Market watchers don’t get much of a break, with the G7 finance minister scheduled to meet over the weekend, and a solid schedule of data releases and central bankers’ speeches in the week ahead.

The G7 meeting is particularly catching the attention of currency mavens, amid word that the U.S. may make some comments designed to halt the slide of the greenback. “This message could come, say, in the form of a call for less volatility in global currency markets,” TD Bank says.

“In our view, a definite statement that would set the stage for coordinated action among G-7 members appears to be unlikely, given the fact that little commonality in economic conditions exists across their respective interests. In other words, a weakening currency is still in the best interest of the U.S., given its high current account deficit and large amount of slack in its economy,” TD says. “This does not suggest that there won¹t be a dramatic market reaction — any communique that touches on exchange rates has the potential to unleash a major response. It is just that the statement is unlikely to be a definitive one.”

If the G7 meeting doesn’t do it for the dollar, economists are keying on U.S. Federal Reserve Chairman Alan Greenspan’s semi-annual Monetary Policy Report to Congress. TD says that Greenspan could take the opportunity to comment on the longer-term risks inherent in running an unsustainably large budget deficit.

“Assuming the G-7 doesn’t rattle any cages, it’s all about Greenspan’s testimony next week,” says BMO Nesbitt Burns. “Our guess is that he used the statement after the FOMC to get us worried. Now he can play the good cop and dial down concerns about imminent tightening a bit. There is no heat on the Fed to move in this election year and all he wanted to do was untie his hands by disengaging from the promise to stay on hold for a considerable period.”

CIBC World Markets agrees that he will clarify what the Fed meant by “patient”, “signaling that soft inflation will keep rate hikes at bay for at least the next few meetings, while explaining the Fed’s decision to avoid making longer-term pre- commitments henceforth.” It says that he will also highlight the importance of fiscal restraint,.

In Canada, central bankers will be on the rubber chicken circuit. too. “First up is Senior Deputy Governor Paul Jenkins on Monday; he will be speaking in Moncton on Economic Confidence and the Work of the Bank of Canada. Then, on Wednesday, Governor Dodge will speak in Montreal at lunch and the topic will be Adjusting to a Changing Economic World,” Nesbitt reports. “The market is currently fully expecting a follow-through rate cut in early March, with a small possibility of another move in the spring, which looks quite reasonable. If the Bank believes that this is too aggressive (or, perhaps, even not aggressive enough), and that markets misinterpreted their Monetary Policy Report two weeks ago, this is a golden opportunity to shift those expectations.”

CIBC says, “Governor Dodge will likely stick close to his last statement if he addresses monetary policy at all, but if he talks about growth, he will have to acknowledge a further drop in the outlook for Q4 GDP.”

There are a few important economic releases next week in Canada, too, according to RBC Financial, “including a couple that will give us good insight into how consumer demand is doing. Monday will see the release of January housing starts while Thursday will see the release of December motor vehicle sales. However, next Friday’s international trade and manufacturing shipments reports will arguably be the most anticipated releases of the week.”

“Canadian trade data have been a huge sore spot in that regard, and we’re due for at least some rebound in December. That should be enough to allow the loonie to, if only temporarily, gain ground on the US dollar, assuming the latter is in a global weakening trend after this weekend’s G7,” CIBC says.

On international trade, Nesbitt is looking for headline exports to post a moderate gain of 1.5%, with imports likely nudged up another 1%. “The net effect should be a small widening in the trade surplus to $4.5 billion. While this would be up from the $4.3 billion reading in the prior month, it would be slightly below the average surplus of $5 billion for all of 2003.”