EUR/USD (a 4-hour chart)
The dollar was traded differently on Friday, upwards versus the euro, Swiss franc, Canadian dollar and the yen but the dollar fell against the pound, Australian and New Zealand dollars. There was a calm trading and currencies traded in a narrow range amid the reduced activity due to the holidays in the United States. Euro broke the 3-day growth and decreased on an unexpected drop in retail sales in Germany in October for 0.8 %, while we expected the growth by 0.5%. At the same time, inflation and unemployment data at the euro zone turned out better than expected.
At the forthcoming first week of the month important data on GDP, trade balance, Non-Farm Payrolls, and PMI will be published. There hall be a meeting of 4 major central banks: the Reserve Bank of Australia on Tuesday, the Bank of Canada on Wednesday, the Bank of England and the ECB on Thursday. But the main event of the week will be the publication of data on the labor market (Non-Farm Payrolls) on Friday, which could shed light on the possible starting date of QE3 cutting.
Unemployment is expected to decline by 0.1 % to 7.2 %, and 183-185 thousand of new jobs. Strong Non-Farm Payrolls (at 200.000) can increase the chances that the Fed will take a step towards the reduction of the quantitative easing program already at the December meeting.
In the Euro-zone Final Manufacturing PMI will be released on Tuesday and on Wednesday – the retail sales and revised GDP data for the third quarter. The Factory orders will be released on Friday in Germany. The UK will publish PMI indices on the production sector, construction and services in the first three days of the week. Finance Minister - George Osborne will perform on Thursday with his annual «autumn statement" where he will introduce the main economic policy for the coming year.