Forex - Weekly outlook: June 13-17

Investing.com – Last week saw the euro fall to a six-day low against the U.S. dollar on Friday as concerns over Greece’s sovereign debt crisis and diminished expectations for euro zone rate hikes weighed, while mounting fears over global economic growth saw investors shun riskier assets.

The single currency came under pressure amid uncertainty over a resolution to Greece’s ongoing debt crisis, pushing up the country’s borrowing costs to almost record highs. 

Reduced rate expectations also hurt the euro. The European Central Bank kept its 2012 inflation forecast unchanged on Thursday after leaving rates at 1.25%, suggesting the pace of euro zone interest-rate hikes may be slower than previously thought.

The pound fell sharply against the greenback on Friday, slumping to a two-week low after reports showed that manufacturing production contracted more than analysts estimated in April and consumer inflation expectations declined in May, dampening expectations for a near-term rate hike by the Bank of England.

The dollar eased up against the yen after Japan’s finance minister Yoshihiko Noda said that he was monitoring the yen’s appreciation in the forex market. The greenback was also higher against the Swiss franc, after weak domestic inflation data reduced expectations for the Swiss National Bank to tighten policy.

Meanwhile, fears the global economic recovery is faltering grew after data showed China's export growth slowed in May. The disappointing data boosted risk aversion and dragged down high-yielding currencies, such as the Australian, New Zealand and Canadian dollars.

Looking ahead to the coming week, U.S. data on retail sales and consumer price inflation will be a focus of attention. Meanwhile, the Bank of Japan and the Swiss National Bank are both to announce their interest rate decisions.

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

Monday, June 13

Japan is to publish government data on core machinery orders, a leading indicator of production.

Meanwhile, European Central Bank President Jean-Claude Trichet is to speak at a public engagement; his comments will be closely watched for any clues to the possible future direction of monetary policy.

Also Monday, markets in Switzerland, France and Germany are to remain closed in observance of Whit Monday.

Tuesday, June 14

The Bank of Japan is to announce a decision on its key interest rate. The announcement will be followed by a closely watched press conference. The country is also to release revised data on industrial production.

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

Switzerland’s State Secretariat for Economic Affairs is to publish its quarterly economic forecast, which looks at major GDP components such as consumption and investment, as well as employment and inflation.

The U.K. is to release government data on consumer price inflation, which accounts for a majority of overall inflation. The country is also to publish industry data on house prices.

Later in the day, the U.S. is to produce official data on producer price inflation, a leading indicator of consumer inflation. The country is also due to publish government data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity.

Elsewhere, Canada is to publish a government report on the capacity utilization rate, an important indicator of consumer inflation, while Bank of Canada Governor Mark Carney is due to speak at the Board of Trade, in Vancouver.

Also Tuesday, New Zealand is slated to release official data on retail sales, a leading indicator of economic health.

Wednesday, June 15

Reserve Bank of Australia Governor Glenn Stevens is to speak. Traders scrutinize his public engagements as they are often used to drop subtle clues regarding future monetary policy.

The BoJ is to publish its monthly report, which outlines the data policymakers examined when making the latest interest rate decision.

Elsewhere, Switzerland is to publish official data on producer price inflation, a leading indicator of consumer inflation, while the euro zone is to publish official data on industrial production.

The U.K. is to publish government data on claimant count change and the country’s unemployment rate. Later in the day, Bank of England Governor Mervyn King is to speak at a public engagement; his comments will be closely watched for any clues to the future possible direction of monetary policy.

Meanwhile, the U.S. is to release a flurry of data, including reports on consumer price inflation, industrial production and the capacity utilization rate, leading indicators of economic health. The U.S. is also to publish government data on the balance of domestic and foreign investment as well as official data on crude oil inventories and manufacturing activity in New York state.

Also Wednesday, Canada is to produce official data on manufacturing sales, a leading indicator of economic health, while New Zealand is to publish a report on consumer sentiment.

Thursday, June 16

Australia is to publish data on new vehicle sales and inflation expectations. Meanwhile, the RBA is to publish its quarterly bulletin, which provides a detailed analysis of current and future economic conditions from the bank's point of view.

The Swiss National Bank is to announce its three-month Libor rate and publish its rate statement, which offers clues on the outcome of future rate decisions. Also Thursday, Switzerland is to publish official data on industrial production.

The euro zone is to publish official data on consumer price inflation. Meanwhile, the ECB is to publish its monthly bulletin, which reveals the statistical data that the ECB Governing Board evaluated when making the latest interest rate decision.

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

The U.S. is to publish its weekly report on initial jobless claims as well as official data on building permits and housing starts, an excellent gauge of future construction activity. The country is also to produce data on its current account and natural gas stockpiles, while the Federal Reserve Bank of Philadelphia is to publish an index of manufacturing activity.

Later in the day, the BoJ is to publish the minutes of its most recent policy setting meeting. The minutes contain in-depth insights into the economic conditions that influenced the decision on where to set interest rates.

Friday, June 17

Both Italy and the euro zone are to publish official data on their respective trade balances. Meanwhile, ECB President Trichet is due to speak at a public engagement in New York.

Canada is to publish data on wholesale sales, a leading indicator of consumer spending.

The U.S. is to round up the week with a report on an index of leading indicators, which is designed to predict the direction of the economy, while the University of Michigan is to publish preliminary data on consumer sentiment and inflation expectations.