EUR/GBP Fundamental Analysis August 8, 2012, Forecast

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Analysis and Recommendations:

The EUR/GBP is trading at 0.7937 dipping a bit in today’s trading, which is hard to interpret. The euro was trading strong against most of its major crosses. The GBP rose against the USD on weakness in the greenback, but negative eco data from the UK should have depressed the sterling, which it has not at this writing. Perhaps after tomorrows inflation report, we will see a market adjustment.

Industrial production data in the UK was also quite weak at -2.5% m/m in June. That is less bad than had been feared (the preliminary GDP data released in July indicated that industrial production might have fallen by 4.1%) as the UK had a one-time holiday for the Queen’s diamond jubilee celebration, and therefore also lost approximately 5% of its workdays (1/20) in a manner that is not accounted for by seasonal adjustment. UK economics team expects minor upward revisions to Q2 GDP on the basis of this print but still sees trend industrial output as rather weak.

Manufacturing production also declined today.

The BoE will release its inflation report at  tomorrow and  UK economics team expects that the BoE’s quarterly economic projections will slash down expectations for GDP and CPI, with GDP growth coming in at close to zero and the BoE’s 2-year ahead inflation projection should be around 1-1.2% y/y. They think that this will fuel speculation that the BoE will add to its monetary policy stimulus either via further unconventional policy or a cut to the Bank Rate.

FxEmpire provides in-depth analysis for each currency and commodity 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.

Economic Data August 7, 2012 actual v. forecast

Date

 

Currency

 

 

 

Event

Actual

 

Forecast

 

Previous

 

 

Aug. 07

 

AUD

 

 

 

Interest Rate Decision 

3.50%

 

3.50% 

 

3.50% 

 

 

 

 

AUD

 

 

 

RBA Rate Statement 

 

 

 

 

 

 

 

 

 

CHF

 

 

 

Unemployment Rate 

2.9%

 

2.9% 

 

2.9% 

 

 

 

 

CHF

 

 

 

CPI (MoM) 

-0.5%

 

-0.6% 

 

-0.3% 

 

 

 

 

GBP

 

 

 

Industrial Production (MoM) 

-2.5%

 

-3.4% 

 

1.0% 

 

 

 

 

GBP

 

 

 

Manufacturing Production (MoM) 

-2.9%

 

-4.1% 

 

1.2% 

 

 

 

 

GBP

 

 

 

Industrial Production (YoY) 

-4.3%

 

-5.0% 

 

-1.8% 

   

 

 

EUR

 

 

 

German Factory Orders (MoM) 

-1.7%

 

-1.0% 

 

0.7% 

   

 

 

CAD

 

 

 

Building Permits (MoM) 

-2.5%

 

-4.0% 

 

7.1% 

   

 

Upcoming Economic Events that affect the CHF, EUR, GBP and USD

Date

Time

Currency

Event 

Previous

Aug 8

5:45

CHF

SECO Consumer Climate

-8

 

9:30

GBP

BOE Inflation Report

 
 

10:00

EUR

German Industrial Production m/m

1.6%

 

12:30

USD

Prelim Nonfarm Productivity q/q

-0.9%

 

12:30

USD

Prelim Unit Labor Costs q/q

1.3%

 

14:30

USD

Crude Oil Inventories

 

Aug 9

8:00

EUR

ECB Monthly Bulletin

 
 

8:30

GBP

Trade Balance

-8.4B

 

12:30

USD

Trade Balance

-48.7B

 

12:30

USD

Unemployment Claims

 

Aug 10

6:45

EUR

French Industrial Production m/m

-1.9%

 

8:30

GBP

PPI Input m/m

-2.2%

 

12:30

USD

Import Prices m/m

-2.7%

 

18:00

USD

Federal Budget Balance

-59.7B

Government Bond Auctions

Date  Time  Country 

Aug 08  09:30  Germany

Aug 08  10:00  Norway

Aug 08  15:30  Italy

Aug 08  17:00  US

Aug 09  15:30  Italy

Aug 09  17:00  US

Aug 10  10:00  Belgium

Aug 13  09:10  Italy

Aug 13  09:10  Norway

Aug 13  09:30  Germany

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About: FX Empire Analyst - Barry Norman

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