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EUR/GBP Fundamental Analysis – week of July 25, 2016 -Forecast

By:
Barry Norman

The EUR/GBP edged up to 0.8380 as the pound weakened on lackluster growth data and the remain Brexit stress while the euro also weakened after the ECB did

EUR/GBP Fundamental Analysis – week of July 25, 2016 -Forecast

The EUR/GBP edged up to 0.8380 as the pound weakened on lackluster growth data and the remain Brexit stress while the euro also weakened after the ECB did not surprise markets by keeping stimulus program unchaged. Sterling extended losses on today’s poor UK stats, with the British pound to euro conversion rate slipping further from best post-Brexit levels.

The British pound slumped from best conversion levels against the euro and the US dollar exchange rates (among other currency majors) today after the UK economy ‘contracted at steepest pace since 2009.

Although the UK’s political and economic landscape is tainted with high levels of uncertainty, GBP exchange rates have made significant gains of late.

It is worth mentioning that Sterling continues to hold a comparatively weak trade weighting, however.

Given that the European Central Bank’s asset purchase program will be less impactful with lower yielding bonds, this has weighed on demand for the single currency.

Euro losses have been somewhat limited, however, thanks to speculation that the ECB will hold rates tomorrow in order to fully assess the impact of Brexit.

However, ECB President Mario Draghi is also expected to deliver a dovish accompanying speech and leave the door open for more stimulus measures.

FxEmpire provides a wide variety of analysis on a daily, weekly and monthly basis ranging from our exceptional technical analysis as well as our in-depth fundamental analysis along with our daily news and market updates. To get the best understanding of each asset it is important to review the short term daily analysis with the longer term monthly reports. To get email notification when each of these are posted please sign up for our daily newsletter.

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Major Economic Events for the week:

Date Currency Name Volatility Previous Consensus
7/27/2016 AUD Consumer Price Index (YoY) 3 1.3 1.1
7/27/2016 USD Durable Goods Orders 3 -2.2 -1.1
7/27/2016 USD Fed’s Monetary Policy Statement 3
7/27/2016 USD Fed Interest Rate Decision 3 0.5
7/28/2016 JPY BoJ Press Conference 3
7/29/2016 JPY BoJ Interest Rate Decision 3 -0.1 -0.2
7/29/2016 JPY BoJ Monetary Policy Statement 3
7/29/2016 EUR Gross Domestic Product (YoY) 3 1.7 1.6
7/29/2016 EUR Gross Domestic Product (QoQ) 3 0.6 0.3
7/29/2016 EUR Consumer Price Index (YoY) 3 0.1
7/29/2016 EUR Consumer Price Index – Core 3 0.9

Upcoming Government Bond Auctions

Date Time Country 

Jul 25 11:30 Germany Eur 1.5bn Jul 2017 Bubill

Jul 25 17:20 Italy Announces details of bond auction

Jul 26 11:10 Italy Holds zero-coupon/BTPei auction

Jul 27 11:30 Germany Eur 1bn 2.5% Aug 2046 Bund

Jul 28 11:10 Italy Holds bond auction

 

 

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