Investing.com – The dollar rose to 10-week highs against the euro on Friday after Federal Reserve Chair Janet Yellen said U.S. interest rates could rise in the coming months and after data showing U.S. first quarter growth was revised upward.
The dollar strengthened after U.S. central bank chief Janet Yellen said it would be appropriate for the Fed to raise rates “gradually and cautiously” in the coming months if the economy and the labor market continue to pick up as expected.
The Fed hiked interest rates in December for the first time in almost a decade.
Higher rates are positive for the dollar because they make the U.S. currency more attractive to yield-seeking investors.
The euro fell to the lowest level since mid-March against the dollar, with EUR/USD down 0.71% at 1.1115 late Friday.
The dollar was already broadly higher ahead of Yellen’s remarks after data showing that the slowdown in U.S. first quarter growth was not a sharp as initially estimated.
The Commerce Department reported that gross domestic product rose at an annualized rate of 0.8% in the three months to March, up from the initial estimate of 0.5%.
The dollar has risen in recent weeks as upbeat economic reports and comments by Fed officials suggested that the U.S. central bank could raise rates as soon as its June meeting.
In the week ahead, investors will be looking to Friday’s U.S. jobs report for May for indications on how soon the Fed may raise interest rates again.
Market watchers will also be looking to Thursday’s European Central Bank meeting, after inflation data earlier in the week, to see whether the bank will ease monetary policy again this year.
Meanwhile, holidays in the U.K. and the U.S. on Monday mean that trade volumes are likely to remain thin.
Ahead of the coming week, Investing.com has compiled a list of these and other significant events likely to affect the markets.
Monday, May 30
Japan is to release data on retail sales.
In the euro zone, Germany and Spain are to release preliminary data on consumer inflation.
Markets in the U.K. will be closed for the May bank holiday, while U.S. financial markets will be closed for the Memorial Day holiday.
Tuesday, May 31
Japan is to publish data on household spending.
New Zealand is to release a report on business confidence.
Australia is to report on building approvals.
Germany is to produce data on retail sales and unemployment change.
The euro zone is to publish preliminary data on consumer inflation.
Canada is to publish its monthly report on gross domestic product.
The U.S. is to release private sector data on consumer confidence.
Wednesday, June 1
China is to publish official data on manufacturing and service sector activity, as well as the private sector Caixin manufacturing index.
Australia is to release data on first quarter economic growth.
The U.K. is to release data on manufacturing activity.
In the U.S., the Institute of Supply Management is to report on manufacturing activity.
Thursday, June 2
Australia is to publish data on retail sales and the trade balance.
Spain is to report on the change in the number of people unemployed.
The U.K. is to release data on construction activity.
The ECB is to announce its monetary policy decision. The rate announcement will be followed by a post-policy meeting press conference with President Mario Draghi.
The U.S. is to release the ADP nonfarm payrolls report and the weekly report on initial jobless claims.
Friday, June 3
China is to publish the Caixin service sector index.
The U.K. is to release data on service sector activity.
Both Canada and the U.S. are to release trade data.
The U.S. is to round up the week with the closely watched report on nonfarm payrolls and data from the ISM on service sector activity.
News Source: http://www.investing.com/