On Wednesday, Fed Chairman Ben Bernanke said a decision to scale back the U.S. central bank’s USD85 billion-dollar-a-month asset purchase program could be taken in the "next few meetings" depending on economic data.
Meanwhile, Wednesday’s minutes from the U.S. central bank’s May meeting showed a "number" of policymakers were prepared to taper bonds purchases as soon as June.
The dollar extended losses against the yen on Friday after official data showed that U.S. durable goods orders rose 3.3% in April, outstripping expectations for a 1.5% increase.
USD/JPY hit session lows of 100.67, before paring back losses to settle at 101.29, down 0.71% for the day and extending the week’s losses to 1.43%.
The dollar was also sharply lower against the traditional safe haven Swiss franc, with USD/CHF settling at 0.9612, down 0.79% for the day and 1.11% lower for the week.
The euro was little changed against the dollar on Friday after data earlier in the session showed that Germany’s Ifo index of business climate rose to 105.7 from 104.4 in April, fuelling optimism over the outlook for the euro zone’s largest economy. Analysts had expected the index to tick up to 104.5.
EUR/USD hit session highs of 1.2994 following the data, before settling at 1.2936, just 0.02% higher for the day, rising 0.67% for the week.
The pound was slightly higher against the dollar on Friday, withGBP/USD settling at 1.5124, 0.10% higher for the day, but down 0.43% for the week.
The Australian dollar ended the week close to one-year lows as concerns over a slowdown in China and fears over an earlier-than-expected exit from the Fed’s easing program pressured the currency lower.
AUD/USD hit session lows of 0.9636 on Friday, before settling at 0.9652, dropping 0.98% for the day and extending the week’s losses to 1.09%.
In the week ahead, volumes look likely to remain thin on Monday, with public holidays in the U.K. and the U.S.
Investors will be looking ahead to data on gross domestic product from Canada and Switzerland, as well as a rate decision by the Bank of Canada. The U.S. is to release data on the housing sector, consumer confidence and initial jobless claims.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, May 27
The Bank of Japan is to release the minutes of its most recent monetary policy meeting. The minutes contain valuable insights into economic conditions from the bank’s perspective.
Markets in the U.K. are to remain closed for the May bank holiday.
Meanwhile, U.S. markets are to remain closed for the Memorial Day holiday.
Tuesday, May 28
Switzerland is to release official data on jobs creation and the trade balance.
In the euro zone, Italy is to hold an auction of 10-year government bonds.
The U.S. is to produce private sector data on house price inflation, in addition to data on consumer confidence, a leading economic indicator.
Wednesday, May 29
Japan is to release government data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity.
Australia is to publish official data on completed construction work, an important economic indicator.
In the euro zone, Germany is to release preliminary data on consumer price inflation, which accounts for the majority of overall inflation, as well as data on unemployment change. Elsewhere, Spain is to hold an auction of 10-year government bonds.
The U.K. is to release industry data on retail sales, an important economic indicator.
The Bank of Canada is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision.
Thursday, May 30
Australia is to release official data on building approvals and private capital expenditure.
Switzerland is to release data on first quarter GDP, the broadest indicator of economic activity and the leading measure of the economy’s health.
Canada is to produce government data on raw material price inflation, a leading indicator of consumer inflation.
The U.S. is to release revised data on first quarter economic growth, in addition to the weekly report on initial jobless claims and data on pending home sales.
Friday, May 31
Japan is to produce official data on household spending and inflation as well as preliminary data on industrial production, a leading economic indicator.
New Zealand is to release private sector data on business confidence, a leading indicator of economic health. Australia is to release official data on private sector credit.
Switzerland is to publish the KOF economic barometer, which is designed to predict the future direction of the economy.
The U.K. is to release official data on net lending to individuals and mortgage approvals.
The euro zone is to publish preliminary data on consumer price inflation as well as data on the unemployment rate, a leading economic indicator.
Canada is to publish its monthly report on GDP, the broadest indicator of economic activity and the leading measure of the economy’s health.
The U.S. is to round up the week with revised data on consumer sentiment from the University of Michigan, as well as data on personal income and expenditure and a report on manufacturing activity in Chicago.
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