In the last week prior to the holidays, the dollar remained subdued against most currencies, except the Japanese yen. The holiday week features low liquidity and trading volumes. Generally, trading remains. Surprising sparks do occur at times. Not many events are scheduled for release during the week, but some of them could trigger sharp response.
The tax bill was passed by the Congress and Trump has to sign it. This news should have driven the US dollar up, looks as though it has already been priced in. The US data released last week was mixed with housing starts and building permits beating expectations and durable goods orders missing out on analysts’ estimates. In the third estimate, America’s GDP for the third quarter revised to 3.2 percent from the 3.3 percent reported in the prior estimate. Overall, the economy continues to do well.
Meanwhile, the Canadian dollar benefitted from positive retail sales and inflation data. The pound remained under pressure because of the political developments connected with Brexit, but annual GDP data provided a little bit of support.
Last week, the cryptocurrencies experienced huge volatility amid Bitcoin’s inclusion in futures trading in CME. Having said that, here is an outlook on the events scheduled for the upcoming week:
#1: Bank of Japan Governor Kuroda Speaks (12/26/2017 Tuesday 04:00 GMT)
Haruhiko Kuroda, the Governor of the Bank of Japan, is scheduled to speak in Tokyo at the Japan Business Federation. Markets often remain volatile during his speeches. This is because traders make an attempt to understand the direction of interest rates in the future.
#2: U.S. CB Consumer Confidence (12/27/2017 Wednesday 15:00 GMT)
In the U.S., consumer optimism rose in November, building on the historic high that was set in the prior month. According to the Conference Board, consumer confidence increased to 129.5, the highest level since November 2000 when it touched the 132.6 level. Analysts had expected the index to dip to 124 after the reading came in at 126.2 in October. Forecast for December: 128.2
#3: U.S. Unemployment Claims (12/28/2017 Thursday 13:30 GMT)
The number of American people filing for job benefits jumped 20,000 to the 245,000 level during the week that ended on December 16 from the unrevised reading of 225,000 for the previous week. The reading for the week came in above analysts’ expectation of 239,000. This represents the highest number of claims in five weeks. Forecast for the next period: 241,000
#4: U.S. Crude Oil Stocks Change (12/28/2017 Thursday 16:00 GMT)
In the U.S., the crude oil stocks dropped by 6.495 million barrels during the week that ended on December 15after the stocks declined by 5.117 million barrels in the previous week. Analysts had expected the crude oil stocks to decline by 3.769 million barrels. With this, the crude oil inventories have dropped for five weeks in a row. Further, this is the highest fall in four months. Gasoline stocks, on the other hand, rose by 1.237 million barrels, following the 5.664 million barrels rise in the prior period. Analysts had expected gasoline stocks to increase by 1.895 million barrels.