Forex Weekly Outlook: June 20-24

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Includes: FXE, UDN, UUP
by: Yohay Elam

Ben Bernanke's speech, German ZEW Economic Sentiment in the context of the Greek crisis and U.S. Fed rate decision are the highlight of this week. Here's an outlook for the major market-moving events.

At the beginning of last week head of the ECB, Jean-Claude Trichet implied the possibility of excluding countries from the euro-zone in his speech regarding the Greek debt. Assuming this is a valid option, it could have serious implications on many countries in the EU. Is this only a threat or the EU's new course of action?

Let's Start:

  1. Ben Bernanke speaks: Sunday, 18:30. Ben Bernanke Federal Reserve Chairman is scheduled to speak in Washington and may speak about the global slowdown and the downward trend in the job market. His words affect the market.
  2. Euro-zone German ZEW Economic Sentiment: Tuesday, 9:00. German economists confidence dropped more than expected in May to 3.1 from 7.6 in April below forecasts of 5.0 amid global slowdown and the crisis in the Euro-Zone. A further drop to -1.1 is expected following the Greek debt crisis.
  3. U.S. Existing Home Sales; Tuesday, 14:00. Sales of existing homes dropped in April by 0.8% reaching an annual rate of 5.05 million from 5.09 in March indicating difficulty to recover from the prior financial crisis. Analysts expected the number to rise to 5.2 million units. A decrease to 4.86 million is expected now.
  4. U.S. rate decision, Wednesday, 16:30. In the last Feds meeting Chairman Ben Bernanke maintained rates at 0.25% while lowering its prediction for economic growth and inflation following rising unemployment and a general slowdown in the market. The benchmark rate is expected to remain 0.25%.
  5. US FOMC Press Conference: Wednesday, 18:15. In Ben Bernanke's first official press conference after the FOMC meeting he implied Quantitative Easing 2 will not continue beyond June despite the general decline in economic activity.
  6. U.S. Unemployment Claims: Thursday, 12:30. Unemployment claims decreased last week by 16,000 to a seasonally adjusted 414,000 better than predicted by economists however still above the 400,000 border. This drop does not signify a major improvement in the near future. Another decrease to 413,000 is predicted.
  7. U.S. New Home Sales: Thursday, 14:00. Acquisition of new houses increased by 7.3% to a 323,000 annual rate while economists predicted a rise to 300,000 units. However foreclosures of previously owned homes continue to be more attractive to buyers posing further difficulties for the building companies. A smaller amount of 311,000 is expected.
  8. Euro-zone German Ifo Business Climate: Friday, 8:00. German business sentiment remained flat in May despite predictions of another drop to 113.9 indicating business climate is optimistic. Another small drop to113.6 is forecasted.
  9. U.S. Core Durable Goods Orders: Friday, 12:30. New orders of durable goods dropped more than expected by 3.6% in April to the lowest level in six months led by a decline in orders for aircraft and motor vehicles. The low figure suggest companies do not plan to spend or invest their capital in the present situation. An increase of 1.1% is predicted now.

*All times are GMT.

That's it for the major events this week.