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EUR/GBP Monthly Fundamental Forecast – September 2016

By:
Barry Norman
Published: Sep 1, 2016, 12:48 UTC

The EUR/GBP closed the month at 0.8495 and remains a strong buy in September. The pair saw a small gain of 0.31% for the month but is up over 15% year to

EUR/GBP Monthly Fundamental Forecast – September 2016

The EUR/GBP closed the month at 0.8495 and remains a strong buy in September. The pair saw a small gain of 0.31% for the month but is up over 15% year to date. The Brexit fallout on U.K. confidence and investment has been moderated by the lower-valued sterling which has buoyed the spending power of tourists and retail sales, alongside the ramped up monetary stimulus provided by the Bank of England. Activity in the Eurozone had been showing moderate growth. Nevertheless, it may be premature to expect that a strong and sustained turnaround in world trade is developing. June’s uptick in volumes followed three successive months of decline. Coupled with the tepid and uneven performance of prior months, the year-over-year growth in world trade volumes has remained unchanged over the past year. Recent revisions to the global exports and imports have tended to favor more downside than upside adjustments. And anecdotal evidence — seaborne container traffic and port activity in many regions, for example — remains on the softer side.

The dominating factor in the short term for the Eurozone economy is the benefit from lower commodity prices, which is buttressing households’ purchasing power and driving up consumption growth to 1¾% this year. Exports —helped in particular in 2015 by a cheaper euro— are also propping up growth, along with the further reduction in the pace of austerity in the currency union. The Eurozone economy is expected to achieve volume growth of 1½% in 2015 and that growth is even forecast to rise slightly to 1¾% in 2016. That is the good news and this is something that we should cherish. Seeing economic growth finally take off after years of indifferent growth, recession and political crises is extremely welcome.

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September Major Economic Events
Date Country Name Volatility Previous
9/1/2016 USD ISM Manufacturing PMI 3 52.6
9/1/2016 USD ISM Prices Paid 3 55
9/2/2016 USD Nonfarm Payrolls 3 255
9/2/2016 USD Unemployment Rate 3 4.9
9/6/2016 AUD RBA Interest Rate Decision 3 1.5
9/6/2016 AUD RBA Rate Statement 3
9/6/2016 EUR Gross Domestic Product  Y 3
9/6/2016 EUR Gross Domestic Product  Q 3
9/6/2016 GBP Inflation Report Hearings 3
9/7/2016 GBP NIESR GDP Estimate (3M) 3 0.3
9/7/2016 CAD BOC Rate Statement 3
9/7/2016 CAD BoC Interest Rate Decision 3 0.5
9/8/2016 EUR ECB Interest Rate Decision 3 0
9/8/2016 EUR ECB Monetary press conference 3
9/9/2016 GBP Consumer Inflation Expectations 3 2
9/13/2016 GBP Core Consumer Price Index Y 3 1.3
9/13/2016 GBP Consumer Price Index Y 3 0.6
9/15/2016 AUD Fulltime employment 3 -45.4
9/15/2016 AUD Part-time employment 3 71.6
9/15/2016 AUD Employment Change 3 26.2
9/15/2016 AUD Participation Rate 3 64.9
9/15/2016 AUD Unemployment Rate 3 5.7
9/15/2016 GBP BoE Interest Rate Decision 3 0.25
9/15/2016 GBP BoE Asset Purchase Facility 3 435
9/15/2016 GBP Monetary Policy Summary 3
9/15/2016 USD Retail control 3 0
9/15/2016 USD Retail Sales – M 3 0
9/15/2016 USD Retail Sales ex Autos  – M 3 -0.3
9/20/2016 AUD RBA Meeting’s Minutes 3
9/20/2016 JPY BoJ Press Conference 3
9/21/2016 JPY BoJ Interest Rate Decision 3 -0.1
9/21/2016 JPY BoJ Monetary Policy Statement 3
9/21/2016 EUR Non-monetary policy’s ECB meeting 3
9/21/2016 USD FOMC Economic Projections 3
9/21/2016 USD Fed’s Monetary Policy Statement 3
9/21/2016 USD Fed Interest Rate Decision 3 0.5
9/21/2016 USD FOMC Press conference 3
9/22/2016 NZD RBNZ Interest Rate Decision 3 2
9/26/2016 USD Durable Goods Orders 3 4.4
9/26/2016 USD Durable Goods Orders CORE 3 1.5
9/29/2016 USD Gross Domestic Product Annualized 3 1.1
9/30/2016 USD Fed’s Yellen Speech 3

 

 

 

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