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EUR/GBP Fundamental Forecast – August 25, 2016
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The Euro weakened against the British Pound on Wednesday with the EUR/GBP trading near its low at 0.8485, down 0.0071 or -0.82%. The catalyst behind the
The Euro weakened against the British Pound on Wednesday with the EUR/GBP trading near its low at 0.8485, down 0.0071 or -0.82%.
The catalyst behind the strength in the British Pound was the recent positive flow of economic data that suggests the U.K. economy may not suffer the slew of negative consequences the Brexit vote was anticipated to deliver.
The positive-data flow encouraged investors to sell the EUR/GBP as they raised expectations the Bank of England would refrain from another interest rate cut in 2016. Current data shows that investors reduced the chances of at least a 0.15% rate cut before the end of the year to 50/50. This is a bullish development for the British Pound.
Also helping the British Pound to rally was the news from Tuesday that showed the Central Bank did indeed achieve their target of buying back £1.17 billion worth of bonds with a maturity in excess of 15 years.
Aggressive speculators may already be trying to change sentiment to the upside in anticipation of the Bank of England passing on an additional rate cut on September 15 and more stimulus.
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 | |
| NZD | Trade Balance (YoY) (Jul) | -3030M | -2980M | -3310M | |
| NZD | Trade Balance (MoM) (Jul) | -433M | -350M | 127M | |
| AUD | Construction Work Done (QoQ) (Q2) | -3.7% | -1.9% | -0.3% | |
| EUR | German GDP (QoQ) (Q2) | 0.4% | 0.4% | 0.4% | |
| EUR | German GDP (YoY) (Q2) | 3.1% | 3.1% | 3.1% | |
| GBP | BBA Mortgage Approvals | 38.5K | 40.1K | ||
| USD | Manufacturing PMI (Aug) | 52.7 | 52.9 | ||
| USD | Existing Home Sales (Jul) | 5.51M | 5.57M | ||
| USD | Existing Home Sales (MoM) (Jul) | -0.4% | 1.1% | ||
| USD | Crude Oil Inventories | -0.455M | -2.508M | ||
| USD | Cushing Crude Oil Inventories | -0.724M | |||
| AUD | Private New Capital Expenditure (QoQ) (Q2) | -5.2% |
Upcoming Economic Events that you should be monitoring:
Thursday, August 25, 2016
| Cur. | Event | Actual | Forecast | Previous | |
| EUR | German Business Expectations (Aug) | 102.5 | 102.2 | ||
| EUR | German Current Assessment (Aug) | 114.9 | 114.7 | ||
| EUR | German Ifo Business Climate Index (Aug) | 108.5 | 108.3 | ||
| USD | Jackson Hole Symposium | ||||
| USD | Core Durable Goods Orders (MoM) (Jul) | 0.5% | -0.4% | ||
| USD | Durable Goods Orders (MoM) (Jul) | 3.3% | -3.9% | ||
| USD | Initial Jobless Claims | 265K | 262K | ||
| USD | Services PMI (Aug) | 52.0 | 51.4 | ||
| JPY | National Core CPI (YoY) (Jul) | -0.4% | -0.5% | ||
| JPY | Tokyo Core CPI (YoY) (Aug) | -0.3% | -0.4% |
Government Bond Auctions
Date/Time Country Type
Aug 24 10:03 Sweden Holds bond auction
Aug 24 10:30 Germany Eur 4bn 0% Oct 2021 Bobl
Aug 24 18:00 US Holds 2yr FRN auction & 5yr note auction
Aug 25 18:00 US Holds 7yr note auction
Aug 26 10:10 Italy Holds zero coupon
About the Author
James Hyerczykauthor
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.
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