Forex - Weekly outlook: April 15 - 19

Investing.com - The yen rebounded against the dollar on Friday, recovering from four-year lows as weak economic data out of the U.S. underlined expectations that the Federal Reserve will stick with its quantitative easing program.

The dollar tumbled against the yen after official data showed that U.S. retail sales fell 0.4% in March, the largest decline in nine months and missing expectations for a 0.1% increase.

A separate report showed that the preliminary reading of the University of Michigan’s consumer sentiment index fell to 72.3 in April, the lowest level since July, from a final reading of 78.6 in March.

USD/JPY hit session lows of 98.10, before settling at 98.37, down 1.30% for the day and 0.98% lower for the week.

The dollar had hit a high of 99.93 against the yen on Thursday, the highest level since April 2009.

The yen’s rebound reversed some of the sharp falls in the currency since the Bank of Japan unveiled unprecedented monetary stimulus measures aimed at beating deflation in the world’s third largest economy on April 4.

The dollar gained more than 6% against the yen since the BoJ pledged to double its asset purchase program over the next two years and extend the maturities of the bonds it purchases.

The dollar’s rally paused before the psychologically important 100.00 yen level, but expectations that the yen would continue to weaken in the long term remained intact.

The euro ended the day little changed against the dollar on Friday as the single currency shrugged off data showing that industrial production in the euro zone fell more than expected in February.

EUR/USD hit session highs of 1.3127, before settling at 1.3111, edging up 0.07% for the day and rising 0.62% for the week.

The euro fell sharply against the yen on Friday, pulling back from 39-month highs, with EUR/JPY down 1.23% to settle at 128.97, 0.35% lower for the week.

In the coming week, the U.S. is to publish a broad range of economic data, with reports on manufacturing activity, the housing sector and inflation due for release. Investors will be closely watching this data as they attempt to gauge the strength of the U.S. recovery.

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

Monday, April 15

China is to release official data on first quarter gross domestic product, the broadest indicator of economic activity and the leading measure of the economy’s health. Beijing is also to release government data on retail sales, industrial production and fixed asset investment.

Australia is to produce official data on home loans, a leading indicator of demand in the housing market.

Elsewhere, BoJ Governor Haruhiko Kuroda is to speak at an event in Tokyo; his comments will be closely watched for indications on the future possible direction of monetary policy.

The U.S. is to publish data on manufacturing activity in New York state, a leading economic indicator.

Tuesday, April 16

The Reserve Bank of Australia is to release the minutes of its most recent policy setting meeting, which contain important insights into economic conditions from the bank’s perspective.

Switzerland is to publish official data on producer price inflation, a leading indicator of consumer inflation.

The U.K. is to produce official data on consumer price inflation, which accounts for the majority of overall inflation, as well as data on producer and retail price inflation.

The euro zone is also to publish official data on consumer inflation, while the ZEW Institute is to release its closely watched report on German economic sentiment, a leading economic indicator.

Canada is to produce official data on manufacturing sales, as well as data on foreign securities purchases.

The U.S. is to publish official data on building permits, an excellent indicator of future construction activity and on housing starts. The U.S. is also to release data on consumer inflation, industrial production and the capacity utilization rate.

Wednesday, April 17

New Zealand is to release official data on consumer inflation.

The U.K. is to publish official data on the change in the number of people claiming unemployment benefits and the unemployment rate. Meanwhile, the Bank of England is to publish its monetary policy meeting minutes.

Switzerland is to publish a report on ZEW economic expectations.
Elsewhere in Europe, Germany is to hold an auction of 10-year government bonds.

The Bank of Canada is to announce its benchmark interest rate. The announcement is to be accompanied by the bank’s monetary policy report, which contains important insights into the economic outlook. The central bank is to hold a press conference to discuss the monetary policy decision after the rate announcement.

Thursday, April 18

Japan is to publish official data on the trade balance, the difference between imports and exports.

The National Australia Bank is to publish its quarterly report on business confidence, a leading economic indicator.

The U.K. is to publish official data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.

In the euro zone, France and Spain are to hold auctions of 10-year government bonds.

The U.S. is to release the weekly government report on initial jobless claims as well as data on manufacturing activity in Philadelphia.

Friday, April 19

The euro zone is to release official data on the current account, while Germany is to produce government data on producer prices.

Canada is to produce official data on consumer inflation, as well as a report on wholesale sales, a leading indicator of consumer spending.