Investing.com - The U.S. dollar ended the week lower against most of the other main currencies on Friday after data showed that U.S. fourth quarter growth was revised lower, adding to worries that the Federal Reserve may slow the pace of reductions to its stimulus program.
EUR/USD hit session highs of 1.3824, the strongest since December 27, before settling at 1.3801. For the week, the pair gained 0.49%.
The dollar slid to two-week lows against the yen, with USD/JPY ending the session down 0.33% at 101.78. For the week, the pair lost 0.70%.
Meanwhile, GBP/USD advanced 0.34% to 1.6745 and USD/CHF dropped 0.90% to 0.8804.
The drop in the dollar came after the Commerce Department reported that U.S. fourth quarter gross domestic product was revised down to an annual rate of 2.4%, from a preliminary estimate of 3.2%. Analysts had expected a downward revision to 2.5%.
Earlier in the week, Fed Chair Janet Yellen acknowledged recent weakness in U.S. data, saying it indicates softness in the economy.
In testimony to the Senate banking committee in Washington, Ms. Yellen said it was hard to say how much the recent soft data was due to weather and added that the bank would be attentive to signals on whether the recovery is progressing in line with expectations.
The euro was boosted after data on Friday showed that the annual rate of consumer inflation in the euro zone rose 0.8% in February, above expectations for a reading of 0.7%. The inflation rate is still well below the European Central Bank’s 2% target, but the data eased pressure on the bank to tighten monetary policy at its upcoming policy meeting on Thursday.
The common currency also gained ground against the yen and the pound. EUR/JPY ended Friday’s session up 0.34% at 140.48, while EUR/GBP rose 0.34% to 0.8244.
Elsewhere, the Canadian dollar ended Friday’s session higher against the U.S. dollar, after data showed that the Canadian economy grew more than forecast in the final three months of 2013.
Statistics Canada said the economy expended 2.9% in the fourth quarter, ahead of forecasts for a 2.6% gain. However, the Canadian economy contracted by a larger than expected 0.5% in December, as severe winter weather acted as a drag on growth.
USD/CAD ended Friday’s session down 0.53% at 1.1062.
In the week ahead, investors will be anticipating Friday’s U.S. nonfarm payrolls report for an indication of the strength of the recovery in the labor market.
Thursday’s interest rate decision and press conference by the ECB will also be closely watched, while rate reviews by the Reserve Bank of Australia, Bank of Canada and Bank of England 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, March 3
Japan is to release data on capital spending. Australia is to publish a report on company operating profits. China is to produce data on service sector activity, as well as a revised reading on the HSBC manufacturing index.
The U.K. is to release data on manufacturing activity and net lending to individuals, while Switzerland is to publish its SVME index.
In the euro zone, Spain and Italy are to release data on manufacturing activity. Meanwhile, ECB President Mario Draghi is to speak in the European Parliament in Brussels.
Canada is to produce data on raw material price inflation.
The U.S. is to release data on personal spending, while the Institute of Supply Management is to release data on manufacturing activity.
Tuesday, March 4
The RBA is to announce its benchmark interest rate and publish its monetary policy statement, which outlines economic conditions and the factors affecting the bank’s decision.
Australia is also to publish data on building approvals and the current account. Japan is to produce a report on average cash earnings.
In the euro zone, Spain is to release data on the change in the number of people unemployed.
The U.K. is to release data on construction sector activity.
Wednesday, March 5
Australia is to publish data on fourth quarter gross domestic product, the broadest indicator of economic activity and the leading measure of the economy’s health.
The euro zone is to release data on retail sales, the government measure of consumer spending, which accounts for the majority of overall economic activity. Spain and Italy are to release data on service sector activity.
The U.K. is to produce data on service sector activity, a leading indicator of economic health.
The BoC is to announce its benchmark interest rate and publish its monetary policy statement, which outlines economic conditions and the factors affecting the bank’s decision.
The U.S. is to release the ADP report on private sector job creation, which leads the government’s nonfarm payrolls report by two days. Meanwhile, the ISM is to publish a report service sector activity.
Thursday, March 6
Australia is to publish data on retail sales and the trade balance, the difference in value between imports and exports.
Germany is to publish data on factory orders.
The BoE is to announce its benchmark interest rate.
Later in the day, the ECB is to announce its benchmark interest rate. The announcement is to be followed by a press conference with President Mario Draghi.
The U.S. is to publish the weekly report on initial jobless claims and data on factory orders. Canada is to publish a report on building permits and the Ivey PMI.
Friday, March 7
RBA Governor Glenn Stevens is to testify before the House of Representatives Economic Committee, in Sydney; his comments will be closely watched.
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. Switzerland is also to release data on consumer inflation.
The U.K. is to release data on consumer inflation expectations.
In the euro zone, Germany is to publish data on industrial production.
Canada is to publish data on the change in the number of people employed and the unemployment rate, as well as a report on the trade balance.
The U.S. is to round up the week with the closely watched government data on nonfarm payrolls and the unemployment rate.
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