Concerns over a possible U.S. military intervention mounted after U.S. Secretary of State John Kerry said Friday that the U. S. would punish Syrian President Bashar al-Assad for a "brutal and flagrant" chemical weapons attack that killed nearly 1,500 people in Damascus.
The euro fell to five-week lows against the dollar, with EUR/USD hitting session lows of 1.3174, before paring back some losses to settle at 1.3218, 0.17% lower for the day and ending the week down 1.19%.
The euro came under pressure after official data on Friday showed the number of unemployed people in the euro zone fell by 15,000 in July, but the unemployment rate remained unchanged at a record high 12.1%.
The traditional safe haven yen strengthened against the dollar and the euro on Friday, with USD/JPY falling as low as 97.87, before settling at 98.16, down 0.22% for the day and ending the week 0.15% lower.
EUR/JPY fell to lows of 129.31, the lowest since August 20 before paring back some losses to settle at 129.73, 0.33% lower for the day and extending the week’s losses to 1.33%.
In the U.S., data on Friday showed that U.S. consumer sentiment was lower in August, pulling back from July’s six-year high. The final reading of the University of Michigan's consumer sentiment index slipped to 82.1 from a final reading of 85.1 in July.
The report came one day after official data showed that U.S. second quarter growth was revised sharply higher, indicating that the economic recovery is on track.
The Commerce Department said gross domestic product expanded at an annual rate of 2.5% in the three months to June, above expectations for growth of 2.2% and up from a preliminary estimate of 1.7%.
The upbeat data reinforced the view that the Federal Reserve could start phasing out stimulus measures as soon as next month.
The pound was little changed against the dollar on Friday but ended the week 0.49% lower at 1.5506. The dollar also ended the week higher against the Swiss franc, with USD/CHF advancing 0.86% to settle at 0.9300.
In the week ahead, markets in the U.S. are to remain closed on Monday for the Labor Day holiday. Investors will be closely watching Friday’s key U.S. nonfarm payrolls report, amid ongoing speculation over when the Fed will start to unwind stimulus measures.
Sentiment on the euro is likely to remain fragile ahead of Thursday’s European Central Bank policy meeting. Interest rate decisions by the Bank of Japan, the Bank of England, the Reserve Bank of Australia and the Bank of Canada will also be in focus.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, September 2
Japan is to release data on capital spending. China is to release revised data on manufacturing activity. Australia is to publish data on building approvals, a leading indicator of future construction sector activity.
The U.K. is to produce data on manufacturing activity, a leading economic indicator, while Switzerland is to publish its SVME PMI.
Markets in the U.S. and Canada are to remain closed for the Labor Day holiday.
Tuesday, September 3
The RBA is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision.
Australia is to produce official data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity, as well as a report on the current account.
Japan is to publish data on average cash earnings, which is closely linked to consumer spending.
In the euro zone, Spain is to release official data on the change in the number of people unemployed, a leading indicator of economic health.
Elsewhere in Europe, Switzerland is to publish data on second quarter gross domestic product, the broadest indicator of economic activity and the leading indicator of economic health.
The U.K. is to produce data on construction activity, an important economic indicator.
Later in the day, the Institute of Supply Management is to release data on manufacturing activity in the U.S., a leading indicator of economic health.
Wednesday, September 4
Australia is to release data on second quarter GDP, the broadest indicator of economic activity and the leading measure of the economy’s health.
The euro zone is to release official data on retail sales, while Spain and Italy are to release reports on service sector activity.
The U.K. is also to release data on service sector activity, a leading indicator of economic health.
Both the U.S. and Canada are to release data on the trade balance, the difference in value between imports and exports.
Later Wednesday, the BoC 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, September 5
Australia is to release official data on the trade balance.
The BoJ is to announce its benchmark interest rate and publish its rate statement, which outlines economic conditions and the factors affecting the monetary policy decision. The rate announcement is to be followed by a press conference.
In the euro zone, Spain and France are to hold auctions of 10-year government bonds. Germany is to publish government data on factory orders, a leading indicator of production.
The ECB is to announce its benchmark interest rate. The announcement is to be followed by what will be a closely watched press conference with President Mario Draghi.
In addition, the BoE is to announce its benchmark interest rate.
The U.S. is to release the ADP nonfarm payrolls report on private sector job creation, as well as the weekly government report on initial jobless claims.
Later Thursday, the ISM is to release data on non-manufacturing activity in the U.S., a leading indicator of economic health.
Friday, September 6
Germany is to release official data on the trade balance and industrial production.
The Swiss National Bank is to release data on foreign currency reserves. This data is closely scrutinized for indications of the size of the bank’s operations in currency markets. Meanwhile, Switzerland is to produce government data on consumer price inflation, which accounts for a majority of overall inflation.
The U.K. is to publish data on manufacturing production, consumer inflation expectations and the trade balance.
Canada is to release official data on the change in the number of people employed and the unemployment rate. In addition, Canada is to publish its Ivey PMI.
The U.S. is to round up the week with closely watched government data on nonfarm payrolls and the unemployment rate, as well as data on average hourly earnings.
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