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EUR/GBP Monthly Fundamental Forecast – May 2016

By:
Barry Norman
Published: Apr 30, 2016, 11:06 UTC

The EUR/GBP actually dipped 1.02% this month as both currencies excelled for very different reasons. The pair is expected to continue to trade at this

EUR/GBP Monthly Fundamental Forecast – May 2016

The EUR/GBP actually dipped 1.02% this month as both currencies excelled for very different reasons. The pair is expected to continue to trade at this level throughout the current month. The pair is holding at 0.7843. The US President flew into the UK for a four-day visit last week and warned that Britain would be at the ‘back of the queue’ in any trade deal with the US after a Brexit vote.

David Cameron hoped the intervention would be decisive in the EU debate but a YouGov poll conducted on Monday and Tuesday found that the Brexit campaign has jumped three points since the last poll two weeks ago. (Mail Online)

It backs up other polls that suggested voters are rejecting Mr Obama’s strongly-worded warning of the consequences of Brexit.  Retail FX traders recently turned net-short the British Pound and a contrarian view of crowd sentiment leaves us in favor of buying into recent strength. Last week we warned that a substantive shift in trader positioning warned of a similarly significant change in trend. And indeed recent moves act as confirmation of the same.

On the final trading day of the April, the pound was on track for a second straight month of gains – the first time that has happened since late 2013. On a weekly basis, it was heading for its best performance since early March.

That was despite persistent concerns that a June 23 referendum will lead to a vote for Britain to leave the European Union, which most economists reckon would deal a blow to the British economy and currency.

The pair is expected to hold tight ahead of the referendum with Mario Draghi likely to try to talk down the euro which the ECB believes is well over rated and weighing on exports.

FxEmpire provides in-depth analysis for each currency and commodity 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 recent analysis and information in our weekly reports and we provide daily updates and outlooks.

Upcoming Economic Events that you should be monitoring:

Cur. Event Actual Forecast Previous
Sunday, May 1, 2016
05:00   CNY Manufacturing PMI (Apr)   50.4 50.2  
Monday, May 2, 2016
05:45   CNY Caixin Manufacturing PMI (Apr)     49.7  
18:00   USD ISM Manufacturing PMI (Apr)   51.5 51.8  
Tuesday, May 3, 2016
05:45   CNY Caixin Manufacturing PMI (Apr)   49.9 49.7  
08:30   AUD Interest Rate Decision (May)   2.00% 2.00%  
12:30   GBP Manufacturing PMI (Apr)   51.2 51.0  
Wednesday, May 4, 2016
02:45   NZD Employment Change (QoQ) (Q1)     0.9%  
12:30   GBP Construction PMI (Apr)   54.0 54.2  
16:15   USD ADP Nonfarm Employment Change (Apr)   200K 200K  
18:00   USD ISM Non-Manufacturing PMI (Apr)   54.6 54.5  
18:30   USD Crude Oil Inventories     1.999M  
Thursday, May 5, 2016
05:30   AUD Retail Sales (MoM) (Mar)   0.3%    
12:30   GBP Services PMI (Apr)   53.5 53.7  
Friday, May 6, 2016
16:30   USD Nonfarm Payrolls (Apr)   200K 215K  
16:30   USD Unemployment Rate (Apr)   5.0% 5.0%  
Sunday, May 8, 2016
06:20   CNY Trade Balance (USD) (Apr)     29.86B  
Tuesday, May 10, 2016
05:30   CNY CPI (YoY) (Apr)     2.3%  
Wednesday, May 11, 2016
12:30   GBP Manufacturing Production (MoM) (Mar)     -1.1%  
Thursday, May 12, 2016
15:00   GBP Interest Rate Decision (May)   0.50% 0.50%  
Friday, May 13, 2016
16:30   USD Core Retail Sales (MoM) (Apr)     0.1%  
16:30   USD PPI (MoM) (Apr)     -0.1%  
16:30   USD Retail Sales (MoM) (Apr)     -0.4%  
Saturday, May 14, 2016
09:30   CNY Industrial Production (YoY) (Apr)     6.8%  
Tuesday, May 17, 2016
12:30   GBP CPI (YoY) (Apr)     0.5%  
Wednesday, May 18, 2016
03:50   JPY GDP (QoQ) (Q1)     -0.3%  
12:30   GBP Average Earnings Index +Bonus (Mar)     1.8%  
12:30   GBP Claimant Count Change (Apr)     6.7K  
13:00   EUR CPI (YoY) (Apr)        
Thursday, May 19, 2016
05:30   AUD Employment Change (Apr)     26.1K  
12:30   GBP Retail Sales (MoM) (Apr)     -1.3%  

 

 

 

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