Financial Advisor

Forex - Weekly Outlook : May 31-June 4

The week beginning May 31 follows one during which the euro hovered around a 4-year low against the U.S. dollar, bouncing slightly on Thursday only to fall again on Friday after Spain's credit rating was cut.

The downgrade by Fitch, which renewed fears over the euro zone sovereign debt crisis, came a day after Madrid adopted austerity measures.

Finance chiefs from the Group of Twenty, an organization representing the world's leading economies, are set to meet next week in South Korea. The leaders are likely to discuss the European debt crisis and declare their support for Europe's efforts to resolve it, financial news outlets reported.

Next week will also see the publication of key reports on the euro zone consumer price inflation, unemployment and retail sales. Data will also be released on the 16-nation region's services and manufacturing sectors, as well as on euro zone industrial producer prices, money supply and gross domestic product. The president of the European Central Bank, Jean-Claude Trichet, is also due to speak at a public engagement.

Meanwhile, important data will be released on U.S. nonfarm unemployment and initial jobless claims, as well as on the country's manufacturing sector and housing market. Reports will also be published on U.S. hourly earnings, construction spending, vehicle sales, factory orders and crude oil inventories. The Chairman of the Federal Reserve, Ben Bernanke, is also due to speak at a public engagement.

Elsewhere in the world, the central banks of Australia and Canada will make a key interest rate decisions; Australia will publish GDP data; Britain will publish important reports on its housing market and manufacturing sector; Japan will release a report on capital spending; and Switzerland will publish data on its GDP and retail sector.

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

Sunday, May 30

The market research firm Markit will publish data on Japan's manufacturing sector based on a survey of purchasing managers. Japan will also release a monthly report on industrial production, a leading indicator of economic health.

Monday, May 31

Trichet and Bernanke are set to speak at an event in Seoul. Traders are likely to scrutinize their comments for clues to future shifts in monetary policy. The Bank of Japan governor, Masaaki Shirakawa, is due to speak later in the day at an engagement in Tokyo.

Meanwhile, Australia will release data on private sector credit in the country and on its current account, the difference in value between imported and exported goods, services, income flows, and unilateral transfers. An industry group is due to publish a report on new home sales in the country.

The European Union will later release monthly reports on consumer price inflation, money supply and private loans. Canada will later publish monthly GDP data, the broadest measure of economic activity.

Banks in Britain and the United States will be closed as the countries hold bank holidays.

Tuesday, June 1

Australia will publish a report on retail sales, a key gauge of consumer spending. The country will also release monthly data on the number of new building approvals issued.

The Reserve Bank of Australia, meanwhile, will make a key interest rate decision, which it will announce in a rate statement. In addition to relaying this information, the statement also offers commentary on the economic conditions that influenced the central bank's decision and the Australian economy's outlook.

Later Tuesday, Switzerland will publish GDP data. The Swiss SVME purchasing managers' association will also publish a monthly report on the country's manufacturing sector.

Germany will then publish its unemployment rate and a report on the change in its unemployment figures. The country will also release data on domestic retail sales. The EU will later publish data on the euro zone unemployment rate.

Also Tuesday, the Bank of Canada will make a key interest rate decision, which it too will announce in a statement. The U.S. will then publish a report on spending in the construction sector. An industry group, the Institute for Supply Management, will also publish an important report on the U.S. manufacturing sector.

Wednesday, June 2

Australia will publish key GDP data, after which Switzerland will release a report on retail sales.

The EU will then publish a Producer Price Index, which measures the change in the price of finished goods and services sold by producers.

Later in the day, an industry group will release a report on U.S. pending home sales, a leading indicator of economic health. The report, which excludes new construction, measures the change in the number of homes under contract to be sold but still awaiting the closing transaction.

Japan, meanwhile, will publish data on the total value of new capital expenditures by businesses.

Thursday, June 3

Australia will publish a report its trade balance, the difference in value between imported and exported goods. A U.K. industry group will then publish a report on British house prices.

Later in the day, the EU will release two reports, the first detailing changes in the total value of inflation-adjusted sales at the retail level; the second, an index based on a survey of purchasing managers in the services industry, rating the relative level of business conditions.

Meanwhile, the U.S. Department of Labor will release data on labor efficiency when producing goods, excluding the farming industry. The data processing firm ADP will publish a closely watched report on U.S. nonfarm employment change.

The U.S. will then release key data on initial jobless claims, an important indicator of overall economic health. The U.S. will also publish a report on the cost of labor, again excluding the farming industry. Later in the day, Bernanke is scheduled to speak at an event in Detroit.

Friday, June 4

The EU will publish revised GDP for the euro zone. Canada will then publish three reports, the first two on employment and the third on the construction sector. The Richard Ivey School of Business will later release the results of a key survey of purchasing managers in Canada.

Also Friday, the U.S. will release key employment data in a report on nonfarm payrolls, a leading indicator of consumer spending and overall economic health, as well as on its unemployment rate.

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