EUR/GBP Fundamental Forecast – May 27, 2016

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Published: May 26, 2016, 10:34 UTC

The EUR/GBP is up 13 points as the euro recovered a bit on little data while the pound fell after mortgage and housing data came in below forecast. The

EUR/GBP Fundamental Forecast – May 27, 2016

The EUR/GBP is up 13 points as the euro recovered a bit on little data while the pound fell after mortgage and housing data came in below forecast. The pair is trading at 0.7604. While supportive UK data has been generally lacking this week that did not prevent Pound Sterling from maintaining a bullish run against rivals. Demand for the currency was boosted by the latest developments in the ‘Brexit’ debate, as fresh cautions from Bank of England (BoE) Governor Mark Carney and the Institute for Fiscal Studies (IFS) were seen to raise the likelihood of the UK voting to remain in the EU. Investors lowered their odds for a potential ‘Brexit’ as a result, although referendum volatility is likely to exert additional downwards pressure on the Pound ahead of the June vote.

Data from the Office for National Statistics also showed that annual growth for the UK economy has been revised down 0.1% to 2%. The quarterly figures represent the slowest pace of growth since the third quarter of last year.

Chris Williamson, chief economist at Markit, said: “The data show an economy reliant on consumer spending to sustain growth, with business investment, construction, manufacturing and exports all in decline.”

Confidence in the Euro was muted in the wake of the Eurogroup’s latest meeting with regards to the Greek bailout. Although markets had initially reacted with optimism to the news that the next tranche of bailout funds had been unlocked there was some disappointment that a substantial agreement had not been reached on debt relief. With the International Monetary Fund (IMF) still expressing some reservations over the deal, and a possible return to crisis merely kicked further down the road, this offered limited support for the single currency.

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.

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Friday, May 27, 2016

Cur.	Event	Actual	Forecast	Previous
AUD	RBA Assist Gov Debelle Speaks
JPY	National Core CPI (YoY) (Apr)		-0.4%	-0.3%
JPY	Tokyo Core CPI (YoY) (May)		-0.4%	-0.3%
USD	GDP (QoQ) (Q1)		0.9%	0.5%
USD	GDP Price Index (QoQ) (Q1)		0.7%	0.7%
USD	Michigan Consumer Expectations		86.6	87.5
USD	Michigan Consumer Sentiment (May)		95.4	95.8
USD	Fed Chair Yellen Speaks
USD	Baker Hughes U.S. Rig Count			318