Forex Weekly Outlook October 24-28

The US dollar took a break but eventually renewed its strength, with new 7 month highs against the euro and the loonie. Mark Carney and Mario Draghi’s speeches, US Durable Goods Orders, and GDP data from the UK and the US. These are the major events on forex calendar. Join us as we explore the market movers of this week.

US data were quite positive with a surprise gain of 3.2% in existing home sales, beating forecasts. Meanwhile, new building permits for private homes reached an annual rate of 1.1225 million in September. This is 6.3% above the August level of 1.152 million. Furthermore, US manufacturing data in the Philadelphia area remained positive at 9.7 despite a decline from 12.8 in September. All this provided the fuel for the greenback to move forward after the breather. The euro suffered from the denial of QE tapering by Draghi and the C$ dropped on dovish comments from Poloz as well as weak Canadian data. The last US presidential debate seemed to have strengthened the chances of Clinton to clinch the presidency. Let’s start,

1. German Ifo Business Climate: Tuesday, 8:00. German business climate recorded their biggest monthly increase since July 2010 reaching 109.5 from 106.3 in August. The survey showed manufacturers were no longer concerned about the Brexit vote and were more optimistic about future prospects. Economists expected a reading of 106.3. However, despite the positive reading, many analysts believe that Germany cannot continue to rely on domestic consumption and construction for growth but needs both structural reforms and to form a new economic cycle. Economists exect a further rise to 109.6.
2. US CB Consumer Confidence: Tuesday, 14:00.  U.S. consumer confidence edged up unexpectedly in September to more than a nine-year high of 104.1 from 101.8 in August reflecting optimism over the health the U.S. economy. Economists expected the index to decline to 98.6 in September. The current conditions increased from 125.3 to 128.5 and the expectations index rose from 86.1 to 87.8. U.S. consumer confidence is expected to decline to 101.5 this time.
3. Mark Carney speaks: Tuesday, 14:35. BOE Governor Mark Carney will speak in London before the House of Lords Economic Affairs Committee about the economic consequences of the Brexit Vote. Market volatility is expected.
4. Mario Draghi speaks: Tuesday, 15:30. ECB President Mario Draghi will speak in Berlin. Draghi may talk about the ECB’s inclination to administer further stimulus in December and provide further clues about the types of measures planned. Market volatility is expected.
5. US Crude Oil Inventories: Wednesday, 14:30. U.S. crude stockpiles fell by 5.2 million barrels to 468.7 million in the previous week contrary to the 2.2 million build forecast. Following this release oil prices climbed pushing stock shares higher. The yearly gain was reduced to 2.1%. Total petroleum products supplied over the last four weeks increased modestly to an average of 20.1 million barrels per day.
6. UK GDP data: Thursday, 8:30. The UK economy expanded 0.6% in the second quarter, amid a boost in growth before the vote to leave the EU. The reading was better than the 0.4% growth rate expected by analysts. On a yearly basis the economy grew by 2.2%. Industrial output accelerated at the fastest rate since 1999. Retailing and the services sector also improved. However the second quarter figures reflect on the past quarter and do not assess the current situation of the UK economy or what happened after the UK Brexit vote. The third quarter  grow rate is expected to reach 0.3%.
7. US Durable Goods Orders: Thursday, 12:30. Orders for long lasting manufactured products remained flat in August, suggesting a slowdown in business spending. Orders through eight months of 2016 were down 0.6% compared with the same period a year earlier. The main weakness occurred in the energy industries pulling back investment, but demand remained sluggish across the board. However, the report offered a positive side showing a modest rise in spending on equipment and facilities in recent months, which nay lift the economy to stronger growth in the coming months. Meanwhile, orders excluding of transportation fell 0.4% in August dropping in three of the past four months. But the rise in business investment suggests higher confidence and demand from companies in the U.S. Orders for durable goods are expected to rise be 0.1% in September, while core orders are predicted to gain 0.2%.
8. US Unemployment claims: Thursday, 12:30. The number of Americans filing initial claims for unemployment benefits edged up by 13,000 last week to 260,000, but the increase could be explained by the hurricane in the Southeast as many businesses were closed due to floods and damage. The four-week moving average rose by 2,250 to 251,750 last week. The reading is just above a four-decade low. The number of new unemployment claims are expected to reach 261,000 this week.
9. US GDP data: Friday, 12:30. The U.S. economy expanded by a modest 1.4% in the second quarter compared to the same period last year. The reading was below economists’ forecast of 2.6% growth. Businesses cut spending for the third straight quarter, amid uncertainties about the U.S. election and the U.K. vote to leave the European Union. However, consumer spending remained resilient rising 4.2% compare to a year ago, amid positive employment conditions and higher wages. The estimates for GDP growth in the third quarter are around 2.5%.

That’s it for the major events this week. Stay tuned for coverage on specific currencies

*All times are GMT.