Weekly Outlook: 2015, November 22 - November 29

US Dollar Forecast – US Dollar Wobbles But Fed Speculation and Liquidity Keep a Bid
The US Dollar this past week thwarted what could have been a nasty reversal that changed the balance of sentiment.

British Pound Forecast – GBP/USD Rebound to Succumb to Dovish BoE Testimony, Strong US GDP
GBP/USD extended the rebound from earlier this month as the Federal Open Market Committee (FOMC) Minutes warned of a potential three-way split within the central bank, but the pound-dollar may struggle to hold its ground in the week ahead should the Bank of England (BoE) show a greater willingness to further delay its normalization cycle.

Canadian Dollar Forecast – BoC Governor Poloz Says Data Makes Rate Hike Miles Away
In an ideal economy, which doesn’t exist anywhere, weakness in one sector would be followed or balanced by strength in another sector.

Australian Dollar Forecast – Australian Dollar Outlook Clouded as Prices Break from Policy Bets
The outlook for the Australian Dollar is clouded in the week ahead as the currency continues to recover despite an adverse shift in monetary policy expectations.

New Zealand Dollar Forecast – Kiwi Catches its Footing Despite Another Spill in Milk Prices
In previous pieces on the New Zealand Dollar, we’ve discussed the correlation between Milk prices and the spot rate on the Kiwi-Dollar.

Gold Forecast – Gold Prices Down for a Fifth Week- Outlook Hinges on US GDP
Gold prices continued to fall for the fifth consecutive week with the precious metal down 0.6% to trade at 1076 ahead of the New York close on Friday.

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Forex Weekly Outlook Nov. 23-27

The dollar struggled after the meeting minutes but certainly recovered. US and UK GDP, US Consumer Confidence, Durable Goods Orders stand out . These are the main events on forex calendar. Here is an outlook on the highlights of this week.

Te Federal Reserve released the minutes of the Committee meeting held in October, leaving the door open for a rate hike announcement in December. Investors reacted by increasing the odds for a rate increase next month to 72%. Policy makers were confident that the US economy is strong enough to withstand a modest policy tightening and expect the central bank will succeed to balance between full employment and stable two percent inflation.

1. German Ifo Business Climate: Tuesday, 9:00. The Volkswagen scandal hardly affected German business optimism in October. The index for German industry and trade inched down to 108.2 points from 108.5 points in September, posting the first drop since June this year. Nevertheless, business outlook continued to rise from 103.3 in September to 103.8 in October, the highest level since June last year. However, current conditions fell from 114.0 to 112.6. Business sentiment is expected to reach 108.3 this time.
2. US GDP data: Tuesday, 13:30. According to the initial release, the US economy slowed down to an annualized growth rate of 1.5% in Q3 2015, after seeing 3.9% in Q2. In this release, which is the second one, the figure is expected to be upgrade to 2%, still mediocre, but looking better.
3. US CB Consumer Confidence: Tuesday, 15:00. U.S. consumer confidence worsened in October, deteriorated to a three-month low of 97.6. The reading dimmed prospects for a U.S. interest rate hike this year. Analysts expected the index to rise to 103.0 in October. The current conditions Index fell from 120.3 last month to 112.1 in October, while the outlook Index declined to 88.0 from 90.8 in September. U.S. consumer confidence is expected to rise to 99.3 in November.
4. US Durable Goods Orders: Wednesday, 13:30. Orders for long lasting products continued to weaken in September for the fourth time in five months with orders contracting more than expected, down 1.2% from minus 2.0% in August. Meanwhile core orders excluding transportation declined 0.4% after a downward revised 0.9% decline in August. Automobile orders edged up 1.8% reversing a similar sized decline in August. Analysts expect Durable goods orders to edge up 1.6% in October, while core orders are expected to rise by 0.5%.
5. US Unemployment Claims: Wednesday, 13:30. The number of Americans filing initial claims for unemployment benefits declined last week by 5,000 to 271,000, indicating a strong labor market. Claims have remained below the 300,000 threshold for 37 consecutive weeks, the longest stretch in years. The four-week average of claims increased by 3000 to 270,750. Economists expect payrolls will increase by at least 200,000 in November, which will give the Federal Reserve confidence to raise its short-term interest rate at the Dec. 15-16 meeting. The number of jobless claims is expected to reach 273,000 this week.
6. UK GDP data: Friday, 9:30. The first estimate of UK growth in Q2 showed a level of 0.5%. While somewhat lower than previous quarters, this growth rate still pleases policymakers. A confirmation of this level is expected in the second release.

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