Sun, 23 June 2013 23:01:57

Forex Weekly Outlook June 24th 2013

The euro ended the week at two-week lows against the broadly stronger dollar on Friday after Federal Reserve Chairman Ben Bernanke said Wednesday that the bank could soon start to scale back its asset purchase program.

EUR/USD hit lows of 1.3097; the pairs lowest since June 6, before settling at 1.3119, down 0.73% for the day, extending the weeks losses to 1.7%.

The pair is likely to find support at 1.3000 and resistance at 1.3253, Fridays high.

The dollar rallied after Fed Chairman Ben Bernanke said Wednesday the bank could begin tapering asset purchases by the end of 2013 and wind them down completely by the middle of 2014 if the economy picks up as the central bank expects.

The bank said it expects the U.S. economy to grow between 2.3% and 2.6% in 2013. The Fed also said it expects the unemployment rate to fall to between 6.5% and 6.8% by the end of 2014 and inflation to edge closer to its 2% target.

The euro came under pressure on Friday after Greeces Democratic Left party withdrew from the coalition government in protest over its decision to shut down the state broadcaster, leaving the government with only a slim majority in parliament.

Elsewhere Friday, the International Monetary Fund said it would not suspend Greek funding and said Athens has until July to come up with an agreement on its bailout program.

The comments came amid concerns over recent delays in the privatization plan Greece agreed to last year, which could threaten the countrys performance on economic reforms needed to secure bailout funding.

In the week ahead, investors will be closely watching U.S. data on durable goods orders, jobless claims and consumer confidence for signs that the economic recovery is on track.

A European Union economic summit will also be in focus as concerns over the economic outlook for the euro zone linger.

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

Monday, June 24

The Ifo institute is to release a report on German business climate, a leading indicator of economic health.

Tuesday, June 25

In the euro zone, Italy is to hold an auction of 10-year government bonds.

The U.S. is to publish official data on durable goods orders, a leading indicator of production, as well as closely watched reports on consumer confidence and new home sales.

Wednesday, June 26

Germany is to release the Gfk report on consumer climate, a leading indicator of consumer spending.

Later Wednesday, the U.S. is to release revised data on first quarter economic growth as well as government data on crude oil stockpiles.

Thursday, June 27

In the euro zone, EU leaders are to hold the first day of a two day economic summit. Germany is to release official data on the change in the number of people unemployed, a leading economic indicator.

The U.S. is to release the weekly government report on initial jobless claims along with data on personal income and expenditure, which is to be followed by private sector data on pending home sales.

Friday, June 28

In the euro zone, EU leaders are to hold the second day of a two day economic summit in Brussels.

Germany is to release preliminary data on consumer price inflation, which accounts for a majority of overall inflation, while France is to produce data on consumer spending.

The U.S. is to round up the week with a report on manufacturing activity in Chicago and revised data from the University of Michigan on consumer sentiment.

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