EUR/GBP Fundamental Forecast – September 16, 2016

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Published: Sep 15, 2016, 11:45 UTC

The EUR/GBP 0.8494 down just a few points as Eurozone CPI remained flat and the Bank of England stood pat with no changes. Economists widely expect

EUR/GBP Fundamental Forecast – September 16, 2016

The EUR/GBP 0.8494 down just a few points as Eurozone CPI remained flat and the Bank of England stood pat with no changes. Economists widely expect another cut in rates to 0.10 percent in November. If the MPC were to disappoint these expectations, then sterling could continue its recent rise. The BoE kept rates at 0.25 per cent amid signs it may have overestimated the initial shock to Britain’s economy from June’s Brexit vote after recent upbeat UK economic pointers.

There were no surprises from Eurozone CPI data in August. Final CPI remained unchanged at 0.2%, unchanged from a month earlier. The indicator has not risen above 0.3% in 2016, pointing to persistent low inflation levels on the continent. Germany, the largest economy in the Eurozone is also struggling with weak inflation. Final CPI dropped to 0.0% in August, down from 0.3% a month earlier. WPI posted a small gain of 0.1%, but this was enough to beat the forecast of -0.7%. The ECB has been reluctant to adopt further monetary easing, but may have to consider hinting at further action in order to restore market confidence in a Eurozone economy which is beset by weak growth and low inflation.

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September 16, 2016

Country	Name	Volatility		Previous	Cons
EUR	Labour cost		2	1.7
USD	Consumer Price Index Core		2	247.71
USD	Consumer Price Index M		2	0	0.1
USD	Consumer Price Index M		2	240.65	240.65
USD	Consumer Price Index CORE M		2	0.1	0.2
USD	Consumer Price Index CORE Y		3	2.2	2.2
USD	Consumer Price Index Y		3	0.8	1
USD	Michigan Consumer Sentiment		3	89.8	91
USD	Baker Hughes US Oil Rig Count		2	414