The US dollar traded mixed last week as Donald Trump assumed office at the White House. The world is waiting to see the first moves of Trump, who was sworn in as the 45th president of the United States, in view of his promises that he will drastically change US policies in almost all areas, including trade relations with Mexico and China, America’s relationship with Russia and NATO, and healthcare fiscal stimulus. What remains to be seen is whether Trump will execute his plans or not. Meanwhile, the economic events scheduled for this week include the US and UK GDP, US durable goods orders, etc. Here is an outlook on the major events on the forex calendar in the coming week.
#1: ECB President Mario Draghi Speaks (01/23/2017 Monday 23:30 GMT)
Mario Draghi, ECB President, is scheduled to speak in Torino. Draghi, who decided to maintain the monetary policy during this year’s first ECB meeting, believes that these are politically stormy times. Further, Germany has been prompted to call for a QE exit in 2017 because of the recent positive economic data releases. ECB’s governing council will have to deal with more of such calls if economic situation continues to improve. However, Draghi wants to silence such suggestions by saying that they are premature.
#2: UK EU Membership Court Ruling (01/24/2017 Tuesday 9:30 GMT)
The High Court of United Kingdom is scheduled to announce a ruling as regards the ability of the government to bypass parliament to initiate the Brexit by triggering Article 50 of Lisbon Treaty at London’s Royal Courts of Justice.
#3: Australia CPI (01/25/2017 Wednesday 00:30 GMT)
On a quarter-on-quarter basis, consumer prices in Australia rose by 0.7 percent in the third quarter of 2016, following an increase of 0.4 percent in the previous quarter. The market expected an increase of 0.5 percent. The reading for the third quarter was the highest since the second quarter of 2015. Forecast for the fourth quarter is an increase of 0.7 percent.
#4: Australia Trimmed Mean CPI (01/25/2017 Wednesday 00:30 GMT)
On a quarterly basis, Reserve Bank of Australia’s trimmed mean CPI increased 0.4 percent, in line with the market expectation for an increase of 0.4 percent, in the third quarter of 2016. This as followed by the 0.5 percent increase recorded in the previous quarter. Forecast for the fourth quarter is that the trimmed mean CPI increase by 0.5 percent.
#5: German Ifo Business Climate (01/25/2017 Wednesday 9:00 GMT)
The index measuring the German business climate rose to 111 in the month of December from 110.4 in November, recording the highest level achieved since February 2014. The reading indicates that the growth was strong in the fourth quarter. The reading came in better than analysts’ expectation, indicating Germany’s resilience to downside risks because of the Brexit and the uncertainties related to the US policy changes under the new President Donald Trump. However, economists are of the belief that growth will be weaker in the current year compared to that in 2016 because of the elevated interest rates which lead to higher inflation and an employment market slowdown. In January 2017, it is expected that the Ifo business climate index will edge up to 111.3.
#6: US Crude Oil Inventories (01/25/2017 Wednesday 15:30 GMT)
According to the Energy Information Administration, crude oil inventories increased by 2.3 million barrels during the week ended January 13. A day earlier, the API reported a decline of 5.04 million barrels in the US Crude oil stocks. Gasoline production at the refineries declined to 9 million barrels per day from 9.7 million barrels per day in the previous week. Gasoline stocks increased by 6 million barrels during the period, compared to the 5-million-barrel increase recorded in the week that ended on January 6. Crude oil imports stood at 8.4 million barrels per day.
#7: New Zealand CPI (01/25/2017 Wednesday 21:45 GMT)
In New Zealand, the consumer prices index rose 0.3 percent in the third quarter of 2016, following a 0.4 percent increase in the previous quarter. While vegetable prices and housing-related costs increased, transport and fruit prices declined. Forecast for the fourth quarter: 0.3 percent.
#8: UK GDP Data (01/26/2017 Thursday 9:30 GMT)
The U.K.’s economy slowed down less than what the analysts forecasted in the third quarter, following the Brexit vote, amid a rise in the prices of services. The reading helped to dismiss concerns about the possible fallout because of the referendum. The UK economy registered a growth of 0.6 percent, which is a good outcome. The effect of the Brexit vote remains muted because of the long drawn process involved in the UK separating its from the EU. Formal talks in this regard are scheduled to start only by the end of March 2017. In the fourth quarter, it is expected that the UK’s economy will register a growth rate of 0.5 percent.
#9: US Unemployment Claims (01/26/2017 Thursday 13:30 GMT)
The number of new Americans filing for unemployment benefits dropped by 15,000 during the second week of January to 234,000. The reading came in better than analysts’ expectation of 252,000. The four-week average declined to 246,750, a 43-year low. The number of claims has remained below the 300,000 level for nearly two years now. For the next reporting period, the number of new claims for jobless benefits is likely to reach 247,000 level.
#10: US GDP Data (01/27/2017 Friday 13:30 GMT)
The U.S. economy grew at an annual rate of 3.5 percent in the third quarter of 2016 from the same period a year ago. This represented the fastest economic growth in as many as two years. Growth remained slow during the first half of 2016 and averaged just above 1 percent. However, the growth pace picked up subsequently and gained momentum in the third quarter. The newly elected US president Donald Trump had dismissed the growth rate and promised a 4 percent rise when he is in power. It is expected that the US economy’s expansion will be 2.1 percent in the fourth quarter.
#11: US Durable Goods Orders (01/27/2017 Friday 13:30 GMT)
In the U.S., orders for durable goods dropped by 4.6 percent in November 2016 to $228.2 billion, after recording increases for the last four months. Economists expected the durable goods order to decline by 4.9 percent. Core durable goods orders, which excludes transportation, rose 0.5 percent, against expectations of a 0.2 percent increase. Defense orders, especially for aircrafts doubled, increased 103 percent. Non-aircraft components like communications equipment rose 6.7 percent, primary metals orders increased 2.3 percent, machinery edged up 1.3 percent, and automobiles gained 0.8 percent. For the month of December 2016, durable goods orders are expected to rise by 2.7 percent, while core orders are expected to increase by 0.5 percent.