Weekly Outlook: 2014, April 6 - 13

USD/CAD weekly outlook: April 7 - 11

The Canadian dollar rose to five-week highs against the U.S. dollar on Friday, as a stronger-than-forecast domestic jobs report for March bolstered demand for the loonie.

USD/CAD fell 0.51% to settle at 1.0980, after falling to a session low of 1.0955 following the release of the data. For the week, the pair ended down 0.67%.

The pair was likely to find support at 1.0930 and resistance at 1.1040, the session high.

Statistics Canada reported that the economy added 42,900 jobs last month, well above the forecast jobs growth of 21,500. The increase came after the economy shed 7,000 jobs in February.

Canada’s unemployment rate declined to 6.9%, the first drop this year, from 7.0% in February. Analysts had expected the jobless rate to remain unchanged.

At the same time, a report showed that the U.S. economy added slightly fewer than expected jobs last month.

The U.S. economy added 192,000 jobs in March, the Labor Department said, below expectations for jobs growth of 200,000. February’s figure was revised up to 197,000 from a previously reported 175,000.

The U.S. unemployment rate remained unchanged at 6.7%, compared to expectations for a tick down to 6.6%.

The data disappointed some market expectations for a more robust reading but indicated that the Federal Reserve is likely to stick to the current pace of reductions to its asset purchase program.

In the week ahead, markets will be focusing on Wednesday’s minutes of the Fed’s most recent policy setting meeting. Data from Canada’s housing sector 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, April 7

• The Bank of Canada is to publish its quarterly business outlook survey.

Tuesday, April 8

• Canada is to produce data on building permits.

Wednesday, April 9

• The Federal Reserve is to publish what will be the closely watched minutes of its latest policy meeting.

Thursday, April 10

• Canada is to publish data on new house price inflation.
• In the U.S., the Labor Department is to release its weekly report on initial jobless claims.

Friday, April 11

• The U.S. is to round up the week with data on producer price inflation and the preliminary report on the University of Michigan’s consumer sentiment index.

AUD/USD weekly outlook: April 7 - 11

The Australian dollar ended Friday’s session at a five-month high against its U.S. counterpart, as traders reassessed their expectations for how quickly the Federal Reserve will roll back its stimulus program following the release of disappointing U.S. employment data.

AUD/USD rose to 0.9306 on Friday, the pair’s highest since November 21, before subsequently consolidating at 0.9292 by close of trade on Friday, up 0.66% for the day and 0.47% higher for the week.

The pair is likely to find support at 0.9204, the low from April 3 and resistance at 0.9332, the high from November 21.

The Labor Department reported Friday that the U.S. economy added 192,000 jobs in March, below expectations for jobs growth of 200,000. February’s figure was revised up to 197,000 from a previously reported 175,000.

The U.S. unemployment rate remained unchanged at 6.7%, compared to expectations for a tick down to 6.6%.

The data disappointed some market expectations for a more robust reading but indicated that the Federal Reserve is likely to stick to the current pace of reductions to its asset purchase program.

The Aussie drew additional support from hopes that China will implement economic stimulus measures in the near-term to shore up slowing growth.

The Asian nation is Australia’s biggest trade partner.

Meanwhile, in Australia, official data released Thursday showed that retail sales rose 0.2% in February, less than the expected 0.3% increase.

A separate report showed that Australia's trade surplus narrowed to A$1.20 billion in February, from A$1.39 billion in January. Analysts had expected the trade surplus to narrow to A$0.82 billion in February.

The data came after the Reserve Bank of Australia held its benchmark interest rate unchanged at a record low of 2.50% at the conclusion of its policy meeting on Tuesday.

Commenting on the decision, RBA Governor Glenn Stevens said borrowing costs were likely to remain low for an extended period of time.

Data from the Commodities Futures Trading Commission released Friday showed that speculators significantly reduced their bearish bets on the Australian dollar for the third consecutive week in the week ending April 1.

Net shorts totaled 4,880 contracts, compared to net shorts of 20,527 in the preceding week.

