Forex - Weekly outlook: July 11 - 15

Investing.com – The U.S. dollar weakened against its major counterparts on Friday, after June’s disappointing U.S. non-farm payrolls report, while the euro was pressured lower amid concerns over sovereign debt contagion in the single currency bloc.

The Department of Labor said U.S. nonfarm payrolls rose by just 18,000 in June, far below the 89,000 increase forecast by economists, with employers hiring the fewest workers in nine months, while the unemployment rate rose to 9.2%, the highest level this year.

In the euro zone, concerns over Italian sovereign debt flared after shares in Italian bank UniCredit SpA were suspended, a move which saw the cost of insuring Italian debt against default rise sharply.

Meanwhile, the cost of insuring Portuguese, Irish and Greek government debt against default surged to record highs.

The yen and the Swiss franc posted gains against both the dollar and the euro as concerns that the U.S. economic recovery is losing momentum and fears over sovereign debt contagion in the euro zone sparked a flight to safety.

The pound rose sharply against the U.S. dollar on Friday, rebounding from an almost five-month low after the poor jobs data, after weakening on the view that the Bank of England is committed to loose monetary policy and looks unlikely to raise interest rates before next summer.

New Zealand’s dollar ended the week close to a record high against the greenback, while its Canadian counterpart weakened amid fears that growth in its largest trading partner was faltering.

In the week ahead, euro zone finance ministers are to meet to discuss a bailout package for Greece, while the highly anticipated results of European banks’ stress tests are to be released on Friday.

Meanwhile, investors will be looking towards U.S. data on retail sales and consumer prices to gauge the strength of the economic recovery.

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

Monday, July 11

Australia is to publish official data on home loans, a leading indicator of demand in the housing market. Elsewhere, Japan is to release government data on M2 money stock, household confidence and preliminary data on machine tool orders.

In the euro zone, France is to publish official data on industrial production, an important indicator of economic health.

Also Monday, Canada is to publish official data on housing starts, while the country’s central bank is to publish a report on business outlook, a leading indicator of economic health.

Tuesday, July 12

The U.K. is to release industry data on retail sales and house prices, important indicators of economic health. Later in the day, the U.K. is to publish official data on consumer price inflation, which accounts for a majority of overall inflation, as well as a report on the country’s trade balance, the difference in value between imported and exported goods and services over the month.

The Bank of Japan is to announce its benchmark interest rate; the announcement will be followed by a closely watched press conference. Meanwhile, Japan is to release government data on tertiary industry activity, a leading indicator of economic health.

Australia is to release a report on business confidence, an important indicator of economic health.

In the euro zone, finance ministers from the 17-nation shared currency bloc are scheduled to hold a regular meeting in Brussels.

Elsewhere Tuesday, both the U.S. and Canada are to publish official data on their trade balances, while the Federal Reserve is to publish the minutes of the June policy-setting meeting. The minutes give investors a detailed insight into the economic and financial conditions that influenced the interest rate decision.

Wednesday, July 13

Australia is to release a report on consumer sentiment, an important indicator of economic health. Meanwhile, Japan is to publish revised data on industrial production, while the BoJ is to release its monthly report, which outlines the economic data policymakers looked at when making the interest rate decision.

Switzerland is to publish government data on producer price inflation, a leading indicator of consumer inflation. Elsewhere, the U.K. is to produce official data on claimant count change, a leading indicator of economic health, as well as data on average earnings and the unemployment rate.

The euro zone is to publish official data on industrial production, a leading indicator of economic health.

Later in the day, the U.S. is to publish official data on import prices and crude oil inventories, as well as a report on the federal budget balance. In addition, Federal Reserve Chairman Ben Bernanke is to give prepared testimony on monetary policy before lawmakers in Washington.

Thursday, July 14

New Zealand is to publish official data on first quarter gross domestic product, the broadest measure of economic activity and the primary gauge of the economy's health. Meanwhile, Australia is to publish a report on inflation expectations.

In the euro zone, markets in France will remain closed for a national holiday. The European Central Bank is to publish its monthly bulletin, which contains detailed analysis of current and future economic conditions from the bank's point of view. The euro zone is also to publish official data on consumer price inflation, which accounts for a majority of overall inflation.

The U.S. is to release a string of economic data, beginning with a report on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

The country is also to release official data on producer price inflation, a leading indicator of consumer inflation, as well as weekly government data on initial jobless claims. Also Thursday, Fed Chair Ben Bernanke is to deliver the second part of his testimony on monetary policy in Washington.

Friday, July 15

The BoJ is to publish the minutes of its most recent policy setting minutes. The minutes give investors a detailed insight into the economic and financial conditions that influenced the interest rate decision.

The euro zone is to publish official data on its trade balance as well as the results of bank stress tests, which are used to determine the stability of the banking sector.

Canada is to release government data on manufacturing sales, a leading indicator of economic health.

The U.S. is to round up the week with a flurry of economic data, with reports on consumer price inflation, which accounts for a majority of overall inflation. In addition, the U.S. is to publish a report on manufacturing activity in New York state, as well as government data on industrial production and the capacity utilization rate. Meanwhile, the University of Michigan is to publish preliminary data on consumer sentiment and inflation expectations.