EUR/GBP Fundamental Forecast – May 25, 2016

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Published: May 24, 2016, 10:43 UTC

The EUR/GBP edged down 79 points to 0.7668 after the euro tumbled on weak German data and the pound rallied on supportive comments from the BoE Governor.

EUR/GBP Fundamental Forecast – May 25, 2016

The EUR/GBP edged down 79 points to 0.7668 after the euro tumbled on weak German data and the pound rallied on supportive comments from the BoE Governor. Mark Carney begins his hearing by defending the Bank of England’s warning that Britain could plunge into recession if it leaves the EU.

Asked what principles and guidelines are being used for such forecasts, the governor says the Bank has adopted “substantially the same rules as the UK civil service”.

But there’s one big difference – civil servants support a minister, while the Bank is independent and doesn’t support government policy.

And the Bank will soon go into purdah, to prevent any officials saying anything controversial in the run-up to the June 23 referendum. However, the Bank will be setting UK interest rates on 16 June, and will release the minutes of its meeting on that day.

Germany’s economic sentiment weakened for the first time in three months, defying expectations for improvement as financial experts do not expect the strong performance of the economy in the first quarter to continue, results of the latest survey from the Centre for European Economic Research or ZEW showed Tuesday.

Later today, euro-zone finance ministers will convene to discuss the Greek situation. The biggest sticking point is as always Greece’s debt. The IMF and Germany are at loggerheads: the IMF wants unconditional and upfront debt release as a condition for its participation. Germany rejects debt relief but wants the IMF inside.

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.

Upcoming Economic Events that you should be monitoring:

Wednesday, May 25, 2016

Cur.	Event	Actual	Forecast	Previous
USD	API Weekly Crude Oil Stock			-1.140M
NZD	Trade Balance (YoY) (Apr)		-3,940M	-3,380M
NZD	Trade Balance (MoM) (Apr)		60M	117M
AUD	Construction Work Done (QoQ) (Q1)		-1.5%	-3.6%
EUR	EU Finance Ministers Meeting
USD	Goods Trade Balance (Apr)		-60.10B	-56.90B
USD	FOMC Member Harker Speaks
USD	Services PMI (May)		53.1	52.8
CAD	Interest Rate Decision		0.50%	0.50%
USD	Crude Oil Inventories			1.310M
USD	FOMC Member Kashkari Speaks
USD	FOMC Member Kaplan Speaks