In the week ahead, market players will be focusing on Wednesday’s minutes of the Fed’s most recent policy setting meeting for further clues on the future course of monetary policy.

Australian employment data scheduled for Thursday 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, April 7

• Markets in China will be closed for a national holiday.

Tuesday, April 8

• Australia is to publish private sector reports on business confidence.

Wednesday, April 9

• Australia is to release private sector data on consumer sentiment, as well as official data on home loans.
• Later Wednesday, the Federal Reserve is to publish what will be the closely watched minutes of its latest policy meeting.

Thursday, April 10

• Australia is to release data on the change in the number of people employed and the unemployment rate, in addition to private sector data on inflation expectations.
• In the U.S., the Labor Department is to release its weekly report on initial jobless claims.

Friday, April 11

• China is to produce data on consumer price inflation.
• The U.S. is to round up the week with data on producer price inflation and the preliminary report on the University of Michigan’s consumer sentiment index.

NZD/USD weekly outlook: April 7 - 11

The New Zealand regained ground against its U.S. counterpart on Friday, as weaker than expected U.S. employment data forced investors to recalibrate their assumptions about the future course of the Federal Reserve's monetary policy.

NZD/USD rose to 0.8700 on Tuesday, the pair’s highest since August 2, 2011, before subsequently consolidating at 0.8600 by close of trade on Friday, up 0.63% for the day but still 0.64% lower for the week.

The pair is likely to find support at 0.8513, the low from April 3 and resistance at 0.8700, the high from April 1.

The Labor Department reported Friday that the U.S. economy added 192,000 jobs in March, below expectations for jobs growth of 200,000. February’s figure was revised up to 197,000 from a previously reported 175,000.

The U.S. unemployment rate remained unchanged at 6.7%, compared to expectations for a tick down to 6.6%.

The data disappointed some market expectations for a more robust reading but indicated that the Federal Reserve is likely to stick to the current pace of reductions to its asset purchase program.

The kiwi rallied to the highest level since August 2011 earlier in the week boosted by a stronger growth outlook and hopes that China will soon take steps to shore up slowing economic growth.

The New Zealand dollar has been well-supported in recent weeks as the Reserve Bank of New Zealand began to tighten monetary policy, while growing expectations for monetary stimulus in China, a key export market for New Zealand, also benefitted the kiwi.

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 April 1.

Net longs totaled 18,480 contracts as of last week, compared to net longs of 18,213 contracts in the previous week.

In the week ahead, market players will be focusing on Wednesday’s minutes of the Fed’s most recent policy setting meeting for further clues on the future course of monetary policy.

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

Monday, April 7

• Markets in China will be closed for a national holiday.

Tuesday, April 8

• New Zealand is to publish private sector reports on business confidence.

Wednesday, April 9

• The Federal Reserve is to publish what will be the closely watched minutes of its latest policy meeting.

Thursday, April 10

• New Zealand is to release private sector data on manufacturing activity.
• In the U.S., the Labor Department is to release its weekly report on initial jobless claims.

Friday, April 11

• China is to produce data on consumer price inflation.
• The U.S. is to round up the week with data on producer price inflation and the preliminary report on the University of Michigan’s consumer sentiment index.

GBP/USD weekly outlook: April 7 - 11

The pound ended the week lower against the U.S. dollar on Friday after reports showed that all three U.K. PMI surveys for March fell short of expectations, while data on Friday showed that the U.S. economy added slightly fewer than expected jobs last month.

GBP/USD touched lows of 1.6556, the weakest since March 26 and was last down 0.14% to 1.6574. For the week, the pair last 0.54%.

Cable is likely to find support at 1.6480 and resistance at 1.6660, Thursday’s high.

The Labor Department reported Friday that the U.S. economy added 192,000 jobs in March, below expectations for jobs growth of 200,000. February’s figure was revised up to 197,000 from a previously reported 175,000. The U.S. unemployment rate remained unchanged at 6.7%, compared to expectations for a tick down to 6.6%.

