The report detailing the Gross Domestic Product for the Eurozone over the third quarter (Q3) of the year is set to be released on 4 December 2013. At this time, many experts believe that that the report will show a continuation of the negative productivity from that of the second quarter (Q2).
Analysts note that the GDP is the combination of a country`s consumption, investments, government spending and the difference resulting from comparing exports and imports. As such, it provides economists a snapshot of how a country is progressing over a given period of time.
Analysts point to the economic slowdown that has occurred in the Eurozone over recent months, with lower levels of hirings and production. Some of the member countries including Germany have also felt this pain and are having difficulties boosting the region?s numbers. That said, as has been noted in recent reports, states that had been barely holding on to viability such as Greece, Spain, and Portugal appear to be standing on firmer ground now and are less dependent on the aid from the richer northern countries.
Investors are advised to watch for additional volatility in trading in the Euro, especially against rival currencies such as the USD and GBP in the coming days.
Canadian Rate Decision to be Issued Wednesday
Canada`s central bank is expected to release their decision for the month of December regarding their interest rate. At this time, many experts have expressed their belief that the Bank of Canada will be disinclined to make any changes to the current rate.
Readers are reminded that the interest rate decision by the central bank can have a significant effect on the nation`s currency and economy in that it influences borrowing and spending activities through providing investors either positive or negative incentives to put their money out into the economy.
Analysts note that while this announcement does carry importance due to its influence on the economy, most economists will likely focus more on the statement from the Bank of Canada`s officials that will come with the report. Generally in these remarks that are attached to the rate decision, officials will issue comments regarding their outlook for the currency over the medium and long terms. Often times, these insights can be crucial for investors hoping to anticipate upcoming moves taken by the central bank.
While the release of this report is unlikely to add any additional volatility to the loonie in its trading, investors are advised to watch out for further fluctuations affecting it in the market.
Gold Bounces Back Over Speculation on Fed
It was reported on 3 December 2013 that the precious metal had enjoyed a slight reprieve from its series of continued losses. The spike occurred after gold had reached a five month low, and its largest one day fall since the beginning of October.
Analysts note that the rebound on gold appears to have taken place after speculation over the Fed`s intended tapering of the $85 billion stimulus plan led some investors to move their funds to the haven asset. They are concerned that the upcoming jobs numbers and other economic indicators may show that the US economy is not yet strong enough to stand on its own without the help of the Fed`s stimulus, thus maintaining the policy.
Readers are reminded that the Federal Reserve has been in a constant process of determining when to begin cuts to the stimulus program that was put in place to act as a counter to the recession that began in 2008. As the USD dropped, many investors flocked to gold as it was seen to be more stable. Now that the US economy has shown signs of a strengthened recovery, and that the Fed may start to reduce its involvement in the economy, many traders have returned to the dollar as their investment of choice. However, as the FOMC has deliberated over when they will in fact start to make changes to their monetary policy, it has led to numerous fluctuations in the market, heavily impacting both the dollar and gold, which has fallen drastically over the past year.
Analysts point to the fact that many experts believe that the job figuresin the next report, which is due out before the Fed`s next meeting during the middle of this month, are expected to show a significant rise in the number of those added to the workforce. Should these speculations prove to be true, it may lead to Fed to move against the stimulus faster than anticipated. As has been previously noted, positive changes to the level of unemployment has been a key metric laid out by the Fed in their calculus in determining when to make the cuts to the stimulus. Moreover, a rise in the number of jobs added could thus also heavily affect the price of gold, which would then tumble back down.
Investors are advised to act with caution in the coming week in their trading of gold as there is a heightened probability of harsh fluctuations in the offing.