Weekly Forex Outlook for September 26-30

Following the high volatility in the forex markets during the second part of last week with the FOMC stimulus plan, this week the forex markets will continue to dwell over the debt crisis in Europe and in particular the Greek debt crisis.   The main events and reports for the upcoming week that could affect traders include: Ben Bernanke’s speech, Euro Area inflation rate and U.S’s final estimate of Q2 GDP. Here is a weekly forecast for the forex market for the week of September 26th to September 30th:

(all times GMT):

  1. Monday 26th of September 15:00 – U.S. New Home Sales: in the recent report (July 2011), the sales of new homes reached an annual rate of 298,000 – a slight decrease of 0.7% compared with the number of new homes sold in June 2011, but it was 6.8% above the home sales rate in July 2011; if this downward trend will continue, it may only further indicate a slowdown in the US housing markets and may affect USD;
  2. Tuesday 27th of September 09.00 – Euro Area Monetary Developments: This monthly report will present the changes in the M3, M1 and loans to private sector in the Euro area during August 2011. In July, the annual growth rate for M1 fell to 0.9%. The annual growth rate of loans to private sector slipped from 2.5% in June to 2.4% in July. If this decline will continue in August it could serve as another indicator of a slowdown in economic activity in Europe and  may affect ECB’s upcoming interest rate decision (see here the last report);
  3. Tuesday 27th of September 15.00 – US Consumer Confidence: in the previous report, the consumer confidence index declined during August compared with July’s index. The current expectations are that this index may continue to drop in the upcoming report;
  4. Wednesday 28th of September 13:30 –U.S. Core Durable Goods: This monthly report will show the changes in orders of durable goods in the U.S. in the manufacturing sector for August. In July 2011, manufactured durable goods increased by $7.7 billion or 4.0% to $201.5 billion(for the full report);
  5. Wednesday 28th of September 22:00 – Ben Bernanke’s Speech: following the recent decision of FOMC to purchase long term securities and to sell short term securities, the Chairman of the Federal Reserve is likely to address the recent FOMC plan and may also refer to the sharp market reactions in the past couple of days of last week;
  6. Thursday 29th of September 13:30 –U.S. Unemployment Claims: For the week ending on September 17th, initial claims fell by 9,000 to 423,000 claims; for the week ending on September 10th, the number of insured unemployment was 3.727 million, a decrease of 28,000 compared with the previous week’s (see here my recent review on the US Labor market);
  7. Thursday 29th of September 13:30 – Final US GDP 2Q 2011 Report: This will be the last estimate of the second quarter 2011 real GDP of US. In the preliminary estimates the 2Q2011 GDP growth rate was 1.0%, compared with 0.4% increase at 1Q2011 (for the second estimate of 2Q GDP).
  8. Thursday 29th of September 15:00 – U.S. pending Home Sales: This report shows the major changes in pending home sales in the U.S. for August 2011; in the recent July report there was decrease in the pending home sales index by 1.3% compared with June’s index;
  9. Friday 30th of September 10.00 – Euro Area Annual Inflation (September): the inflation in Euro Area remained unchanged in August with an annual inflation rate of 2.5%; if the upcoming flash estimate won’t show an increase in the inflation rate, it may further push ECB to decrease its interest rates (for the full previous report);
  10. Friday 30th of September 13:30 – Canadian GDP for July 2011: In the recent report pertaining June 2011, the real gross domestic product slightly inclined by 0.2% in June, after it decreased by 0.3% in May. The June increase was stem in part from an increased of 1.0% in retail trade and a 0.6% growth in construction activity. This report could affect the strength of CAD exchange rate (for the full previous report).

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