The data disappointed some market expectations for a more robust reading but indicated that the Federal Reserve is likely to stick to the current pace of reductions to its asset purchase program.

The pound remained softer after data on Thursday showed that the U.K. service sector continued to expand steadily in March, albeit at the slowest pace in nine months.

The Markit/CIPS services purchasing managers index ticked down to 57.6 last month from 58.2 in February. Analysts had expected the index to decline to 58.1.

The index remained well above the 50 level that separates growth from contraction, and signaled another month of robust growth in the sector, which comprises more than three-quarters of the U.K. economy.

Earlier in the week, reports showed that the manufacturing and construction PMI’s for March also came in below market expectations but still pointed to robust first quarter growth in the U.K.

Elsewhere, sterling was almost unchanged against the euro on Friday, with EUR/USD settling at 0.8268 at the close of trade. The euro fell sharply against the pound on Thursday after the European Central Bank it would use unconventional measures if necessary to stave off the risk of deflation in the euro zone.

In the week ahead, markets will be focusing on Wednesday’s minutes of the Fed’s most recent policy setting meeting. Thursday’s monetary policy announcement by the Bank of England 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. The guide skips Monday, as there are no relevant events on this day.

Tuesday, April 8

• The U.K. is to release a report on industrial and manufacturing production, a leading indicator of economic health.

Wednesday, April 9

• The U.K. is to produce data on the trade balance, the difference in value between imports and exports.
• Later Wednesday, the Federal Reserve is to publish what will be the closely watched minutes of its latest policy meeting.

Thursday, April 10

• The Bank of England is to announce its benchmark interest rate.
• In the U.S., the Labor Department is to release its weekly report on initial jobless claims.

Friday, April 11

• The U.S. is to round up the week with data on producer price inflation and the preliminary report on the University of Michigan’s consumer sentiment index.

EUR/USD weekly outlook: April 7 - 11

The dollar pulled back from one-month highs against the euro on Friday after the release of data showing that the U.S. economy added slightly fewer than expected jobs in March.

EUR/USD ended Friday’s session down 0.12% to 1.3703, after falling to a five-week low of 1.3673 earlier. For the week, the pair lost 0.52%.

The pair is likely to find support at 1.3673 and resistance at 1.3730, Friday’s high.

The Labor Department reported Friday that the U.S. economy added 192,000 jobs in March, below expectations for jobs growth of 200,000. February’s figure was revised up to 197,000 from a previously reported 175,000. The U.S. unemployment rate remained unchanged at 6.7%, compared to expectations for a tick down to 6.6%.

The data disappointed some market expectations for a more robust reading but indicated that the Federal Reserve is likely to stick to the current pace of reductions to its asset purchase program.

The shared currency remained under pressure after the European Central Bank said Thursday it would use unconventional measures if necessary to stave off the risk of deflation in the euro zone.

ECB President Mario Draghi said the governing council was "unanimous" in its commitment to using all unconventional instruments within its mandate to cope with the risk of low inflation becoming entrenched. He added that the bank discussed the possibility of negative deposit rates.

The central bank left rates on hold at a record low 0.25% at its monthly meeting, despite data earlier in the week showing that the annual rate of euro zone inflation slowed to 0.5% in March, the lowest since November 2009.

The ECB targets an inflation rate of just under 2%.

In the week ahead, markets will be focusing on Wednesday’s minutes of the Fed’s most recent policy setting meeting. German trade data will also be watched in data light week.

Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets. The guide skips Monday and Tuesday as there are no relevant events on these days.

Wednesday, April 9

• Germany is to produce data on the trade balance, the difference in value between imports and exports.
• The Federal Reserve is to publish what will be the closely watched minutes of its latest policy meeting.
• Thursday, April 10
• In the U.S., the Labor Department is to release its weekly report on initial jobless claims.

Friday, April 11

• The U.S. is to round up the week with data on producer price inflation and the preliminary report on the University of Michigan’s consumer sentiment index.

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