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Weekly outlook: June 12 - 16

6/12/2017, 9:52:47 AMBasics of Trading
Weekly outlook: June 12 - 16

 The dollar rose against a basket of the other major currencies on Friday as the pound remained sharply lower after British Prime Minister Theresa May’s Conservative Party unexpectedly lost its majority in parliament in a national election.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.3% to 97.24 late Friday after touching an almost two-week high of 97.47 earlier.

The index plumbed seven-month lows earlier in the week amid caution ahead of former FBI Director James Comey's testimony and the UK election.

On Thursday, Comey accused President Donald Trump of firing him in a bid to undermine a probe into Russia’s alleged involvement in the U.S. presidential election, but did not say whether he thought the president attempted to obstruct justice.

The pound was sharply lower, with GBP/USD at 1.2746 in late trade, off 1.59% for the day, after tumbling to an eight-week trough of 1.2634 earlier.

The shock UK election result added to political risks surrounding the upcoming Brexit negotiations, due to start on June 19.

Sterling found some support from reports that May was seeking a deal to form a government with support from Northern Ireland’s Democratic Unionist Party, known as the DUP.

The euro was a touch lower against the dollar, with EUR/USD slipping 0.13% to 1.1194 a day after the European Central Bank cut its inflation forecasts, but dropped its guidance that interest rates may be cut again.

The Canadian dollar gained ground against its U.S. counterpart, with USD/CAD down 0.3% to 1.3468 in late trade as upbeat domestic jobs data fueled expectations that the Bank of Canada could raise interest rates sooner than anticipated.

Meanwhile, the Mexican peso rose to almost 10-month highs, with USD/MXN down 0.16% to 18.1684 as higher prices for oil bolstered the currencies of emerging market economies.

In the week ahead, investors will be turning their attention to Wednesday’s Federal Reserve policy meeting, where the central bank is widely expected to deliver its second rate hike so far this year.

Markets will also be watching central bank meetings in the UK, Japan and Switzerland.

Ahead of the coming week, has compiled a list of these and other significant events likely to affect the markets.

Monday, June 12

Financial markets in Australia will be closed for a holiday.

Tuesday, June 13

Australia is to release private sector data on business confidence.

The UK is to publish its monthly inflation report.

The ZEW Institute is to report on German economic sentiment.

The U.S. is to produce data on producer price inflation.

Wednesday, June 14

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

The UK is to publish its monthly employment report.

The U.S. is to produce reports on retail sales and inflation.

The Fed is to announce its latest interest rate decision and will release its latest forecasts for economic growth and interest rates, known as the "dot-plot". Fed Chair Janet Yellen will hold a press conference following the rate announcement.

Thursday, June 15

New Zealand is to release quarterly data on gross domestic product.

Australia is to publish its monthly employment report.

The Swiss National Bank is to announce its Libor rate and publish its latest monetary policy assessment.

The UK is to report on retail sales figures.

The Bank of England is to announce its benchmark interest rate and publish a summary of its meeting, outlining the economic conditions and the factors affecting its policy decision.

Canada is to release data on manufacturing sales.

The U.S. is to release a string of reports, including on jobless claims, industrial production, import prices and manufacturing activity in both New York and Philadelphia.

Friday, June 16

New Zealand is to release data on manufacturing activity.

The Bank of Japan is to announce its benchmark interest rate and publish its policy statement.

The euro zone is to release revised inflation data.

The U.S. is to round up the week with data on building permits, housing starts and consumer sentiment.