of additional easing by the Bank of Japan. The other important release for the Japanese economy is the trade balance figure for January.
With respect to the UK pound, which made fresh 3-year highs versus the dollar after the release of the Bank of England’s quarterly inflation report, UK unemployment on Wednesday will be keenly watched – even though its significance has been somewhat downgraded after the scrapping of the 7% forward guidance rule. There will be some more news from the Bank of England as the minutes from the latest policy meeting will be released on Wednesday too. UK inflation on Tuesday as well as January’s retail sales to be released on Friday could also impact sterling.
The euro has also been strong recently as data have been pointing to a continued – although slow – economic recovery in the region. The flash February PMI business survey results for France, Germany as well as the Eurozone as a whole, will be closely looked at as they are a forward-looking set of indicators. The PMIs are due to be released on Thursday. The PMIs for January surprised on the upside and the euro rallied as a result, so it will be very interesting to watch the release of the numbers for February. The European Commission’s economic forecasts on Friday will also attract attention, as will Tuesday’s ZEW investor survey for Germany and Thursday’s Eurozone consumer confidence.
Finally, as said previously, it is expected to be relatively quiet for the US dollar. Inflation could be gaining in importance for monetary policy makers in the United States and elsewhere if economic growth improves (as it is expected to do in 2014) so Thursday’s CPI for January will attract some attention. Some housing-related statistics could also be important, such as building permits, housing starts (both Wednesday) and existing home sales (Friday). Round 2 of Fed Chair Janet Yellen’s testimony has been postponed until Thursday. The second day of the testimony is usually less exciting, unless the Fed Chair wishes to tweak the message of the first day. Overall it is unlikely that next week’s economic news will provide substantial help to the dollar.
Towards the end of the week, the G20 meeting of Finance Ministers and Central Bankers will begin in Sydney, Australia, in order to prepare for the full leaders’ summit later in the year. This type of summit can usually feature some news about currencies, but generally it reaffirms the willingness to let markets set exchange rates. It will be interesting if some comments are made with respect to emerging markets.
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