EUR/GBP Fundamental Forecast – February 12, 2016

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Published: Feb 11, 2016, 12:39 UTC

Analysis and Recommendations: The EUR/GBP added 55 points as the euro soared as the favorite in this risk environment as Janet Yellen continues her

EUR/GBP Fundamental Forecast – February 12, 2016

Analysis and Recommendations:

The EUR/GBP added 55 points as the euro soared as the favorite in this risk environment as Janet Yellen continues her testimony before US lawmakers. The pair is trading at 0.7829. The GBP touched a 13-month low against the euro, as a sell-off in global stock markets hit currencies perceived to be riskier with uncertainty about Britain’s place in the European Union also weighing on sentiment.

Britain’s top share index joined other global indices, dropping to its lowest level in over two weeks, weighed down by banking stocks which hit multi-year lows.

Bank stocks in Europe and the UK were deep in the red with traders citing lower earnings as one of the factors. Britain’s huge banking and financial sector helps in plugging the country’s current account gap and any risk to the sector is likely to hit the pound, traders said.

The pound hit a 13-month low against the euro. The single currency, often preferred during times of financial market stress, was up 0.8 percent at 77.59 pence and has gained more than 5 percent this year.

The annual trade deficit widened to £34.7 billion in 2015, up from £0.3 billion in 2014. Trade is likely to appear as a drag on economic growth when revised figures for fourth quarter gross domestic product are released, the ONS said.

In December, the total U.K. trade deficit, including services, narrowed to £2.7 billion from £4.031 billion, helped by the value of oil imports falling to their lowest since February 2009 amid a steep drop in oil prices.

FxEmpire provides in-depth analysis for each asset we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more up to the data analysis and information in our weekly reports, which covers the current week and are published by Sunday before the new week begins. Daily we share any new events, forecasts or analysis that affect the current day. To achieve a full accurate understanding it is important that you study all of our data and analysis as a whole.

Today’s economic releases:

Cur.	Event	Actual	Forecast	Previous
	Japan – National Founding Day
	China – Lunar New Year
NZD	Business NZ PMI (Jan)	57.9		56.7
GBP	RICS House Price Balance (Jan)	49%	52%	49%
EUR	Eurogroup Meetings
USD	Initial Jobless Claims		281K	285K
CAD	New Housing Price Index (MoM) (Dec)		0.2%	0.2%
USD	Fed Chair Yellen Testifies

Upcoming Economic Events that you should be monitoring:

Friday, February 12, 2016

Holiday China – Lunar New Year

Cur.	Event	Actual	Forecast	Previous
AUD	RBA Governor Stevens Speaks
AUD	Home Loans (MoM) (Dec)		3.0%	1.8%
EUR	German CPI (MoM) (Jan)		-0.8%	-0.8%
EUR	German GDP (QoQ) (Q4)		0.3%	0.3%
EUR	German GDP (YoY) (Q4)		2.3%	1.8%
EUR	EU Finance Ministers Meeting
EUR	GDP (YoY) (Q4)		1.5%	1.6%
EUR	GDP (QoQ) (Q4)		0.3%	0.3%
EUR	Industrial Production (MoM) (Dec)		0.3%	-0.7%
USD	Core Retail Sales (MoM) (Jan)		0.1%	-0.1%
USD	Export Price Index (MoM) (Jan)		-0.9%	-1.1%
USD	Import Price Index (MoM) (Jan)		-1.4%	-1.2%
USD	Retail Sales (MoM) (Jan)		0.1%	-0.1%
USD	FOMC Member Kaplan Speaks
USD	Business Inventories (MoM) (Dec)		0.1%	-0.2%
USD	FOMC Member Dudley Speaks
USD	Michigan Consumer Expectations		82.0	82.7