Forex - EUR/USD weekly outlook: May 23 - 27
Investing.com
Published May 22, 2016 11:07AM ET
Investing.com - The euro pushed higher against the dollar on Friday, pulling back from seven-week lows hit in the previous session as investors took profits following a rally in the greenback.
EUR/USD was up 0.19% at 1.1223 in late trade, not far from Thursday’s more than seven-week lows of 1.1179. The euro still ended the week down 0.84%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 95.29 late Friday, but was up almost 0.8% for the week.
The dollar strengthened against the other major currencies after Wednesday’s minutes of the Federal Reserve’s April meeting indicated that interest rates could rise as soon as next month.
Officials said a June rate hike would be appropriate if economic data indicated that growth was picking up in the second quarter and employment and inflation were firming.
The U.S. central bank hiked rates in December for the first time in almost a decade.
The dollar received an additional boost as comments by Fed officials suggested that a rate hike could be in the offing.
New York Fed President William Dudley said Thursday the U.S. economy could be strong enough to warrant a rate increase in June or July.
Higher interest rates would make the U.S. dollar more attractive to yield-seeking investors.
Data on Friday showed that U.S. existing home sales rose for a second straight month in April, indicating that the economy gained momentum at the start of the second quarter.
The National Association of Realtors said sales of existing homes increased 1.7% to an annual rate of 5.45 million units.
Economists had forecast home resales rising to a 5.40 million-unit pace last month.
In the week ahead, investors will be looking at Monday’s reports on euro zone private sector activity and Tuesday’s German ZEW data for indications on the strength of the region’s economy.
The U.S. is to publish a revised estimate of first quarter growth on Friday, with analysts expecting an upward revision to economic growth.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, May 23
The euro zone is to release survey data on private sector business activity.
Financial markets in Canada will remain closed for the Victoria Day holiday.
Tuesday, May 24
Reserve Bank of Australia Governor Glenn Stevens is to speak at an event in Sydney.
In the euro zone, the ZEW Institute is to report on German economic sentiment.
The Eurogroup of euro zone finance ministers are to hold talks in Brussels.
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The U.S. is to publish data on new home sales.
Wednesday, May 25
New Zealand is to release data on the trade balance.
The Ifo Institute is to publish data on German business climate.
The Bank of Canada is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision.
Thursday, May 26
Australia is to prelease data on private capital expenditure.
The U.K. is to produce revised data on first quarter growth.
The U.S. is to release reports on durable goods orders, initial jobless claims and pending home sales.
Friday, May 27
Japan is to release data on consumer inflation.
The U.S. is to round up the week with a revised estimate of first quarter growth and revised data on consumer sentiment.
Written By: Investing.com
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