Trump’s Inauguration Highly Awaited, ECB and BOC To Hold Monetary Policy Meetings

The U.S. dollar fell against the other major currencies on Friday as President-elect Donald Trump failed to provide more concrete details on his fiscal stimulus plans at his first press conference since July. The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.29% to 101.17 late Friday. For the week, the benchmark shed 1%, posting its largest weekly decline since late October.

Supported by a broad weakening of the U.S. dollar, gold for February delivery was 1.98% higher for the week although the precious metal on Friday settled down 0.21% at $1,195.3 on the Comex division of the New York Mercantile Exchange.

U.S. stocks were mixed after the close on Friday with big banks namely Wells Fargo & Co., JPMorgan Chase & Co and Bank of America kicking off the earnings season on a positive note. At the close in NYSE, the Dow Jones Industrial Average declined 0.03%, while the S&P 500 index added 0.18%, and the NASDAQ Composite index climbed 0.48%. Among banks reporting in the coming week, Morgan Stanley is due to post results Tuesday, followed by Citibank on Wednesday and Bank of New York Mellon Corp on Thursday.

U.S. markets are closed on Monday for Martin Luther King Day and will not expect any meaningful economic data until Wednesday when the Bureau of Labor Statistics publishes figures on inflation and industrial production. Later in the day, Fed Chair Janet Yellen is scheduled to speak at an event in San Francisco.

On Thursday, the U.S. is to release a series of reports, including data on building permits, housing starts, initial jobless claims and manufacturing activity in the Philadelphia region.

Fed Chair Janet Yellen is to speak at an event in Stanford on Friday before U.S. President-Elect Donald Trump takes the Oath of Office and offers his inaugural address. Global financial markets will continue to focus on his remarks to look for details he may give on his promises of tax reform, infrastructure spending and deregulation, as well as insight regarding policies on China and the domestic economy.

Besides Fed President Yellen, a handful of Federal Reserve speakers will make public appearances in the week ahead. Traders will keep a close eye on clues on the likelihood of higher interest rates this year.

The British Pound closed lower last week even after edging higher on Friday. Sterling remained under pressure as U.K. Prime Minister Theresa May is due to speak about starting proceedings for Britain’s exit from the European Union on Tuesday. PM May is expected to set out the approach her administration will take to Brexit before an audience including foreign diplomats as well as Britain’s own Brexit negotiating team and other senior officials.

May has previously stated she will trigger Article 50 by the end of March, but has given little away about what deal she will be seeking, frustrating some investors, businesses and lawmakers. In an interview lately, May stated that she would take a hard line on immigration at the cost of Britain’s access to the single market, which sent the pound sharply lower.

Beside May’s speech, the country’s inflation due on Tuesday, monthly jobs report on Wednesday and retail sales reports on Friday will also be very important.

The euro pushed higher on Friday, with EUR/USD at 1.0644 in late trade. For the week, the euro gained 1.08% against the dollar. In the week ahead, traders will await the outcome of Thursday’s European Central Bank meeting which is due on Thursday. Although the ECB is not is expected to change monetary policy, investors will still focus on President Mario Draghi’s press conference after the interest rate announcement for fresh clues on the future path of the region’s massive stimulus program.

The Bank of Canada also has monetary policy announcement on the calendar but it is also anticipated to stand pat on its policy. The BOC is to announce its latest monetary policy decision and hold a press conference to discuss the economic outlook on Wednesday before manufacturing sales and foreign securities purchases coming out on Thursday. On Friday, data on retail sales and inflation are to round up the week.

Elsewhere, China is to release its fourth-quarter growth data on Friday amid ongoing concerns over the health of the world’s second biggest economy. The report is expected to show Chinese economy grew 6.7% in the final three months of last year, which is a similar amount in the third quarter. If confirmed, it could be a sign that growth in China is finally bottoming out. The Asian nation will also publish data on December industrial production, fixed asset investment and retail sales along with the GDP report.

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