Forex weekly outlook: Feb. 8-12

The week beginning Feb. 8 follows one during which the euro plummeted to an 8-month low against the dollar, amid mounting fears that nations on the euro zone's periphery would not be able to rein in their spiraling budgets. 

Last week also saw the release of mixed economic data in the United States. Reports on Friday showed that while the U.S. unemployment rate was at its lowest since August, the country also lost 20,000 nonfarm jobs in January. Analysts had forecast an increase of 15,000 such jobs. 

Next week, the U.S. is set to release key monthly data on retail sales, and the chairman of the Federal Reserve, Ben Bernanke, is due to testify on the country's economic outlook. The Bank of England is also scheduled to publish an important report on inflation, in which the central bank will outline its economic analysis and projections. 

Ahead of the coming week, Forexpros has compiled a list of these and other significant events likely to affect the markets. 

Monday, Feb. 8

Switzerland will release monthly data on retail sales, the primary gauge of consumer spending, which accounts for the majority of overall economic activity. The release of data on the mood of investors toward the euro zone economies will follow, with the publication of the Sentix Investor Confidence survey.

Later Monday, the Canadian Mortgage and Housing Corp. will publish the Housing Starts for January, which give an annualized number of the new homes or buildings on which construction was begun during the month. 

Tuesday, Feb. 9

Britain's Royal Institution of Chartered Surveyors will release its latest House Price Balance report, which measures the change in the price of homes.

Germany will then publish its monthly CPI, a key measure of changes in purchasing trends and inflation in the euro zone's largest economy.

Later in the day, Britain will publish its Trade Balance index, which measures the difference in worth between exported and imported goods, the largest component of a country's balance of payments.

Also Tuesday, the latest data for two indices tracking U.S. consumer confidence will be released: the IBD/TIPP Economic Optimism Index and ABC/Washington Post Consumer Confidence Index.

Wednesday, Feb. 10

The Bank of England will release its latest Inflation Report. This important quarterly document will address rising inflation in Britain and the central bank’s measures against it. The governor of the Bank of England, Mervyn King, will hold a press conference to accompany the report's release.

Later Wednesday, both the U.S. and Canada will publish the latest figures for their Trade Balance indices. The data are an important indicator of both countries' growth and domestic demand. The U.S. deficit is expected to shrink from USD 36.4 billion to USD 35 billion, while that of Canada is expected to shrink from CAD 0.3 billion to CAD 0.1 billion. 

Bernanke will later testify before the House Financial Services Committee in Washington, D.C. on the unwinding of emergency Federal Reserve liquidity programs and the economic outlook for the U.S. 

Thursday, Feb. 11

The European Central Bank will release its monthly bulletin on monetary policy, inflation and economic conditions in the euro zone. 

The U.S. will then release key data on retail sales, core retail sales and initial jobless claims. After both types of data on retail sales disappointed last month, the latest figures are expected to rise on Thursday by 0.4%. 

The unemployment data are also expected to be upbeat. Analysts forecast the weekly figure to drop from 480,000 to 460,000. Australia will also publish its unemployment rate on Thursday.

Later, New Zealand will release its latest monthly figures for retail sales.

Friday, Feb. 12

Germany will release a preliminary estimate of its GDP, the main measure of the country's economic activity and growth. France, the euro zone's second largest economy, will subsequently release its preliminary GDP estimate, as well as preliminary data on nonfarm employment.

The European Union will then release monthly data on industrial production in the euro zone, an important indicator of strength in the manufacturing sector.

Later Friday, the University of Michigan will release a preliminary figure for its U.S. Consumer Sentiment Index, a leading indicator of future consumer spending.