Weekly outlook: November 11 - 15

Weekly outlook: November 11 - 15

Investing.com – The dollar strengthened against the other main currencies on Friday after a stronger-than-forecast U.S. jobs report for October fuelled expectations that the Federal Reserve could start to taper its stimulus program as soon as next month.

The U.S. economy added 204,000 jobs in October, the Department of Labor said Friday, significantly higher than the 125,000 expected by economists. The unemployment rate ticked up to 7.3% from an almost five year low of 7.2% the previous month.

The robust data indicated that the U.S. economy shrugged off the impact of the government shutdown and raised the possibility that the Fed may start to scale back its USD85 billion-a-month asset purchase program before the end of the year.

The report came one day after official data showed that the U.S. economy grew at an annual rate of 2.8% in the three months to September, well above expectations for growth of 2%.

The dollar rallied against the yen, with USD/JPY advancing 1.01% to settle at 99.07, close to Thursday's seven week high of 99.40. For the week, the pair was up 0.46%, the second straight weekly gain.

Sterling was lower against the dollar on Friday, with GBP/USD ending Friday's session at 1.6012, down 0.51% for the day. For the week, the pair was up 0.26%.

EUR/USD ended Friday's session at 1.3364, down 1.12% for the week, but still holding above the seven week low of 1.3294 struck on Thursday.

The single currency came under broad selling pressure after the European Central Bank unexpectedly cut its benchmark interest rate from 0.5% to 0.25% on Thursday. The decision came after data showed that the annual rate of euro zone inflation fell to a four year low of 0.7% in October.

ECB President Mario Draghi reiterated that euro zone borrowing costs will remain at their present or lower levels until conditions improve, indicating that further rate cuts are still possible.�

Sentiment on the euro was also hit after ratings agency Standard & Poor's cut France's sovereign rating to AA from AA+ on Friday, warning that the economic reforms of the past year were not sufficient to lift growth.

EUR/JPY settled at 132.41 on Friday, up from Thursday's three week lows of 131.20, but still ended the week with losses of 0.67%.

EUR/GBP settled at 0.8346 on Friday, after falling to 10-month lows of 0.8299 in the previous session and ended the week 1.37% lower.

In the week ahead, investors will be closely watching Thursday's Senate hearing to confirm Janet Yellen as the first chairwoman of the Federal Reserve. The euro zone and Japan are to release preliminary data on third quarter growth and the Bank of England is to publish its closely watched quarterly inflation report.

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

Monday, November 11

Japan is to release data on bank lending and the current account.
Australia is to produce data on home loan approvals.

Tuesday, November 12

Japan is to release data on tertiary industry activity, a leading indicator of economic health.

Australia is to publish a private sector report on business confidence.
The U.K. is to produce data on consumer price inflation, which accounts for the majority of overall inflation.

The Reserve Bank of New Zealand is to release its bi-annual financial stability report, which outlines the bank's view on the outlook for inflation and growth.

Wednesday, November 13

Australia is to release a private sector report on consumer sentiment, as well as official data on the wage price index.�

Japan is to produce data on core machinery orders, a leading indicator of production.

The U.K. is to release official data on the change in the number of people unemployed and the unemployment rate, as well as data on average earnings. Meanwhile, the Bank of England is to publish its closely watched quarterly inflation report and BoE Governor Mark Carney is to speak at a press conference to accompany the report.

The euro zone is to publish data on industrial production.

Later Wednesday, New Zealand is to publish data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.

Thursday, November 14

Japan is to release preliminary data on third quarter gross domestic product, the broadest indicator of economic activity and the leading measure of the economy's health.

Australia is to produce reports on inflation expectations and new vehicle sales.

The euro zone is to release a flash estimate of third quarter GDP, while Germany, France and Italy are also to release preliminary estimates of third quarter growth. The ECB is to publish its monthly bulletin.

Elsewhere in Europe, Switzerland is to publish data on producer price inflation, while the U.K. is to produce data on retail sales.

Later Thursday, both the U.S. and Canada are to release official data on the trade balance, the difference in value between imports and exports. The U.S. is also to publish the weekly report on initial jobless claims.

Friday, November 15

The euro zone is to release data on consumer price inflation.
Canada is to publish data on manufacturing sales, a leading indicator of economic health.

The U.S. is to round up the week with data on manufacturing activity in the New York region, as well as reports on industrial production and import prices.