EUR/GBP Fundamental Forecast – May 6, 2016

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Published: May 5, 2016, 10:36 UTC

The EUR/GBP dipped 35 points as the euro tumbled and the pound traded on a flat note. The pair is trading at 0.7889. “Uncertainty about the EU referendum

EUR/GBP Fundamental Forecast – May 6, 2016

The EUR/GBP dipped 35 points as the euro tumbled and the pound traded on a flat note. The pair is trading at 0.7889. “Uncertainty about the EU referendum caused customers to hold back on purchases, exacerbating already-weak demand,” said Chris Williamson, chief economist at Markit in London. “The deterioration in April pushes the surveys into territory which has in the past seen the BOE start to worry about the need to revive growth.”

Some services companies said clients delayed new contracts because of the forthcoming referendum, according to Markit. Employment growth slowed in April and the outlook for activity was at its joint-weakest level in over three years, it said. (Bloomberg)

Sterling had weakened for a fourth day against Europe’s shared currency, losing 0.4% to 79.39p per euro. The UK currency may weaken to beyond 80p per euro before the June 23 referendum. Construction output in Britain grew at its slowest rate in nearly three years in April, a survey showed yesterday, suggesting the economy was losing steam before next month’s referendum on whether to remain a member of the EU.

A Markit survey on Tuesday which showed Britain’s manufacturing industry shrank for the first time in three years. While the rate of new home construction increased in April, growth in commercial property fell to its lowest since July 2013, Markit said.

“Softer growth forecasts for the UK economy alongside uncertainty ahead of the EU referendum appear to have provided reasons for clients to delay major spending decisions until the fog has lifted,” Tim Moore, senior economist at Markit, said. (Irish Examiner)

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Friday, May 6, 2016

Cur.	Event	Actual	Forecast	Previous
USD	FOMC Member Bullard Speaks
USD	FOMC Member Kaplan Speaks
USD	FOMC Member Lockhart Speaks
USD	FOMC Member Williams Speaks
AUD	RBA Monetary Policy Statement
USD	Average Hourly Earnings (MoM) (Apr)		0.3%	0.3%
USD	Nonfarm Payrolls (Apr)		202K	215K
USD	Participation Rate (Apr)			63.0%
USD	Private Nonfarm Payrolls (Apr)		193K	195K
USD	Unemployment Rate (Apr)		5.0%	5.0%
USD	Baker Hughes U.S. Rig Count			332