Weekly Outlook: 2014, March 30 - April 6

AUD/USD weekly outlook: March 31 - April 4

The Australian dollar ended Friday’s session close to a four-month high, amid indications the local economy is picking up, while hopes for fresh stimulus measures from China also supported gains.

AUD/USD rose to 0.9295 on Friday, the pair’s highest since November 21, before subsequently consolidating at 0.9248 by close of trade on Friday, down 0.1% for the day but still 1.79% higher for the week.

The pair is likely to find support at 0.9215, the low from March 27 and resistance at 0.9295, the high from March 28.

The Aussie climbed to the highest level since November on Friday after China's premier Li Keqiang said policymakers are prepared to do more to shore up the cooling economy.

The remarks helped ease concerns over recent signs of a slowdown in the world’s second-largest economy. The Asian nation is also Australia’s biggest trade partner.

The Australian dollar remained supported after upbeat comments made by Reserve Bank of Australia Governor Glenn Stevens earlier in the week.

RBA Governor Stevens said on Wednesday that the nation’s economy may strengthen later this year. Stevens added that this was helped by "the lower exchange rate since last April and the improved economic conditions overseas."

Meanwhile, in the U.S., data on Friday showed that U.S. consumer spending rose 0.3% last month after a downwardly revised gain of 0.2% in January

A separate report showed that the University of Michigan’s consumer sentiment index slipped to 80.0 in March, down from 81.6 the month before. It was higher than the preliminary March reading of 79.9 but below forecasts of 80.5.

On Thursday, economic reports showed that U.S. jobless claims fell to their lowest level since late November last week, while U.S. fourth quarter growth was revised higher.

Data from the Commodities Futures Trading Commission released Friday showed that speculators reduced their bearish bets on the Australian dollar for the second consecutive week in the week ending March 25.

Net shorts totaled 20,527 contracts, compared to net shorts of 24,463 in the preceding week.

In the week ahead, investors will be looking to Friday’s U.S. nonfarm payrolls report for March for further indications on the strength of the labor market, while Tuesday’s rate decision from the RBA will also be closely-watched.

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

Monday, March 31

• Australia is to publish data on private sector credit.

Tuesday, April 1

• China is to release data on manufacturing activity.
• The Reserve Bank of Australia is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision.
• Later Tuesday, the Institute of Supply Management is to publish a report on U.S. manufacturing growth.

Wednesday, April 2

• Australia is to produce data on building approvals, a leading indicator of future construction activity.
• The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. The U.S. is also to release data on factory orders.

Thursday, April 3

• Australia is to release data on retail sales and the trade balance, the difference in value between imports and exports.
• China is to produce data on service sector activity.
• Later in the day, the U.S. is to publish data on the trade balance and the weekly report on initial jobless claims. Meanwhile, the ISM is to publish a report service sector activity.

Friday, April 4

• The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.

NZD/USD weekly outlook: March 31 - April 4

The New Zealand ended Friday’s session close to a two-and-a-half year high, amid indications the domestic economy is gaining momentum, while hopes for fresh stimulus measures from China also supported gains.

NZD/USD rose to 0.8697 on Friday, the pair’s highest since August 2, 2011, before subsequently consolidating at 0.8656 by close of trade on Friday, down 0.18% for the day but still 1.38% higher for the week.

The pair is likely to find support at 0.8590, the low from March 27 and resistance at 0.8697, the high from March 28.

The kiwi climbed to the highest level since August 2011 on Friday after China's premier Li Keqiang said policymakers are prepared to do more to shore up the cooling economy.

The remarks helped ease concerns over recent signs of a slowdown in the world’s second-largest economy.

The New Zealand dollar remained supported after data released earlier in the week showed that New Zealand’s trade surplus rose sharply in February.

The kiwi received an additional boost after Reserve Bank Deputy Governor Grant Spencer indicated that the bank could remove measures to cool the housing market, which would allow inflation to rise.

Meanwhile, in the U.S., data on Friday showed that U.S. consumer spending rose 0.3% last month after a downwardly revised gain of 0.2% in January

A separate report showed that the University of Michigan’s consumer sentiment index slipped to 80.0 in March, down from 81.6 the month before. It was higher than the preliminary March reading of 79.9 but below forecasts of 80.5.

On Thursday, economic reports showed that U.S. jobless claims fell to their lowest level since late November last week, while U.S. fourth quarter growth was revised higher.

Data from the Commodities Futures Trading Commission released Friday showed that speculators increased their bullish bets on the New Zealand dollar in the week ending March 25.

Net longs totaled 18,213 contracts as of last week, up 13.5% from net longs of 15,751 contracts in the previous week.

In the week ahead, investors will be looking to Friday’s U.S. nonfarm payrolls report for March for further indications on the strength of the labor market.

Attention will also turn to the release of Chinese manufacturing data due Tuesday. The Asian nation is New Zealand's second biggest export partner.

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

Monday, March 31

• New Zealand is to produce private sector data on business confidence.

Tuesday, April 1

• China is to release data on manufacturing activity.
• Later Tuesday, the Institute of Supply Management is to publish a report on U.S. manufacturing growth.

Wednesday, April 2

• The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. The U.S. is also to release data on factory orders.

Thursday, April 3

• China is to produce data on service sector activity.
• Later in the day, the U.S. is to publish data on the trade balance and the weekly report on initial jobless claims. Meanwhile, the ISM is to publish a report service sector activity.

