January 16 to 20 Forex Weekly Outlook

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On Friday, the U.S. greenback declined against the other major currencies and the greenback index posted its biggest weekly drop since late October as optimism chilled over President-elect Donald Trump’s economic policy proposals

The U.S. dollar index, which gauges the greenback’s strong point against a trade-weighted basket of six major currencies, declined 0.29% to 101.17 on late Friday.

During the week, the index shed 1.0%, marking its poorest weekly performance since late October.

On earlier Friday, The index had increased after upbeat U.S. retail sales statistics boosted the economic outlook.

It was reported that in December,  the Commerce Department reported retail sales increased 0.6%, while November’s sales were revised up to indicate a 0.2% increase.

However,  the greenback retraced gains during doubts over the incoming Trump administration’s plans for fiscal stimulus, deregulation and tax reductions.

On Wednesday, the greenback decline suddenly  and reach five week low against the euro, yen and Swiss franc on Thursday as Trump frustrated traders who had been expecting he would address economic and fiscal policies in his first formal news conference as U.S. president-elect.

Earlier this month, the dollar index rallied to 14-year high on expectations that Trump’s policies would speed up growth and inflation and prompt the Fed Reserve to increase  interest rates more rapidly.

On January 20, 2017, Trump will officially take office.

On late Friday, USD/JPY declined  0.14% in 114.53 and the pair dropped 2.23% for the week, its poorest week since late July.

The euro also pressed higher, with EUR/USD at 1.0644 in late trade, after touching an intra-day low of 1.0596 following the U.S. retail sales report. For the week, the euro increased 1.08% compared to the greenback.

Sterling inched higher; with GBP/USD  easing up 0.12% to 1.2174 but stayed under pressure before a speech on the U.K.’s Brexit plans that Prime Minister Theresa May will make on Tuesday.

In the week onward, financial markets will continue to concentrate on U.S. President-elect Trump ahead of his inauguration on January 20, Friday.

Investors will be looking forward to Tuesday’s strongly expected Brexit speech and Thursday’ policy statement by the European Central bank.

China’s data on 4th quarter growth will also be closely observed.

On Additional News

On January 16, Martin Luther King Day,  U.S. financial markets will be closed.  Bank of England Governor Mark Carney is scheduled  to speak at an event in London.

On Tuesday, January 17, New Zealand is to announce private sector statistic on business confidence.

New York Fed Reserve President William Dudley is to talk at an event in New York and the U.S. is also to announce the Empire State manufacturing index.

The U.K. is to publish data on inflation. U.K. Prime Minister Theresa May is scheduled to speak regarding starting proceedings for Britain’s exit from the EU.

The ZEW Institute is to report on German economic sentiment.

On  January 18, the U.K. is to post its monthly jobs report.

The euro zone is to publish revised data on inflation.

The U.S. is to release figures on inflation and industrial production. Later in the day, Fed Chair Janet Yellen is to speak at an occasion in San Francisco.

The Bank of Canada is to release  its current monetary policy decision and hold a press conference to talk about the economic outlook.

Thursday, January 19, Australia is to release  its monthly employment report.

The European Central Bank (ECB) is to publish its current monetary policy decision. The announcement is to be followed by a press conference with President Mario Draghi.

Canada is to report on manufacturing, sales and foreign securities purchases.

Fed Reserve Chair Janet Yellen is to speak at an event at Stanford.

Friday, January 20, China is to publish statistics on 4th quarter progress along with figures on industrial production.

The U.K. is to publish statistic on retail sales. Canada is to round up the week with statistic on retail sales.

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