EUR/GBP Fundamental Forecast – February 8, 2016

By:

Published: Feb 5, 2016, 13:01 UTC

Analysis and Recommendations: The EUR/GBP added 20 points as the pound continued to fall. The pair is trading at 0.7704. Sterling was lower against the

EUR/GBP Fundamental Forecast – February 8, 2016

Analysis and Recommendations:

The EUR/GBP added 20 points as the pound continued to fall. The pair is trading at 0.7704. Sterling was lower against the euro. The single currency, often preferred during times of financial market stress, was up 0.4 percent not far from a one-year high of 77.56 pence struck on Jan. 20.

“We suspect the combination of a June Brexit vote and a shaky risk environment due to emerging market growth concerns will unambiguously weigh on sterling,” said Viraj Patel, currency strategist at ING.

“We retain our forecast for sterling/dollar to move below $1.40 in the second quarter of 2016.”

In its Quarterly Inflation Report released on Thursday, the BoE cut its economic growth forecasts due to a gloomier global outlook. The minutes from the BoE’s latest policy meeting also showed the lone advocate of a rate hike reversed his position this month.

And while the pound initially fell after the minutes and the Inflation Report were released, it recovered after Carney said that the next move by the BoE would be a rate hike and not a cut as some in the market were pricing in.

Nevertheless, traders expect the uncertainty stemming from the Brexit referendum would keep trading in the pound rather choppy in the coming months.

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
AUD	Retail Sales (MoM) (Dec)		0.5%	0.4%
USD	Nonfarm Payrolls (Jan)		190K	292K
USD	Unemployment Rate (Jan)		5.0%	5.0%
CAD	Employment Change (Jan)		5.5K	22.8K
CAD	Ivey PMI (Jan)		50.0	49.9