Friday, April 4

• The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.

GBP/USD weekly outlook: March 31 - April 4

The pound was higher against the dollar on Friday as optamism over the rapid economic recovery in the U.K. and fresh hopes for economic stimulus in China underpinned investor demand for sterling.

GBP/USD was last up 0.18% to 1.6639, after touching session highs of 1.6651, the strongest level since March 19.

Cable was likely to find support at 1.6553, Thursay’s low and resistance at 1.6700.

Risk appetite was boosted by indications that China’s government is prepared to do more to shore up the cooling economy. China's premier Li Keqiang said Friday the country has policies in place to counter economic volatility. The remarks eased concerns over recent signs of a slowdown in the world’s second-largest economy.

Sterling remained supported after a report on Friday showed that U.K. fourth quarter growth was left unrevised at 0.7% for the final three months of 2013. The economy expanded 2.7% from the same period a year earlier, but growth for the full year was revised down to 1.8% from a preliminary estimate for 1.9%.

Sterling shrugged off a report showing that the U.K. current account deficit came in at 22.4 billion pounds in the fourth quarter, well above expectations for a deficit of 14 billion pounds.

The reports came one day after official data showed that U.K. retail sales rose 1.7% in February; recouping most of January’s 2.0% decline, and were 3.7% higher from a year earlier.

Market expectations had been for a 0.5% increase on the month and an annual gain of 2.5%.

In the U.S., data on Friday showed that U.S. consumer spending rose 0.3% last month after a downwardly revised gain of 0.2% in January.

A separate report showed that the University of Michigan’s consumer sentiment index slipped to 80 in March, down from 81.6 the month before. It was higher than the preliminary March reading of 79.9 but below forecasts of 80.5.

In the week ahead, investors will be looking to Friday’s U.S. nonfarm payrolls report for March for further indications on the strength of the labor market, while U.K. PMI surveys on manufacturing, services and construction sector activity will also be closely watched.

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

Monday, March 31

• The U.K. is to release data on net lending to individuals.

Tuesday, April 1

• The U.K. is to release data on manufacturing activity.
• Later Tuesday, the Institute of Supply Management is to publish a report on U.S. manufacturing growth.

Wednesday, April 2

• The U.K. is to produce private sector data on house price inflation, as well as a report on construction activity.
• The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. The U.S. is also to release data on factory orders.

Thursday, April 3

• The U.K. is also to release data on service sector growth, while the Bank of England is to announce its benchmark interest rate.
• The U.S. is to publish data on the trade balance, as well as the weekly report on initial jobless claims. Meanwhile, the ISM is to publish a report service sector activity.

Friday, April 4

• The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.

EUR/USD weekly outlook: March 31 - April 4

The euro inched higher against the dollar on Friday, pulling back from one-month lows as market sentiment was bolstered by indications that China is prepared to do more to shore up the cooling economy.

EUR/USD edged up 0.07% to settle at 1.3752, recovering from lows of 1.3702. The pair ended the week down 0.61%.

The pair was likely to find support at 1.3702 and resistance at 1.3800.

Risk appetite was boosted after China's premier Li Keqiang said Friday the country has policies in place to counter economic volatility. The remarks eased concerns over recent signs of a slowdown in the world’s second-largest economy.

The common currency remained under pressure after European Central Bank officials indicated earlier in the week that they are considering fresh policy options to stave off the risk of deflation in the region.

ECB governing council member and Bundesbank head Jens Weidmann said Tuesday that a negative deposit rate could be an appropriate way to address the impact of strong gains in the euro.

The same day ECB President Mario Draghi that the central bank stood ready to act if inflation slipped lower than the ECB expected.

Data on Friday showing that the annual rate of inflation in Spain slipped 0.2% in March fuelled concerns that deflation could threaten the economic recovery in the euro area. A separate report showed that the annual rate of inflation in Germany slowed in March.

Elsewhere, the euro was higher against the yen on Friday, with EUR/JPY advancing 0.71% to 141.40, up from an almost one-month trough of 139.95.

In the week ahead, investors will be looking to Friday’s U.S. nonfarm payrolls report for March for further indications on the strength of the labor market, while Monday’s euro zone inflation report will also be in focus, ahead of the ECB policy meeting and press conference on Thursday.

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

Monday, March 31

• The euro zone is to produce preliminary data on consumer price inflation, which accounts for the majority of overall inflation.

Tuesday, April 1

• The euro zone is to release data on the unemployment rate. Germany is release data on the change in the number of people unemployed, while Spain and Italy are to release reports on manufacturing activity.
• Later Tuesday, the Institute of Supply Management is to publish a report on U.S. manufacturing growth.

Wednesday, April 2

• In the euro zone, Spain is release data on the change in the number of people unemployed.
• The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. The U.S. is also to release data on factory orders.

Thursday, April 3

• The euro zone is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. Spain and Italy are to publish data on service sector activity.
• Later in the day, the ECB is to announce its benchmark interest rate. The announcement is to be followed by a press conference with President Mario Draghi.
• The U.S. is to publish data on the trade balance, as well as the weekly report on initial jobless claims. Meanwhile, the ISM is to publish a report service sector activity.

Friday, April 4

• Germany is to publish data on factory orders.
• The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.

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