Forex — Weekly Outlook: February 16 — 20

© Reuters. Dollar fluctuates after US inflation data dampens rate hike bets -The dollar fluctuated against a basket of other major currencies on Friday after mixed consumer inflation data clouded the prospects for a further interest rate increase by the Federal Reserve in the coming months.

Consumer prices rose by 0.5% last month after advancing 0.4% in August, the labor Department reported on Friday. Economists have a forecast of 0.6%.

It is the largest increase in eight months, but was mainly due to the rising gasoline prices after the hurricanes hit the southern U.S. Underlying inflation remained subdued.

The report came after the minutes of the Fed at the September meeting published on Wednesday showed that «many participants expressed the concern that the low inflation readings this year may reflect not factors only temporary, but also the influence of developments that could prove more persistent.»

The data tempered expectations that the Fed will hike interest rates in December for the third time this year.

Expectations that US rates will rise to support the dollar and US assets more attractive to yield-seeking investors.

The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed at 93.62 late on Friday, after falling to a more than two-week low of 92.59 earlier in the session.

The dollar finished lower against the yen, with USD/JPY down 0.43% to 111.80.

The euro is a touch lower, with EUR/USD dipping to 1.1822 in late trading, after the European Central Bank said President Mario Draghi, the euro-zone still requires substantial monetary stimulus as inflation remains subdued.

Sterling gained ground amid hopes that it will employ in the UK could exit a two-year UK EU-be offered transition. GBP/USD advanced 0.2% to 1.3287 late Friday and ended the week 1.7% after suffering its worst week in more than a year in the last week.

In the coming week, investors will look at U.S. housing data to assess the economic impact of the hurricanes, the to the southern USA in the last month.

Thursday’s data on third quarter economic growth in China will be closely watched for insight into the health of the world’s second-largest economy.

Tuesday is the inflation in the United Kingdom.the data also in focus amid speculation about a possible interest rate increase by the Bank of England as soon as next month

Prior to the coming week a list of these and other important events to be compiled has an impact on the markets.

Monday, October 16

China, the release of inflation data.

Canada is buying a report on foreign securities and the Central Bank is to publish their business outlook survey.

The United States is for the release of data on manufacturing activity in New York region.

Tuesday, October 17

New Zealand is to release data on inflation.

The Reserve Bank of Australia the publication of the minutes of its latest policy setting.

The UK, the publication of inflation data. To appear later in the day, the Bank of England Governor Mark Carney before the Treasury Select Committee » in London.

To report, the ZEW Institute, sentiment on the German economy.

To solve the euro-zone revised inflation data.

The US is releasing figures, the industrial production and import prices.

Wednesday, October 18

ECB President Mario Draghi will deliver the opening speech at the banking conference in Frankfurt.

The UK is the publication of its latest report on employment.

The United States is for the release of data on building permits and housing starts.

Thursday, October 19

Australia, the publication of its latest labour market report, as well as private sector data on business confidence.

China is to release data on third quarter GDP growth, together with reports on fixed investment and industrial production.

The United Kingdom is to report on retail sales.

The USA is the publication of the weekly report on unemployment claims and data on manufacturing activity in the Philadelphia region.

Friday, October 20

The United Kingdom is for the release of data for public borrowing.

Canada is a report on retail sales and inflation.

The United States round out the week with data on existing home sales.

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