The European shared currency traded last week near four-months high against the dollar as inflation surged in UK and the Euro Zone beyond expectations, while debt crisis continued to haunt markets especially as Portugal's Parliament rejected PM Socrates austerity measure that include spending less and hiking taxes.
Spain's financial sector suffered as well, where Moody's Investors Services downgraded 30 banks rating and shifted the outlook to negative for most banks as the nation suffers from elevated debt levels. Greece added more agony by contracting during the fourth-quarter of 2010 by 1.6 percent, while Standard & Poor's downgraded Portugal again.
The euro is forecast to rise this week, affected by the news to be released from Europe, which carries great importance to investors; nonetheless, the first day of the week will witness calm trading due to the absence of fundamentals and the lingering debt crisis on the sentiment which might keep the odds favoring the dollar for more gains with its flow of good fundamentals.
Major highlights for this week that will burden the EUR/USD pair's trading:
Monday March 28
The US will present its spending and income reports along with the Core Personal Consumption Expenditure (PCE), note that spending accounts for 70% in growth in the U.S.
Tuesday March 29
Germany Preliminary CPI reading for March, where analysts pay special attention to Germany's news as it's the driving engine of recovery in the European Zone. Furthermore, UK's final GDP reading for the fourth quarter of the year will cast the light on the second biggest economy in Europe, and how deep the contraction will be.
Wednesday March 30
Confidence reports from the Euro Zone will provide investors about various sector's performances over the month of March.
ADP report from the US will provide a slight peek in regards of labor sector's condition, ahead of Friday's infamous jobs report.
Thursday March 31
The final day of the month will carry labor data from Germany that will also provide a better picture about conditions in the euro-zone, to be followed by the Flash CPI Estimate that will shed the light on inflation in Europe, and possibly give investors a better hint on ECB's next move in regards of monetary policy.
Friday April 1
Hectic day where Manufacturing data from the euro zone may force the euro to extend its rise against the dollar, while further acceleration is projected with the release of US nonfarm payroll report that is forecast to show further improvement in the labor sector. The ISM manufacturing from the US may trim some of the gains acquired by the euro.
More March 28, 2011 Fundamental Analysis:
- USD/CAD Weekly Outlook for March 28, 2011-April 01, 2011
- USD/JPY Weekly Outlook for March 28, 2011 – April 01, 2011
- USD/CHF Weekly Outlook for March 28, 2011 – April 01, 2011
- GBP/USD Weekly Outlook for March 28, 2011 – April 01, 2011
- NZD/USD Weekly Outlook for March 28, 2011 – April 01, 2011
- AUD/NZD Weekly Outlook for March 28, 2011 – April 01, 2011
- AUD/USD Weekly Outlook for March 28, 2011 – April 01, 2011
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